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An analysis of heritage property legislation : balancing the public interest with protection for the… Orr, Stewart Douglas 1986

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AN ANALYSIS OF HERITAGE PROPERTY LEGISLATION: BALANCING THE PUBLIC INTEREST WITH PROTECTION FOR THE PROPERTY OWNER By STEWART DOUGLAS ORR B.A., The U n i v e r s i t y LI.B., The U n i v e r s i t y  o f Regina, 1981  o f Saskatchewan, 1984  A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF LAWS  in THE FACULTY OF GRADUATE STUDIES (The Graduate Programme i n Law) Faculty  o f Law  We accept t h i s t h e s i s as conforming to the ^required/Standard  THE UNIVERSITY OF BRITISH COLUMBIA August, 1986 c Stewart Douglas O r r , 1986  In p r e s e n t i n g  this thesis  requirements British  it  freely available  for  f u l f i l m e n t of the  f o r an a d v a n c e d d e g r e e a t t h e U n i v e r s i t y  of  agree that  in partial  Columbia,  I agree that f o r reference  permission  the L i b r a r y  s h a l l make  and study.  I  f o r extensive copying of t h i s  s c h o l a r l y p u r p o s e s may  for  that  copying or p u b l i c a t i o n  f i n a n c i a l gain  Law  The U n i v e r s i t y o f B r i t i s h 1956 Main Mall Vancouver, Canada V6T 1Y3 Date  -6  (3/81)  August  15,  of this  Itis thesis  s h a l l n o t be a l l o w e d w i t h o u t my  permission.  Department o f  1986  thesis  be g r a n t e d by t h e h e a d o f my  d e p a r t m e n t o r by h i s o r h e r r e p r e s e n t a t i v e s . understood  further  Columbia  written  ii  ABSTRACT In the l a s t two  decades, Canadian provinces  have enacted  l e g i s l a t i o n designed to p r o t e c t b u i l d i n g s with a r c h i t e c t u r a l or h i s t o r i c a l s i g n i f i c a n c e . h i b i t s a p r i v a t e owner of one  The  l e g i s l a t i o n t y p i c a l l y proj-  of these designated  heritage  p r o p e r t i e s from demolishing or a l t e r i n g the s t r u c t u r e without approval  from a governmental body.  a f f e c t s the property likely any  to develop.  This r e s t r i c t i o n i n v a r i a b l y  r i g h t s of the owner and  thus,  conflict is  To avoid c o n f l i c t s , the u l t i m a t e  h e r i t a g e property  s t a t u t e should  property  i t as he wishes.  s t a t u t e s have had  property  little  Thus f a r , Canadian  success i n a c h i e v i n g  this  heritage  balance  l o g i c a l l y designed form of p r o t e c t i o n f o r the  owner has  d e t a i l one  the  the p r o t e c t i o n of the owner's b a s i c r i g h t s i n the  to use  because no  of  be to s t r i k e a balance  between p r o t e c t i o n o f the p u b l i c ' s d e s i r e to preserve b u i l d i n g and  goal  been p r e s e n t e d .  This t h e s i s analysises i n  of these s t a t u t e s , B r i t i s h Columbia's Heritage  Conser-  v a t i o n Act i n order to formulate recommendations f o r a second generation  of Canadian h e r i t a g e  l e g i s l a t i o n that would b e t t e r  balance the competing i n t e r e s t s of the p u b l i c ' s r i g h t to preserve the  b u i l d i n g and  any  manner he The  the owner's r i g h t to u t i l i z e h i s property  in  wishes.  f i r s t p a r t o f t h i s t h e s i s analyses  the Heritage  Conser-  v a t i o n Act's p r o t e c t i v e measures f o r b u i l d i n g s and  compares them  to the p r o v i s i o n s of the A l b e r t a , Saskatchewan and  Ontario  heritage  statutes.  To  be e f f e c t i v e , the s t a t u t e must s a t i s f y  s e v e r a l requirements, notably  interim control, demolition  pro-  iii  h i b i t i o n , maintenance standards and The  s t r o n g enforcement  t h e s i s a l s o analyses the r e l a t i o n s h i p of h e r i t a g e  a municipality's  zoning powers.  primary l e g a l m a t e r i a l s gation. are a l s o The  This p a r t e n t a i l e d  provisions. powers to  researching  i n c l u d i n g s t a t u t e s , by-laws and  Examples of c u r r e n t  liti-  s i t u a t i o n s i n the C i t y of Vancouver  included. second p a r t of the  the owner.  The  current  compensation f o r any  restriction.  value of the The  been a f a i l u r e and  examined i n order to recommend one municipality  of  system i n B r i t i s h Columbia i s to impose  decrease i n the  caused by the h e r i t a g e that t h i s system has  t h e s i s concerns the p r o t e c t i o n  property  a n a l y s i s demonstrates thus, a l t e r n a t i v e s are  that i s inexpensive to a  or government yet p r o v i d e s s i g n i f i c a n t p r o t e c t i o n  to the property  owner.  namely e x p r o p r i a t i o n , r i g h t s , property  The  t h e s i s analyses s i x a l t e r n a t i v e s ,  r e v o l v i n g funds, t r a n s f e r of development  tax r e l i e f ,  consequences of d e s i g n a t i o n  the and  consideration  of the  economic  income tax i n c e n t i v e s .  The  t h e s i s examines the e f f e c t i v e n e s s of these a l t e r n a t i v e methods i n other j u r i s d i c t i o n s and law  of B r i t i s h Columbia.  t h e i r a d a p t a b i l i t y to the  Research f o r t h i s s e c t i o n concerned  more secondary l e g a l m a t e r i a l s , and  e s p e c i a l l y law  journal  articles  textbooks by American e x p e r t s i n the f i e l d of h i s t o r i c  preservation The  law.  general  conclusion  o f the t h e s i s i s t h a t the  system i s i n e f f e c t i v e i n b a l a n c i n g The  present  the  two  present  competing i n t e r e s t s .  Heritage C o n s e r v a t i o n Act's p r o t e c t i v e measures f o r the  b u i l d i n g might be adequate, i f used, but  contain  obvious flaws  iv  that need to be remedied. i s i t s mandatory  The g r e a t e s t d e f e c t i n the s t a t u t e  compensation p r o v i s i o n s which act as a great  d e t e r r e n t to h e r i t a g e p r o t e c t i o n . r e p l a c e d with a form o f property  These p r o v i s i o n s should  tax r e l i e f whereby a property  owner w i l l be at l e a s t p a r t i a l l y compensated c e n t i v e s to r e h a b i l i t a t e  be  the p r o p e r t y .  