The City of Sault Ste. Marie plans on taxing owners of vacant, neglected homes in the city beginning next year — and now, it’s looking to the public for input.
By introducing the Vacant Home Tax (VHT), the municipality hopes to alleviate the strain on the local housing market through increased housing availability and affordability, the city said in a news release Thursday.
The draft VHT framework, along with a survey — allowing the public to offer feedback on key aspects such as the definition of a vacant home, the proposed tax rate that should be applied, in addition to possible exemptions — is now available at the city’s website.
The city will also host an open house Monday, Sept. 23 from 4 p.m. to 7 p.m. in the main lobby of the Ronald A. Irwin Civic Centre to gather public input. Feedback gleaned from the electronic survey and open house will assist the project team in finalizing the VHT program, which will be presented to city council later this fall.
"The VHT targets properties that persistently remain vacant and neglected for more than six months within a year," the city said in its release. "The VHT is not meant to levy taxes on properties that serve as primary residences or may temporarily become unoccupied due to travel or unforeseen circumstances."
Steve Zuppa, junior planner with the City of Sault Ste. Marie, informed SooToday via email that a vacant building list was started in January 2022 and is maintained by the city's building and legal departments. There are approximately 100 units on the list that are suspected to be currently vacant.
Over the past two years, SooToday has written extensively about vacant, derelict properties in Sault Ste. Marie owned by out-of-town landlords that scooped up dozens of homes — many of them in the city’s downtown core — as housing prices plunged during the COVID-19 pandemic.
Earlier this year, a group of out-of-town landlords filed for creditor protection in Ontario Superior Court, claiming $144 million in debt and less than $100,000 cash on hand. The court-ordered protection also extends to more than 30 civil lawsuits filed against the group of insolvent corporations.
The landlords — Dylan Suitor, Ryan Molony, former YTV child actor Robby Clark and his wife, Aruba Butt — collectively own more than 600 rental units across Ontario, including the Sault, Sudbury and Timmins.
The insolvent corporations are part of a complex corporate web affiliated with SID Developments, which Clark founded with the goal of building a real estate empire by acquiring hundreds of properties in distressed real estate markets. Court documents have since revealed the hundreds of real estate holdings in Ontario were made possible through 500 mortgages and 800 promissory loan notes.
More recent court documents from their insolvency show the landlords collectively own 200 rental units in the Sault, 65 of which remain vacant. In June, an early morning fire at one of the vacant homes in the city's downtown resulted in significant damage.
“I think they have been an overall disaster for the community,” Sault Ste. Marie Mayor Matthew Shoemaker said after SooToday broke the story of the insolvency locally. “I think that we would be better off if their assets were ordered to be liquidated by the courts and bought up by reputable landlords who had some connection to the community, because clearly these corporate entities — these shell corporations — have no regard for the well-being of the community.”
KSV Advisory, the court-appointed monitor overseeing the insolvency, was granted complete control over the real estate business in court this past June after lenders reportedly “lost all confidence” in the management practices of the landlords amid allegations of mismanagement and financial misconduct.
An investigation conducted by the monitor earlier this year concluded the landlords “diverted, misused or misappropriated funds” borrowed from lenders — with some of it covering a number of extravagant purchases such as private jets, luxury hotels and a $5,000 tab at a Miami strip club — while struggling to pay municipal taxes, utility bills and contractors.
Creditor protection for the insolvent landlords has since been extended until Oct. 31.
Meanwhile, another out-of-town landlord with a grandiose vision of using the Sault’s housing stock in order to create a real estate empire in Ontario is in some hot water of their own.
CPM Properties — a property management company based in southern Ontario that rents out properties in Hamilton, Sudbury and Sault Ste. Marie — has been facing rampant criticism from tenants over substandard living conditions and unpaid utility bills since buying up homes locally.
The company’s co-director, Nels Moxness, used 31 numbered companies to buy up at least 130 properties in Sault Ste. Marie, many of which remain boarded up in the city’s downtown core. Last December, two people died in a fire at a boarded-up house on Huron Street owned by one of those numbered companies.
This week, SooToday reported that Nels Moxness and his numbered companies have been hit with a dozen lawsuits from lenders — totalling more than $2.4 million — since 2022, seeking both repayment of mortgages and repossession of the properties in many instances. The bulk of those allegations have not been proven in court.
Fellow CPM Properties co-director Mathew Moxness — who is Nels’ son — was scolded by the mayor and members of council this past March for the Moxness’ derelict, boarded-up properties while applying for a zoning application allowing for a new, five-storey apartment building at the former Red Cross property on Allard Street.
“I hope you’re hearing it loud and clear, because it is frustrating and unacceptable in the type of property maintenance that you allow to take hold at your many holdings in the community is frankly deplorable,” the mayor said to Mathew Moxness at the time.
Once the VHT program begins, residents can notify the city of any suspected vacant properties, which will in turn prompt the owners to complete a declaration form for their respective properties.
The new tax will take effect on Jan. 1, 2025, based on the 2024 vacancies.