Introducing access-based rate variation to the transportation property tax in Metro Vancouver

Municipalities in Metro Vancouver share a transportation system managed by a regional authority, TransLink. Approximately one-quarter of transit costs are funded by property tax revenue collected throughout the region. The tax-rate is virtually constant but access to public transit is highly variable, which leads to a critique of the tax based on its ‘fairness’ – people with less service often perceive an unjust distribution of costs relative to benefits. To better understand the relationship between transit access and property tax, I derive the marginal value of transit access by regressing the assessed values of a sample of residential properties in Vancouver and Surrey on a number of relevant characteristics in a hedonic model. Finding the relationship inconsistent across the region, I suggest there is just cause for a variable rate, and analyse three types of value capture instruments in order to determine if the property tax can be levied so as to raise the same amount of revenue, but with greater equity.