and provided i n -  T h i s programme  be accompanied by the r i g h t f o r the owner to seek  should  de-designation  or f u r t h e r compensation upon proof t h a t the h e r i t a g e r e s t r i c t i o n c r e a t e s an unreasonable economic h a r d s h i p . the c o n f l i c t s c u r r e n t l y surrounding be e l i m i n a t e d .  S u p e r v i s o r : P r o f e s s o r E.C.E.  Todd  With t h i s scheme,  h e r i t a g e p r o t e c t i o n could  V  TABLE OF CONTENTS I . INTRODUCTION  1  I I . PROTECTION OF THE PROPERTY  4  A. H i s t o r y  4  B. I n t e r p r e t a t i o n  9  C. R e a s o n s f o r D e s i g n a t i o n  13  D. M e c h a n i c s o f D e s i g n a t i o n  16  1. P r o v i n c i a l D e s i g n a t i o n  16  2. M u n i c i p a l H e r i t a g e D e s i g n a t i o n  16  E. G e n e r a l  Issues  19  1. I n t e r i m C o n t r o l  20  2. C o n t r o l o f D e m o l i t i o n  and A l t e r a t i o n  21  3. M a i n t e n a n c e  26  4. R e l a x a t i o n o f B u i l d i n g Codes  29  5. Z o n i n g P o w e r s  30  f o rPreservation  6. E n f o r c e m e n t  36  F. R a i l w a y s  39  I I I . PROTECTION FOR THE PROPERTY OWNER  45  A. P r o c e d u r a l F a i r n e s s  45  B. C u r r e n t  48  P r o t e c t i o n i n B r i t i s h Columbia  C. C o m p e n s a t i o n  52  1. R e a s o n s f o r C o m p e n s a t i o n  52  a ) The P r i v a t e Owner P a y s f o r t h e P u b l i c Benefit  52  b) D e s i g n a t i o n  54  i s Discriminatory  c) Maintenance  55  d) Q u a s i - E x p r o p r i a t i o n  56  vi  2. R e a s o n s A g a i n s t  Compensation  58  a ) D e s i g n a t i o n S h o u l d Not Be T r e a t e d D i f f e r e n t l y from Other Governmental Regulations  58  b) F o r e s e e a b i l i t y  60  c) M o r a l i t y  62  d) P r a c t i c a l U n c e r t a i n t y  62  e) C o m p e n s a t i o n A c t s as a D e t e r r e n t Designation  to  D. A l t e r n a t e Forms o f C o m p e n s a t i o n  63 69  1. P u r c h a s e and E x p r o p r i a t i o n  71  2. R e v o l v i n g F u n d s Scheme  74  3. T r a n s f e r o f D e v e l o p m e n t a) T.D.R'i) Use  Rights  80  i n Vancouver  81  b) The New Y o r k C i t y E x p e r i e n c e  82  c ) The C h i c a g o P l a n  88  d) P r o b l e m s w i t h T.D.R. Schemes  91  e) A p p l i c a t i o n t o B r i t i s h  94  4. P r o p e r t y  Columbia  Tax R e l i e f  96  a) E x e m p t i o n o r Abatement  o f t h e Tax  b) A s s e s s m e n t A d j u s t m e n t s  97 99  i ) Frozen Assessments  100  i i ) A s s e s s m e n t on A c t u a l Use  104  c) Conclusion  109  5. C o n s i d e r a t i o n o f t h e E c o n o m i c of Designation 6. Income Tax I n c e n t i v e s a ) The D e d u c t i b i l i t y  Consequences 112 118  of Renovation Costs...120  b) T r e a t m e n t o f D e m o l i t i o n  125  vii  7.  c) P r e s e r v a t i o n Easements as C h a r i t a b l e Deductions  128  d) C o n c l u s i o n  129  Grants  131  I V . RECOMMENDATIONS AND CONCLUSION  133  Footnotes  137  Bibliography  160  1  I . INTRODUCTION Heritage  p r o p e r t i e s are  special historical or province. while  The  activity  b u i l d i n g s o r s t r u c t u r e s t h a t have  or a r c h i t e c t u r a l s i g n i f i c a n c e f o r a p r e s e r v a t i o n of these  because they  s t r u c t u r e s i s a worth-  a c t as e v i d e n c e o f o u r  t h e most p a r t , r e m a i n u s e f u l components o f o u r serve  as l i v i n g museums t o e d u c a t e us  stated enact  i n the  United  historic  States  on  our  Supreme C o u r t ,  p r e s e r v a t i o n laws to  community  past  and  present.  for  They  communities.  governmental  As  bodies  support!  the w i d e l y s h a r e d b e l i e f t h a t s t r u c t u r e s w i t h s p e c i a l h i s t o r i c a l , c u l t u r a l o r a r c h i t e c t u r a l s i g n i f i c a n c e enhance the q u a l i t y o f l i f e f o r a l l . The b u i l d i n g s and workmans h i p r e p r e s e n t l e s s o n s o f t h e p a s t and embody p r e c i o u s f e a t u r e s o f o u r h e r i t a g e and s e r v e as e x a m p l e s f o r t o d a y . 1  2 One  commentator  the  p u b l i c with  community improve Clearly,  the  i n c r e a s i n g employment and  s t r u c t u r e s and  communities' past Because our brief,  that Canadian heritage  a l a r g e s c a l e , p r e s e r v a t i o n may  p u b l i c b e n e f i t s f r o m the  them and  relatively  On  economy by  the  the  therefore  incidentally  tourism. these  l a w s have been e n a c t e d have made t o  to  our  present.  country i t has  i s so y o u n g and only  been i n the  our  history  last  two  Typically,  for  the  all  a l t e r a t i o n s or demolition  these  of s i g n i f i c a n t  body a p p r o v e s .  heritage  This leads  to the  to  preserve  statutes  p r o p e r t i e s and  of that property  so  decades  j u r i s d i c t i o n s have e n a c t e d l e g i s l a t i o n  designation  provides local  p r e s e r v a t i o n of  c o n t r i b u t i o n s they  and  properties.  designating  preservation  a "sense of p l a c e " thus s t r e n g t h e n i n g  ties.  significant protect  indicated that heritage  provide  then p r o h i b i t  unless  the  fundamental  2  conflict protect  in legislating  restrict  profits.  protection  property  to the property  a  heritage property  restrictions.  l a w s have g i v e n but l i t t l e  Thus f a r ,  reasonably  success  This  forms o f p r o t e c t i o n f o r the  thesis will  examine  the f a i l u r e  safe  h a s been  t h i s p r o t e c t i o n to the p u b l i c i n t e r e s t  compensation o r other owner.  