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Local improvement charges (LICs) are long term, low interest loans used for improvement projects that will benefit the local community.  This mechanism has been used in Canada for decades but only for public properties.  Some examples include sewer upgrades, road improvements, etc.  Recently, the Ontario Ministry passed regulation amendments allowing LICs to be used by private property owners.

In cities where the program has been implemented, the loan term can typically go up to 10-15 years, with interests rates ranging from around 2.5-4.5%.  The loan becomes a part of the property tax bill so it does not effect the owner’s personal debt load.  This also means that if the property were to be sold, the loan stays with the property and is to be passed off to the new owner, who will reap the benefits of the home improvements.  The energy savings will often make up for the monthly payments, thus making the payback period reasonable and increasing the property value and quality of living.

Hamilton actually already has an LIC program in place for home lead pipe replacements.  If LICs are extended to energy improvement projects or even renewable energy installations, it would have an even greater impact.

Who would benefit?

  • homeowners already looking at doing home improvement projects
  • new families and homeowners
  • low-income families
  • owners of old housing stock
  • the City as this is a low-risk, net balanced endeavor
  • Utilities
  • anyone wanting energy savings and a more comfortable, higher value home