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Last week the Toronto Star carried an article titled Free Metropasses latest Condo Perk. The title suggests a pleasant surprise; a quality gesture designed to enhance the lives of Torontonians. It is a ‘perk’ after all.

Problem is, this is no perk. This is a City-mandated program which in essence triples the price of Metropasses for new condo purchasers in Toronto. Let me explain:

The new program forces condominium developers in high-density areas of Toronto to provide a year’s supply of transit passes to purchasers of units in new developments as of April 28th. Howard Moscoe, the City Councillor who introduced the policy says its “a carrot that will get people onto public transit.”

Developers, however, will bury the cost of those Metropasses (and their related administration costs) into the price of the condo units. Here’s where the problem comes in.

According to the TTC, the annual cost of a Metropass in Toronto is $1,068. According to Stephen Dupuis of the Building Industry and Land Development Association this will add a systemic cost of $1,400 to each new unit.

Now, let’s amortize that price over the lifespan of a typical mortgage . . . See where I’m going with this? Because the price of the Metropass is now built into the price of a new home, it becomes subject to the mortgage interest.

Using the TD Canada Trust Mortgage Calculator, let’s assume monthly payments, a 6.65% interest rate and a 30-year payment schedule. Monthly mortgage payments on that single Metropass therefore work out to $8.90, meaning that the price of this $1,068 Metropass balloons to $3,204, triple the original price.

Whether you’re pro-transit or not, I don’t see how anyone can think this is a good idea. It basically punishes those people who should be rewarded for choosing transit-friendly, dense, urban living.