and f a i r ,  owner f r o m t h e f r e q u e n t l y  burdens o f the h e r i t a g e  balancing  structures  the p r o t e c t i o n o f the  p r o t e c t i o n f o r the property  Canadian h e r i t a g e  heritage  that  and t o e n j o y maximum  effective  s u i t a b l y balance  considerable  in  a s he p l e a s e s  Thus, t o be t r u l y  s t a t u t e must  Measures  t h e r i g h t s o f t h e p r i v a t e owner t o use  enjoy h i s property  with  protection.  t h e p u b l i c ' s i n t e r e s t by p r e s e r v i n g  necessarily and  heritage  achieved  with  property  of B r i t i s h  Columbia's  •5  heritage this  s t a t u t e , the Heritage  balance,  to formulate balance  level, British  and, by a n a l y s i n g recommendations  between  Since  most  this  Conservation other  heritage  thesis will  p r o t e c t i o n i s done  past"^. worthy  as d e f i n e d  Generally,  A ."heritage  municipal  e m p h a s i z e t h e r o l e and powers  property"  I will  powers  availability. use i n t h i s  by t h e s t a t u t e s , h a s a  heritage  of  preservation.  By-Law and r e l a t e d  some o f t h e t e r m i n o l o g y  "heritage",  broad meaning.  better  at the  s p e c i a l emphasis because o f t h e i r  To c l a r i f y  s t a t u t e s , attempt  the c o n f l i c t i n g i n t e r e s t s .  Columbia m u n i c i p a l i t i e s i n h e r i t a g e  receive  thesis,  heritage  t h a t would l e a d to a  The C i t y o f V a n c o u v e r ' s H e r i t a g e will  Act , i n achieving  very  means " i n h e r i t e d f r o m t h e  means any  significant  property  o f p r o t e c t i o n w h e t h e r o r n o t i t h a s a c t u a l l y been  3  formally body. can  designated  and  thus  p r o t e c t e d by  A m e r i c a n commentators use  be u s e d  interchangeably  Heritage  property  legislation  been made i n d e t e r m i n i n g  statutes.  P e r h a p s now  their  effect  the  fairness  thus and  recent  little effect  analysis of  these  s t a t u t e s have been u s e d  i t i s time  to comprehensively  i n o r d e r t o d e t e r m i n e more e f f i c i e n t  measures f o r a second g e n e r a t i o n  which  property.  is a relatively  s y s t e m s and  that these  tested f o r several years,  word " l a n d m a r k "  with h e r i t a g e  development i n Canadian l e g a l has  the  a.governmental  and  of heritage statutes.  and  analyse fair  4  I I . PROTECTION OF  THE  PROPERTY  A.„History c  Before British  the enactment  Columbia r e l i e d  historic  sites.  n a t i o n powers  The  o f the Heritage  Conservation  Act ,  on a v a r i e t y o f s t a t u t e s t o p r o t e c t  provincial  u n d e r two  Sites Protection Acts.  government  was  given  desig-  different  A r c h a e o l o g i c a l and  The  , enacted  first  i n 1960,  Historic was r e -  7 i n 1972  placed  by a more c o m p r e h e n s i v e s t a t u t e  by t h e P r o v i n c i a l  Secretary  or a l t e r a t i o n without In Act  1973,  was  from d e s t r u c t i o n  permit.  t h e power t o d e s i g n a t e  or c u l t u r a l  effective  Designation  a site  Designation  a l l m u n i c i p a l i t i e s g o v e r n e d by t h e  were g i v e n  of h i s t o r i c  a  protected  .  only  significance.  with  protected  the approval  Municipal  b u i l d i n g s and The  structures  designating  o f the p r o v i n c i a l  the s t r u c t u r e from d e m o l i t i o n  by-law cabinet.  or the  9 alteration in  1974  of i t s facade.  to provide  Council.  The  Municipal  Act.  The V a n c o u v e r C h a r t e r  similar  Charter  powers  f o r the Vancouver  amendment had two  Firstly,  approval  V a n c o u v e r was demolition  permit  City  the Vancouver C o u n c i l d i d not r e q u i r e  o f the p r o v i n c i a l given  amended  advantages over the  1 the  was  o  government  t h e power t o r e f u s e  f o r up t o n i n e t y  .  More  importantly,  any a p p l i c a t i o n f o r a  days pending the  enactment  11 o f a h e r i t a g e d e s i g n a t i o n by-law . A p r o p e r t y owner c o u l d o n l y demand c o m p e n s a t i o n i f c o u n c i l d i d n o t d e s i g n a t e h i s 12 property these  after withholding  powers,  the C i t y  a demolition  permit..  o f Vancouver enacted  .  Using  i t s Heritage  5  By-Law under which over f i f t y  s t r u c t u r e s have been designated  Other m u n i c i p a l i t i e s had l e s s success. provisions  4  .  The M u n i c i p a l A c t  d i d not p r o t e c t a b u i l d i n g u n t i l a by-law was  adopted by c o u n c i l and then approved by the p r o v i n c i a l government.  In the i n t e r i m , the owner c o u l d apply  a d e m o l i t i o n permit  and destroy  burdens o f d e s i g n a t i o n .  the s t r u c t u r e to a v o i d the  The m u n i c i p a l i t y ' s i n a b i l i t y  h o l d the d e m o l i t i o n permit The  f o r and r e c e i v e  made the powers s e v e r e l y  City of V i c t o r i a discovered  to w i t h -  inadequate.  soon a f t e r completing  a survey  of p o t e n t i a l h e r i t a g e p r o p e r t i e s t h a t there was an i n c r e a s e i n the number o f d e m o l i t i o n permit  a p p l i c a t i o n s i n v o l v i n g many o f  the f o u r hundred l i s t e d p r o p e r t i e s . owning and m a i n t a i n i n g were demolishing  To a v o i d the burdens o f  a p r o t e c t e d p r o p e r t y , p r i v a t e owners  t h e i r s t r u c t u r e s to i n s u r e t h e i r l a n d would  be a v a i l a b l e f o r f u t u r e development. r e a c t by u s i n g an e x t r a o r d i n a r y power.  C o u n c i l was f o r c e d to Under s. 290 of the  -It;  M u n i c i p a l Act  , a m u n i c i p a l i t y , where i t f i n d s i t s powers  are inadequate to d e a l w i t h an emergency, may d e c l a r e t h a t an emergency e x i s t s and e x e r c i s e any powers necessary e f f e c t i v e l y with the emergency.  