Why Property Taxes Keep Rising in Richmond Hill — Even as the City Grows
By Staff
At first glance, the logic feels straightforward: if a city like Richmond Hill keeps growing—adding new homes, and new residents— shouldn’t that spread the cost of running the city across more people and ease the burden on existing taxpayers?
That assumption is common—and, as groups like Strong Towns argue, it’s also one of the most persistent myths in North American urban finance. Growth does bring in new revenue. But the pattern of growth matters more than the fact of growth itself. And in many cases, the way cities grow actually sets them up for rising taxes over time.
The first misconception: growth pays for itself
When a new subdivision or condo is built, the developer typically pays for the initial infrastructure (roads, pipes, sewers). The municipality then “inherits” this infrastructure.
The Illusion: For the first 20–25 years, the city collects new property taxes from residents while spending almost nothing on maintenance because the infrastructure is new. This creates a temporary budget surplus or the appearance of wealth.
The Reality: Eventually, that infrastructure reaches the end of its life cycle and needs replacement. Strong Towns’ research shows that the property taxes collected from low-density suburban developments (common in York Region) often only cover a fraction of the actual cost to replace the roads and pipes serving them.
The deeper issue is that many forms of suburban growth are financially unproductive relative to their long-term cost. A new subdivision may generate a healthy burst of revenue in its early years, but that revenue is often thin when spread across the extensive infrastructure it requires—long stretches of road, pipes, and servicing for relatively few homes.
The result is not that growth fails to help. It’s that it often fails to pay for itself over its full lifecycle. When that gap emerges, property taxes become the tool used to close it.
Richmond Hill only controls part of your tax bill
A homeowner’s property tax bill combines three layers of government, and Richmond Hill controls only one of them. A significant share goes to York Region, which provides services like transit, policing, and social programs, while another portion funds education through provincial school boards.
This layered system complicates the idea of accountability. Even if Richmond Hill manages its own budget carefully, increases at the regional level can still push total taxes higher.
This fragmentation also obscures the true cost of growth. Regional services—especially transportation and social infrastructure—tend to expand alongside population, and they are often among the most expensive components of the system. The more a city spreads out, the more these costs scale up.
While new residents pay property taxes, they also immediately require services that aren’t “baked in” to the initial construction:
- Emergency Services: More people mean more fire stations and police patrols. (e.g., Richmond Hill’s recent budgets included specific tax hikes to fund new firefighters).
- Transit and Regional Fees: In Richmond Hill, only about 28% of your property tax stays with the city. The majority (approx. 52%) goes to York Region for regional infrastructure (like VIVA/YRT and major water systems) and 20% to education. As the Region expands outward, the cost of these massive regional networks climbs, and those costs are passed back to you.
Growth increases costs faster than it increases revenue
The central Strong Towns argument is not that growth is bad—it’s that not all growth is financially equal. In suburban development patterns, cities often expand outward with low-density, infrastructure-heavy projects. These generate relatively modest tax revenue per hectare while requiring extensive and expensive systems to support them.
In Richmond Hill, each new neighbourhood adds:
- roads that must be plowed, repaired, and eventually rebuilt
- pipes that must be maintained and replaced
- services that must expand in coverage area, not just population
Development charges help cover initial construction, but they do not fund decades of maintenance. Over time, the City inherits a growing inventory of liabilities—assets that will require repair and replacement regardless of how much revenue they generate.
Strong Towns describes this as a growth Ponzi scheme: new growth brings in cash that helps cover today’s costs, including obligations from past growth. But it also creates new future liabilities. To keep up, the city must continue growing—or raise taxes to cover the gap.
Aging infrastructure is where the bill comes due
For years, cities can appear financially stable while building new infrastructure. The real stress emerges later, when those assets begin to age.
Richmond Hill’s recent budgets specifically include a “Capital Asset Sustainability Levy” (which was 1.5% of the 2025 and 2026 tax increases). This is a direct admission of the Strong Towns thesis:
- The city must raise taxes not just for “new” things, but to fix the “old” things built decades ago.
- As the infrastructure from the initial 1980s and 90s growth spurts in Richmond Hill matures simultaneously, the cost to repair it spikes. New development today is being used to pay off the “infrastructure debt” of the past.
Much of the infrastructure built during earlier waves of suburban expansion is now entering a more expensive phase of its lifecycle. Roads need resurfacing, underground systems require rehabilitation, and public facilities demand upgrades. These are not optional improvements—they are essential to maintaining basic service levels.
This is the moment Strong Towns focuses on: when the long-term liabilities of past growth become unavoidable. At that point, cities face a choice—defer maintenance (and risk decline), cut services, or increase taxes. In most cases, taxes rise.
Inflation and service expectations are pushing budgets up
Even in a perfectly balanced system, costs would still increase over time. Municipal governments are highly exposed to inflation, particularly in construction and labour. When it costs significantly more to build or repair infrastructure than it did a decade ago, budgets must expand to keep pace.
At the same time, residents expect a certain quality of life—well-maintained roads, responsive emergency services, accessible recreation, and reliable transit. As communities grow, maintaining those standards across a larger area becomes more expensive.
This is where the mismatch becomes clear. Low-density growth patterns spread these services thinly across large areas, increasing the cost per resident. Denser, more compact development tends to generate more revenue relative to its infrastructure footprint, making it easier to sustain.
Strong Towns emphasizes Value per Acre. A large single-family home on a wide lot requires many meters of road, water main, and sewer pipe per household.
- In contrast, a traditional “Main Street” or a dense mixed-use building uses very little infrastructure relative to the massive amount of tax it generates.
- If a city continues to grow primarily through sprawling residential footprints, it is adding more “cost centers” than “revenue generators.” Even though more people are paying taxes, they are consuming even more in long-term infrastructure obligations.
Assessment changes can shift who pays more
Property assessments in Ontario, conducted by Municipal Property Assessment Corporation, don’t increase the total amount of tax collected. They determine how that total is distributed.
If a property’s value rises faster than the city average, its share of the tax burden increases. This can make tax hikes feel uneven or unpredictable, even when the overall increase is modest.
Strong Towns would frame this as a secondary issue. The real challenge is not how taxes are divided, but whether the underlying system is generating enough stable, long-term value to support itself. Assessment shifts can change who pays more, but they don’t resolve structural imbalances.
Why it feels worse during growth
The expectation that growth should lower taxes comes from a simple idea: more taxpayers should mean less burden per person. But in practice, growth often expands the system faster than it strengthens it.
In Richmond Hill, new development brings visible signs of prosperity—construction, new housing, expanding neighbourhoods. What’s less visible is the long-term cost structure being built alongside it.
Strong Towns emphasizes that financially resilient cities tend to grow incrementally and productively—adding value in ways that generate more revenue than they cost to maintain. By contrast, rapid outward expansion can create a widening gap between revenue and obligations.
That gap doesn’t always show up immediately. But when it does, it appears as rising taxes, deferred maintenance, or both.
The bottom line
Property taxes in Richmond Hill keep rising because the cost of sustaining the city is rising—and because the way the city grows plays a major role in shaping those costs.
Growth is not a guaranteed financial solution. When it is spread out and infrastructure-heavy, it can create long-term liabilities that outpace the revenue it generates. Over time, those obligations accumulate, and property taxes become the mechanism used to manage them.
The question is not just how much a city grows, but how it grows—and whether that growth builds a system that can pay for itself, not just today, but decades into the future.