Premier Gordon Campbell freezes assessments: a gift to municipalities

It's hard not to be cynical when there's an election or two around the corner.

Yesterday, Premier Gordon Campbell characterized a couple of  gifts to municipalities as boons to homeowners.

"We're going to act to help people cope with the turbulence in the housing industry right now," Campbell said at the B.C. Liberal convention in Whistler.  "We're going to lock in assessments at the 2007 assessment-roll level."

The premier acknowledged that  real-estate values have fallen since last summer when the assessments were done.

Helmut Pastrick, chief economist with Central 1 Credit Union, told the Straight last month that home values could fall by 15 percent  from top to bottom by the time  the market stabilizes.

The MLSLink Housing Price Index, as calculated by the Real Estate Board of Greater Vancouver, only fell 1.6 percent from September 2007 to September 2008.

Looking at this statistic, it's  conceivable that by next year, housing market values could be sharply lower than when assessments were conducted in the summer of 2007.

But if the summer of 2007 assessments will be the basis of the 2009 municipal budgeting process, it means that homeowners' mill rates could be based on assessments that don't reflect the market value.

Assessment that, in fact, could turn out to be significantly higher than the market value. Sophisticated landowners, such as major developers, can hire lawyers to challenge these assessments.  Many average Joes, on the other hand, accept  their assessments and pay  their taxes because they don't have the time or the knowledge to pursue an appeal.

So  would that really  be helping homeowners cope with the turbulence in the housing market, as the premier suggested? Or would it be helping the treasury departments of municipal governments raise revenue with a minimum of fuss from taxpayers?

Campbell also said that people who have 15 percent equity in their home  can  defer paying property-tax payments for two years.

"We'll keep municipal governments whole," said Campbell, a former president of the Union of B.C. Municipalities.

This  statement implies  that the province will write cheques to municipalities to cover the difference. This reduces hassles for municipal governments, which would have to  chase people who can't or won't pay property taxes in a provincial election year.

Like I wrote at the outset, it's hard not to be cynical when there's a municipal election in two weeks and a provincial election in less than six months.

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