to d e a l  T h i s d e c l a r a t i o n o f an emer-  gency must be made by a by-law passed by a two t h i r d s m a j o r i t y . The  only l i m i t a t i o n on the powers used d u r i n g the emergency 16 i s t h a t they must be under p r o v i n c i a l j u r i s d i c t i o n . Victoria C i t y C o u n c i l d e c l a r e d an emergency e x i s t e d because o f an "alarming  i n c r e a s e i n the number o f b u i l d i n g s having  historical  17 value being demolished."  To c o n t a i n the emergency, c o u n c i l  gave i t s e l f the power t o revoke a l l e x i s t i n g d e m o l i t i o n  permits  6 and to r e f u s e any  d e m o l i t i o n or b u i l d i n g permit a p p l i c a t i o n s  pending the p a s s i n g of d e s i g n a t i o n by-laws. The i t was  use  of the emergency power was  extremely r a r e and  c h a l l e n g e d i n court by the owner of one  properties.  In E & J Murphy L t d . v. The  o f the  thus  listed  C o r p o r a t i o n of the  18  C i t y of V i c t o r i a  , Mr.  J u s t i c e Macdonald h e l d t h a t the  o f the emergency power was of an emergency was determination  was  entirely  v a l i d because the  use  existence  to be determined s o l e l y by c o u n c i l .  not c o l o u r a b l e because there was  The  ample e v i -  dence a v a i l a b l e to prove t h a t the c i t y ' s d e s i g n a t i o n powers were i n e f f e c t i v e . provide  The  purpose of the emergency by-law was  time f o r c o u n c i l to preserve  designation. of these  There was  s t r u c t u r e s was  no bad  operate  i n the p u b l i c i n t e r e s t .  The  land-  d i s c r i m i n a t o r y was  of g e n e r a l a p p l i c a t i o n and  to the s p e c i a l detriment  number of o t h e r s .  formal  f a i t h because the p r e s e r v a t i o n  owner's argument t h a t the by-flaw was because the by-law was  the s t r u c t u r e s by  to  rejected  thus d i d not  of the A p p e l l a n t and  a small  Presumably, because f o u r hundred landowners  were a f f e c t e d , the by-law c o u l d be considered  to be o f g e n e r a l  19 • •  application.  Furthermore, cases  imply  that d i s c r i m i n a t i o n  w i l l only e x i s t where bad f a i t h or an improper purpose can shown. was  In the present  case,  be  the court found t h a t p r e s e r v a t i o n  i n the p u b l i c i n t e r e s t and  t h e r e f o r e not an  improper  motive. T h i s a c t i o n by the V i c t o r i a C o u n c i l was M u n i c i p a l Act's emergency power was I t may  the only time the  s u c c e s s f u l l y implemented.  have shocked the p r o v i n c i a l government i n t o p a s s i n g  new  7  l e g i s l a t i o n w i t h more p o w e r s f o r m u n i c i p a l i t i e s b e c a u s e t h a n one y e a r  later,  the Heritage  Conservation  less  A c t (HCA) was  20 proclaimed  .  S e c t i o n 2 o f t h e A c t s t a t e d i t s p u r p o s e was  " t o encourage and f a c i l i t a t e of heritage property first  t h e p r o t e c t i o n and c o n s e r v a t i o n  i n the province."  This a c t provided the  comprehensive h e r i t a g e p r o t e c t i o n l e g i s l a t i o n  province  i n the  as d e s i g n a t i o n powers f o r b o t h t h e p r o v i n c i a l  government  and a l l m u n i c i p a l i t i e s were i n c l u d e d i n t h e same a c t . The 21 A r c h a e o l o g i c a l and H i s t o r i c S i t e s P r o t e c t i o n A c t as w e l l as t h e h e r i t a g e p r o v i s i o n s o f s. 7 H A o f t h e M u n i c i p a l A c t 23 s. 564A o f t h e V a n c o u v e r C h a r t e r The H e r i t a g e rules.  Conservation  ^ were  repealed.  Act*^ provides  no t r a n s i t i o n  T h i s c a u s e s some u n c e r t a i n t y a s t o t h e s t a t u s o f d e s i g -  n a t i o n s made u n d e r p r e v i o u s  statutes.  When t h e s e c o n d A r c h a e 25  o l o g i c a l and H i s t o r i c S i t e s P r o t e c t i o n A c t  J  was e n a c t e d , i t  included a section that expressly indicated that and p e r m i t s  the  designations  made u n d e r t h e f o r m e r a c t w o u l d c o n t i n u e  v a l i d a n d w o u l d be e n f o r c e a b l e act.  and  t o be  by t h e p r o v i s i o n s o f t h e new  The HCA d o e s n o t i n c l u d e a s i m i l a r p r o v i s i o n .  Instead,  s i t u a t i o n a p p e a r s t o be g o v e r n e d by t h e I n t e r p r e t a t i o n nf. Act . S e c t i o n 36 s t a t e s : ( 1 ) Where a n e n a c t m e n t ( t h e " f o r m e r e n a c t m e n t " ) i s r e p e a l e d a n d a n o t h e r e n a c t m e n t ( t h e "new e n a c t m e n t " ) i s s u b s t i t u t e d f o r i t , . . . a l l r e g u l a t i o n s made u n d e r t h e f o r m e r e n a c t m e n t r e m a i n i n f o r c e a n d s h a l l be deemed t o h a v e b e e n made u n d e r t h e new e n a c t m e n t , i n so f a r a s t h e y a r e n o t i n c o n s i s t e n t w i t h t h e new e n a c t m e n t , u n t i l t h e y a r e r e p e a l e d o r o t h e r s made i n t h e i r p l a c e . . . . A " r e g u l a t i o n " would i n c l u d e a d e s i g n a t i n g by-law o r a p r o 27 v i n c i a l designating order . Since the purpose o f the repealed  8  h e r i t a g e e n a c t m e n t s was t h e same a s t h e p u r p o s e o f t h e HCA and  t h e means o f d e s i g n a t i o n a n d e n f o r c e m e n t a r e s i m i l a r , t h e  designating orders should  and b y - l a w s from t h e p r e v i o u s  be c o n s i s t a n t w i t h t h e HOA a n d t h u s r e m a i n  An  a d m i n i s t r a t i v e board has taken  Assessment Appeal Board concluded the  provisions valid.  the opposite  v i e w . The  that a designation  under  o r i g i n a l A r c h a e o l o g i c a l and H i s t o r i c S i t e s P r o t e c t i o n  Act  was i n c o n s i s t e n t w i t h t h e HCA a n d t h u s no l o n g e r  I n E s t a t e s I n v e s t m e n t L t d . v . The A s s e s s o r  valid.  f o r A r e a #09 - V a n -  29 couver  , t h e B o a r d was c o n c e r n e d w i t h t h e a s s e s s m e n t o f  property  i n t h e Gastown d i s t r i c t  been d e s i g n a t e d  as a h i s t o r i c  o f Vancouver.  The a r e a h a d  s i t e under t h e former a c t i n 1971.  