Call your councillor, but only if you like free money

Well, it appears the City is trying to take away a program that is designed to help homeowners in (predominantly) the poorer parts of town (based on property values).

As I wrote back in July 2012, the Home Renovation Tax Assistance program allows homeowners to get a credit of 15-25% of the value of the work completed on their home (up to $2250, split over 3 years) back on their property tax. Please see this post if you are unfamiliar with the HRTA program.

Although this program was not truly "free" money, because, hey, nothing is, it was a great incentive for folks to go about their major home renovations the right way by applying for all the proper permits. This of course in turn, means that the quality of work going into the housing stock should be a little higher, and more importantly, a little safer. I often summarize the program as being a very nice way to trick people into doing something (taking out permits) that they are generally supposed to do anyway.

I can attest from personal experience that property values are not automatically increased as a result of successfully going through this program; I had new energy efficient windows installed for a 25% property tax credit and my property value only went up the same percentage as that of my next door neighbour. Now, obviously, if you were finishing a basement or something like that under the program, you could expect that they would increase the assessed value of your home accordingly. Which is where this program was particularly awesome - people needing to do even boring renovations like re-shingling the roof, often at a cost of $5,000+ could at least appreciate a small amount back off their taxes ($750 in the example of a $5,000 roof - not too shabby!)

So, I find it interesting that a mere 2 1/2 years ago, demand for this program was apparently so high that they wanted to take funding from other much needed programs and now there "just isn't any interest in the program". That could be because in 2013 the HRTA program did not even end up announcing its funding and quietly disappeared off of the City website. So, what they're saying folks, is that no one took part in a program that didn't actually even exist. Weird. Part of the problem, that I touched on in my post in July of last year is that every year they were waiting longer and longer to announce the funding. With a construction season that often has major tie-ins to the weather, announcing a program in mid summer, when most people have already lined up their construction work for the year, you are not going to generate a lot of interest.

Winnipeggers are known for their cheapness frugality practicality, and I think that if this program was advertised anywhere besides my blog, you can bet that many more people would be taking the City up on it. With the Manitoba Hydro Home Insulation Program, there isn't a contractor in town who doesn't write the well publicized rebate available to the customer down on their estimate. Heck, years ago when there were also grants/rebates available from the Federal EcoEnergy program a person insulating their attic and installing a new furnace could have quite likely walked away with both those things costing almost nothing between the HRTA, MB Hyrdo and EcoEnergy money.

So what's the benefit to the City to keep this funding in place when we have crumbling roads, cost overruns on everything, police shortages blah blah blah? Well to the best of my knowledge* there isn't data available as to the exact dollar amounts of work completed under the program, or the combined value of the increases to property values, but I feel reasonably confident that with up $500,000 invested in the HRTA program they are getting all that money back and then some. Add in that as one person starts to do work, and then another and then another that the property values in the entire neighbourhood increase, which mean property taxes go up (and boy oh boy, under Sam "no property tax increase" Katz do our property taxes ever go up).

I obviously can't argue that the current, non-advertised, HRTA program creates incentive for people to do work, since supposedly no one is/was using it. However, keep in mind that if this program gets maxed out, then based on the 2012 program that is 2-3.3 MILLION DOLLARS (minimum) that went into the local economy. If the program doesn't get used, that money doesn't just disappear, the City gets it back; it can always go to the inevitable shortage in the snow clearing budget.

My realistic suggestion on how they City could be sure to see the full value of their investment into the HRTA program? Create a tiered approach to the program - instead of limiting the assessed value of the home to $218,000 (as per 2012 program) offer it to homes with higher values but perhaps offer smaller tax credits. It's not just people in poorer neighbourhoods that renovate without permits.

So, if you would like your chance at free money next time you renovate, call your City Councillor and tell them you would like to see the HRTA program reinstated.

*My knowledge on this is loosely defined as a quick google search, a frustrating word search on the City webpage and the realization that the information is likely out there but that I do not possess the ability to find it without losing this post to my draft folder, never to see the light of day.