When t h e s e c o n d A r c h a e o l o g i c a l a n d H i s t o r i c S i t e s P r o t e c t i o n "50 Act^  was p a s s e d i n 1 9 7 2 , t h e t r a n s i t i o n r u l e s i n s u r e d t h a t t h e  d e s i g n a t i o n remained v a l i d no  transition rules,  b u t b e c a u s e t h e HCA was p a s s e d  the Board concluded  with  that the previous  d e s i g n a t i o n was i n c o n s i s t e n t w i t h t h e new a c t f o r s e v e r a l reasons. Secretary;  Firstly,  t h e d e s i g n a t i o n was made by t h e P r o v i n c i a l  current designations  tenant-Governor i n C o u n c i l .  were t o be made by t h e L i e u -  Secondly, under the o l d system,  an owner c o u l d a l t e r o r d e m o l i s h t h e new s y s t e m r e q u i r e d p e r m i t s Thirdly, the previous by  the province;  the structure with a permit; or the approval  statute provided  of council.  f o r general  designation  t h e new s t a t u t e s e t u p a d u a l s y s t e m whereby  b o t h p r o v i n c i a l a n d m u n i c i p a l h e r i t a g e s i t e s were c r e a t e d . the Board's o p i n i o n , t h i s p r o v i d e d so t h a t i f b o t h h a d d e s i g n a t e d  a veto  In  t o one j u r i s d i c t i o n  a s t r u c t u r e , d e m o l i t i o n was o n l y  9  available  i f both agreed  to i t .  T h i s f i n a l r e a s o n h a s no new  legitimacy.  In f i n d i n g  d u a l system of p r o t e c t i o n i n the H e r i t a g e  this  Conservation  A c t , the Board n e g l e c t e d to n o t i c e t h a t a d u a l system e x i s t e d w i t h t h e A r c h a e o l o g i c a l and  had  Historic Sites Protection  31 Actf Act^  2  and  t h e two  o t h e r e n a c t m e n t s , s. 7 H A  o f the M u n i c i p a l  and  s. 564A o f t h e V a n c o u v e r C h a r t e r ^ .  The  latter  two  s t a t u t e s p r o v i d e d the m u n i c i p a l d e s i g n a t i o n power c o n s i s t e n t w i t h t h e power g i v e n u n d e r s.  11 o f t h e HCA  s t a t u t e p r o v i d e d the p r o v i n c i a l power. p r o v i n c i a l designating bodies  The  and  the  former  d i f f e r e n c e i n the  b e t w e e n t h e two  a c t s d i d not  pro-  v i d e an i n c o n s i s t e n c y i n c a p a b l e o f b e i n g a d m i n i s t e r e d u n d e r new  act.  nearly  The  a l t e r a t i o n and  d e m o l i t i o n a p p r o v a l s y s t e m s were  i d e n t i c a l u n d e r t h e two  vincially  designated  systems.  The  owner o f a  s t r u c t u r e continued to require a  f r o m a g o v e r n m e n t m i n i s t e r and site  and  564A.  No  pro-  permit  t h e owner o f a m u n i c i p a l h e r i t a g e  c o n t i n u e d t o r e q u i r e a p p r o v a l o f c o u n c i l as u n d e r  ss. 7HA  the  inconsistencies existed.  under the p r e v i o u s enactments remain  both  Designations  valid.  B. I n t e r p r e t a t i o n Delegated generally  powers, l i k e  those  i n t e r p r e t e d narrowly  of m u n i c i p a l i t i e s ,  and  literally  are  by c o u r t s .  The  34  E & J Murphy L t d . property laws, are l i k e l y  case  i s clearly  because they  t o be  an e x c e p t i o n .  Heritage  deal with private property  i n t e r p r e t e d very  J u s t s u c h an a p p r o a c h was  rights,  strictly.  taken  by t h e Supreme C o u r t  of  10  Canada i n Trustees Corporation  o f S t . P e t e r l s E v a n g e l i c a l Church v. The  o f the C i t y o f Ottawa  .  The case demonstrated  e x a c t l y how s t r i c t the powers w i l l be i n t e r p r e t e d . i n v o l v e d Ottawa's l a s t remaining r e s i d e n c e Century u p p e r - c l a s s  r e s i d e n t i a l area.  The case  from an e a r l y 1 9 t h  The landowner, a church  o r g a n i z a t i o n , purchased the home w i t h the i n t e n t i o n o f demoi l i s h i n g i t and expanding i t s p a r k i n g  lot.  issue a demolition  i t invoked the powers o f  permit.  s. 29 o f the Ontario  Instead,  Heritage  as a h e r i t a g e p r o p e r t y .  C o u n c i l r e f u s e d to  36 Act designating  The d e s i g n a t i o n  the s t r u c t u r e  protected  the s t r u c t u r e  because no a l t e r a t i o n s c o u l d occur without the w r i t t e n  consent  37 of c o u n c i l  .  Soon a f t e r  s  the d e s i g n a t i o n ,  the church a p p l i e d  to c o u n c i l f o r consent t o demolish under s. 34 o f the A c t . T h i s s e c t i o n gave c o u n c i l n i n e t y cation.  When c o u n c i l r e f u s e d  days t o c o n s i d e r  the a p p l i c a t i o n , the Act auto-  m a t i c a l l y p r o h i b i t e d any d e m o l i t i o n the next 180 days.  the a p p l i -  o r any work to occur f o r  When the 180 days e x p i r e d ,  would be allowed to demolish the b u i l d i n g .  the owner  Under s. 3 4 ( 2 ) ,  c o u n c i l was r e q u i r e d t o give n o t i c e t o the owners o f i t s r e f u s a l within ninety  days o f the a p p l i c a t i o n being  received.  Without g i v i n g n o t i c e , the c o u n c i l was "deemed to have consented to the a p p l i c a t i o n . "  C o u n c i l never gave formal n o t i c e but the  church knew a t a l l times t h a t t h e i r a p p l i c a t i o n had been r e fused.  The c i t y ' s a c t i o n s had been h i g h l y p u b l i c i z e d and the  owners were present  a t the c o u n c i l meeting.  ninety-day p e r i o d expired,?,,the  Soon a f t e r the  c i t y attempted to serve the  church l e a d e r s w i t h n o t i c e o f t h e i r r e f u s a l .  The s e r v i c e was  11  refused.  Very e a r l y the next morning, the church began demo-  l i t i o n of the s t r u c t u r e . expired.  The  city  The  180-day p e r i o d had  then sought damages and  stop the d e m o l i t i o n .  In response, the church a p p l i e d f o r  In both the Ontario c i t y was  by-law.  High Court^aaand the Court of Appeal  s u c c e s s f u l because both c o u r t s h e l d t h a t  Since  c o u n c i l c o u l d prove t h a t i t d i d not  to the a p p l i c a t i o n and  is  consent  thus the owners of the b u i l d i n g knew  of the r e f u s a l , the c o n t r a r y On f u r t h e r a p p e a l ^ ,  c o u l d be  proven.  the Supreme Court found t h a t the  was  remedial and  Mr.  J u s t i c e Mclntyre i n d i c a t e d that s i n c e the Act was  to provide  ,  the  word "deemed" i n s. 34 meant "deemed u n t i l the contrary proved."  not  an i n j u n c t i o n to  j u d i c i a l review of the o r i g i n a l d e s i g n a t i n g  the  clearly  thus should  be construed  f o r the c o n s e r v a t i o n  and  Act  i n a purposive manner.  p r o t e c t i o n of  h e r i t a g e , the L e g i s l a t u r e must have intended  enacted  Ontario's  to give munic-  i p a l i t i e s wide powers to i n t e r f e r e w i t h i n d i v i d u a l property rights.  But  the p r e s e r v a t i o n purpose of the  not have been accomplished by t o t a l l y p r o v i s i o n s of the A c t . m u n i c i p a l i t y only  180  The  The  disregarding certain  scheme of the A c t , i n a l l o w i n g  t h a t the cost o f p r e s e r v a t i o n was  be borne by the community and owner.  should  the  days to p r o t e c t the b u i l d i n g beyond d e s i g -  n a t i o n , made i t evident  property  statute  not  Act provided  to  at the cost of the i n d i v i d u a l a d e t a i l e d scheme of procedure  to govern the e x e r c i s e of the m u n i c i p a l  powers and,  i f followed,  the procedure would achieve the goals of the s t a t u t e and, the same time, p r o t e c t the property  owner.  at  These p r o v i s i o n s  12  had  t o be  the  city  for  longer than  city  given e f f e c t . to h o l d the  Justice  interpretation Act  .  cated  Estey  notice.  Court  dissented preferring  as s p e c i f i e d  Estey  until  a very  by  the O n t a r i o  Hickey  f o l l o w e d the  Ontario  Court  would save Following  two  2  a large,  the  found  the l e g i s l a t i o n  approach.  this principle,  Mr.  He  indi-  accomplished  with  formal  p r e v i o u s d e c i s i o n s i n the  For  or  a u t h o r i t y , he  Justice  t h a t such  from  liberal  a c t u a l knowledge w i t h  i n w h i c h Mr.  of Appeal  ordered  "deemed c o n c l u s i v e l y "  contrary i s proved."  v. S t a l k e r ^  rights  Interpretation  strong purposive  "deemed" t o e q u a l  the  of his  allowed  structure.  construction equating  found  Court  The  t h a t t h e g o a l o f t h e A c t would o n l y be  a liberal  and  contemplated.  the  Estey  took  w o u l d have  landowner i n suspension  the A c t  to de-designate Mr.  To h o l d o t h e r w i s e  of  the  interpretation  b e i n g u n j u s t and  Justice  "deemed  followed  Middleton an  case  absurd.  C a r t w r i g h t o f the  Supreme  stated: In many c a s e s , w h i c h c a n e a s i l y be i m a g i n e d , t o c o n s t r u e t h e word "deemed" . . . as " h e l d c o n c l u s i v e l y " w o u l d be t o impute t h e L e g i s l a t u r e t h e i n t e n t i o n o f r e q u i r i n g t h e c o u r t t o h o l d t o be f a c t s o m e t h i n g d i r e c t l y c o n t r a r y t o t h e t r u e f a c t . . ..43  In  the p r e s e n t  the  demolition.  and  actively  case,  Because they  participated  were a d e q u a t e l y s u r d t o deem t h e One  c o u n c i l d i d e v e r y t h i n g but  protected.  had  i n the  full  l a c k o f n o t i c e as  commentator c r i t i c i z e d  knowledge o f t h e  process,  Therefore,  consent  the p r o p e r t y  events owners  i t w o u l d have been  ab-  consent.  the m a j o r i t y ' s d e c i s i o n  cause o f i t s s t r i c t a p p r o a c h t o the  to  interpretation  of  be-  the  13  heritage tecting priate  statute.  the p r i v a t e property unless  prejudiced had it  Richards^  found  t h a t t h e e m p h a s i s on p r o -  rights  of individuals  was  the m u n i c i p a l i t y ' s p r o c e d u r a l mistake  the enjoyment  o f those  rights.  complete knowledge o f t h e c i t y ' s  Since  intention  actually  the church  and a c t i o n s ,  was n o t p r e j u d i c e d by t h e l a c k o f f o r m a l n o t i c e . I cannot agree w i t h t h i s  tinue  the t r a d i t i o n  municipalities individuals. just  of strictly  especially  Courts  interpreting  when t h e y  This s t r i c t  implementation  criticism.  should  involve property  interpretation  Firstly,  protect significant  communities from d e m o l i t i o n . provide  And s e c o n d l y ,  owner's p r o p e r t y right  preserves  rights  to demolish the b u i l d i n g  the law should  interferes  laid  structures with the  suspends  f o r a short period or  i n perpetuity.  To i n s u r e , t h e  r e c e i v e s a l l t h e p r o t e c t i o n t o w h i c h he i s e n t i t l e d , cedural rules  purpose.  s t r u c t u r e s i n our  whether the by-law merely  the b u i l d i n g  f o r the  I t must be  a d e q u a t e p r o t e c t i o n f o r t h e owners o f t h e s e  because a d e s i g n a t i o n by-law d r a s t i c a l l y  rights of  i s important  o f h e r i t a g e p r o t e c t i o n laws.  the law should  con-  t h e powers o f  remembered t h a t h e r i t a g e p r o t e c t i o n l a w s have a d u a l  the  inappro-  owner the pro-  down i n t h e e n a b l i n g s t a t u t e s must be  strictly  followed. C. R e a s o n s f o r D e s i g n a t i o n The  Heritage  Conservation  government and m u n i c i p a l heritage  value.  Act  allows  the p r o v i n c i a l  c o u n c i l s to designate  But l i t t l e  guidance  i s given  properties with i n what makes a  property  worthy o f d e s i g n a t i o n .  1 o f t h e A c t as b e i n g  "Of  "Heritage"  historic,  i s d e f i n e d i n s.  architectural,  archae-  o l o g i c a l , p a l a e o n t o l o g i c a l , or scenic s i g n i f i c a n c e to province  o r a m u n i c i p a l i t y , as t h e  nition i s clearly and  c a s e may  be."  the  This  w i d e r t h a t t h a t used inssome o t h e r  defi-  provinces^  i n the p r e v i o u s m u n i c i p a l h e r i t a g e d e s i g n a t i o n powers  this province.  S e c t i o n 564A o f t h e V a n c o u v e r C h a r t e r ^  of  and  4.8 s e c t i o n 714A  of the M u n i c i p a l A c t ^  allowed  designation  of  p r o p e r t i e s t h a t were e v i d e n c e o f t h e m u n i c i p a l i t y J s h i s t o r y , c u l t u r e , and  heritage.  "scenic" structures. nate a e s t h e t i c a l l y or a r c h i t e c t u r a l  no  power t o  This addition provides  pleasing property  t h a t may  d e t a i l e d standards  i n s u r e t h a t only the  truly  e x a m p l e o f more s p e c i f i c  " h i s t o r i c and  t h e power t o h a v e no  desig-  historic  for designation  an i n d i v i d u a l w i t h more c e r t a i n t y as t o  p o t e n t i a l r e s t r i c t i o n of h i s property.  An  designate  significance.  More s p e c i f i c and would p r o v i d e  T h e r e was  significant standards  the  More d e t a i l w o u l d s t r u c t u r e s are i s the  c u l t u r a l s i g n i f i c a n c e " u s e d by  protected.  definition the  City  also  of  of  Seattle. To be d e s i g n a t e d , a b u i l d i n g must h a v e : s i g n i f i c a n t c h a r a c t e r , i n t e r e s t o r v a l u e as p a r t o f t h e development, h e r i t a g e or c u l t u r a l c h a r a c t e r i s t i c s of the C i t y , s t a t e or n a t i o n , or i s a s s o c i a t e d w i t h the l i f e o f a p e r s o n s i g n i f i c a n t i n t h e p a s t o r an h i s t o r i c e v e n t w i t h a s i g n i f i c a n t e f f e c t on s o c i e t y . 4 9 50 According  to Duerkson^  , such d e t a i l i s p r e f e r a b l e over  d e f i n i t i o n s u c h as " H i s t o r i c a l was  u s e d by  standard  the  City of D a l l a s .  were r u l e d i n v a l i d  i n c l u d e s a l l of the p a s t " Designations  because o f the  a which  following this 51 vagueness . In  15  Canada, the Ontario M u n i c i p a l Board i n v a l i d a t e d a by-law t h a t p r e s c r i b e d b u i l d i n g s had to conform to a " h e r i t a g e concept" because the phrase was undefined  and so vague t h a t i t d i d not CO  provide  any guidance whatsoever to i n t e r p r e t a t i o n .  Despite wide d i s c r e t i o n i n B r i t i s h Columbia to determine e x a c t l y what a h e r i t a g e s t r u c t u r e i s , the s u f f i c i e n c y of the reasons f o r d e s i g n a t i o n cannot be questioned  by a c o u r t .  In  Murray v. The C o r p o r a t i o n o f the Township o f Richmond^, the owner o f a designated  property  a p p l i e d to have the d e s i g n a t i n g  by-law quashed because there was no evidence s i g n i f i c a n c e o f the s i t e . Court  o f any h i s t o r i c a l  Mr. J u s t i c e Gould o f the Supreme  found t h a t so l o n g as there i s some evidence  s i g n i f i c a n c e , the Court  c o u l d not s u b s t i t u t e i t s own o p i n i o n  as to whether the evidence evidence  of heritage  was s u f f i c i e n t .  C o u n c i l had some  because i t acted on the advice o f i t s R e c r e a t i o n a l  Department^. B r i t i s h Columbia m u n i c i p a l i t i e s are not r e q u i r e d to provide (55  reasons f o r d e s i g n a t i o n . Other p r o v i n c e s , notably O n t a r i o , 56 57 Nova Scotia-^ , and Saskatchewan^ , r e q u i r e the m u n i c i p a l i t y % t o provide w r i t t e n reasons f o r the d e s i g n a t i o n .  T h i s would  prevent  the l e g i t i m a t e use o f the d e s i g n a t i o n power f o r some  reason  other than p r e s e r v a t i o n such as to stop an unpopular  develop-  ment.  S t a t e d reasons would a l s o provide  evidence  that  careful  r e s e a r c h was undertaken to determine t h a t the b u i l d i n g was truly  significant.  Designation  c o u l d thus be d e t e r r e d .  because o f " w i n d s h i e l d  surveys"  16  D.  The  Mechanics of  1. P r o v i n c i a l  Designation  Designation  58 The s i t e s may  Heritage  Conservation  be designated  v i n c i a l government.  designate  or p e r s o n a l property  provides that heritage  by e i t h e r a m u n i c i p a l i t y or the  P a r t 2 of the Act deals with  heritage conservation. i n C o u n c i l may  Act  Under s. 4 ( 1 ) , the  provincial  Lieutenant-Governor  land as a p r o v i n c i a l h e r i t a g e  as a h e r i t a g e o b j e c t .  pro-  Unlike  site  other  p r o v i n c e s , there i s no requirement i n B r i t i s h Columbia to r e g i s t e r the d e s i g n a t i o n a g a i n s t the p r o p e r t y ' s  title.  Section  6 p r o h i b i t s a l l persons from d e s t r o y i n g or a l t e r i n g a p r o v i n c i a l heritage s i t e . with a permit  The  b u i l d i n g may  only be a l t e r e d or demolished  i s s u e d by the M i n i s t e r i n charge of  administer-  59 i n g the Act or h i s delegate  .  Part 2 also includes several  s p e c i a l p r o v i s i o n s with r e s p e c t to a r c h a e o l o g i c a l s i t e s 2. M u n i c i p a l Heritage D e s i g n a t i o n Most h e r i t a g e p r o t e c t i o n occurs at the m u n i c i p a l  .  level. 61  M u n i c i p a l d e s i g n a t i o n i s governed by P a r t 3 of the  Act  S e c t i o n 11 provides the power f o r m u n i c i p a l i t i e s to s t r u c t u r e s w i t h i n t h e i r boundaries.  The Act p r o v i d e s a f a i r l y  d e t a i l e d procedure f o r m u n i c i p a l i t i e s to f o l l o w . must give a property designation.  Council  owner n o t i c e of i t s i n t e n t i o n to  consider  Notice must be d e l i v e r e d by r e g i s t e r e d m a i l at  l e a s t ten days before the by-law w i l l be c o n s i d e r e d . days may  designate  Ten  be inadequate time f o r an owner to prepare an argument  17  against  designation.  Ten d a y s n o t i c e i s much l e s s  than  CO property that  owners r e c e i v e i n o t h e r  jurisdictions  a l l i n t e r e s t e d p a r t i e s know o f t h e i n t e n t i o n  nate,  council  a newspaper  i s a l s o r e q u i r e d to twice  of general  circulation  the s t r u c t u r e can only  exterior  with  altered  resolution^. lish  the approval  S e c t i o n 15(1)  a heritage advisory  matters.  The  have  designation  The with  committee  City  i n 1974  enacted  .  be d e m o l i s h e d o r i t s by way  to provide  of a  advice  i s t o be p u r e l y a d v i s o r y  estab-  on h e r i t a g e  as i t does  powers.  By-Law No.  4837.  municipal  The  heritage  b y - l a w was  under c o u n c i l ' s p r e v i o u s  Vancouver C h a r t e r  to desig-  t h a t c o u n c i l may  o f Vancouver d e s i g n a t e s  i t s Heritage  insure  publish a notice i n  of council  provides  committee  To  w i t h i n the m u n i c i p a l i t y  Once d e s i g n a t e d ,  not  .  sites  first  powers u n d e r t h e  but because o f t r a n s i t i o n  rules  discussed  66 earlier  , t h e b y - l a w and d e s i g n a t i o n s u n d e r i t s h o u l d  valid  and be a d m i n i s t e r e d  Act.  Since  protected The  1974,  fifty  under the H e r i t a g e  b u i l d i n g s have  Conservation  been d e s i g n a t e d  and  from d e m o l i t i o n . by-law's p r o h i b i t i o n s c l o s e l y  powers g i v e n u n d e r t h e HCA municipality *sjjurisdiction buildings designated vincial  remain  Crown.  The  f o l l o w the p r o t e c t i v e  b u t t h e b y - l a w may i n other  areas.  a r e owned by e i t h e r City  has no  exceed the S e v e r a l o f the  the f e d e r a l  jurisdiction  over  or  pro-  federally-  owned b u i l d i n g s s u c h a s t h e F e d e r a l B u i l d i n g i n t h e  Sinclair  67 Centre  .  The h e r i t a g e b y - l a w w o u l d a l s o have no  over f e d e r a l l y  application  r e g u l a t e d s t r u c t u r e s s u c h as the C a n a d i a n  18  N a t i o n a l Railway S t a t i o n S i m i l a r l y , the d e s i g n a t i o n o f b u i l d i n g s owned by the p r o v i n c i a l Grown are i n e f f e c t i v e . House was designated  by the C i t y  The o l d P r o v i n c i a l i n 1974.  Court  S e c t i o n 14(1)  of  69  the I n t e r p r e t a t i o n Act  binds enactments on the p r o v i n c i a l  Crown u n l e s s the enactment s p e c i f i c a l l y p r o v i d e s The  Heritage  Conservation  otherwise.  Act does not s p e c i f i c a l l y  the Crown from i t s o p e r a t i o n .  exclude  But s. 14(2) o f the I n t e r p r e -  t a t i o n Act exempts the Crown from p r o v i s i o n s with r e s p e c t to "the use or development o f l a n d , o r i n the p l a n n i n g ,  con-  s t r u c t i o n , a l t e r a t i o n , s e r v i c i n g , maintenance or use o f improvements . . .."  C l e a r l y , a heritage r e s t r i c t i o n i s just  such an enactment. Of a l l the p r o v i n c i a l h e r i t a g e s t a t u t e s 70 71 i n Canada, only the Saskatchewan' and Nova S c o t i a ' Heritage Property  Acts s p e c i f i c a l l y  municipal heritage  bind the p r o v i n c i a l Crown by  designations.  One p r o v i s i o n o f Vancouver's Heritage  In 1976,  i n v a l i d because o f improper d e l e g a t i o n . was amended to add a second schedule The  amendment  By-Law may be the by-law  o f designated b u i l d i n g s .  reads:  Those p a r t s o f b u i l d i n g s or s t r u c t u r e s more p a r t i c u l a r l y d e s c r i b e d i n Schedule B to t h i s by-law are hereby d e s i g nated as Heritage b u i l d i n g s or s t r u c t u r e s as the case may be p r o v i d e d t h a t approval i s hereby granted to any a l t e r a t i o n to the whole or any p a r t t h e r e o f where the proposed a l t e r a t i o n has been r e f e r r e d to the Vancouver Heritage Advisory Committee f o r a r e p o r t and subsequent t h e r e t o a v a l i d development permit i s i s s u e d a u t h o r i z i n g the same. S i x months l a t e r , s i x b u i l d i n g facades B by c o u n c i l .  The Heritage  were p l a c e d on Schedule  Conservation  72 Act' p r o h i b i t s  19  a l t e r a t i o n of the facade without the p r i o r a p p r o v a l o f c o u n c i l by r e s o l u t i o n .  The  designating  s t r u c t u r e , approval i s granted  the  by-law amendment presumes t h a t merely  so that the owner may  make any  the  c o u n c i l has  automatically  a l t e r a t i o n s so long as  development permit board e v e n t u a l l y  the  approves i t . In e f f e c t ,  d e l e g a t e d to the board i t s powers to approve  or r e j e c t intended a l t e r a t i o n s to a designated when i t was  by  g i v e n no  such power to d e l e g a t e .  structure The  delegation  to the development permit board of t h i s power i s not as approval by c o u n c i l by r e s o l u t i o n .  Improper  the same  delegation  7*5 makes t h a t p o r t i o n of the  by-law i n v a l i d  .  E. General Issues To be t r u l y e f f e c t i v e i n the p r o t e c t i o n of s i g n i f i c a n t buildings, a heritage  s t a t u t e must address s e v e r a l  including interim c o n t r o l , demolition The  Heritage C o n s e r v a t i o n Act  the  simplest  and  c o n t r o l and  issues enforcement.  i n B r i t i s h Columbia i s one  shortest heritage  s t a t u t e s i n Canada.  determine i t s e f f e c t i v e n e s s , i n a p r o t e c t i n g h e r i t a g e  of To  properties,  I w i l l compare i t s p r o v i s i o n s with the p r o t e c t i v e measures i n other Canadian s t a t u t e s .  P r i m a r i l y , I w i l l compare the  w i t h the A l b e r t a , Saskatchewan and  Ontario  A l b e r t a H i s t o r i c a l Resources A c t * ^  and  legislation.  HCA The  the Saskatchewan Heritage  75  Property Act  are probably the most comprehensive and  Canadian Heritage s t a t u t e s .  The  Ontario  Heritage Act  detailed is a  u s e f u l comparison because i t takes a d i f f e r e n t approach i n attempting to p r o t e c t the  structure.  20  1. Interim  Control  To be e f f e c t i v e , a h e r i t a g e p r o t e c t i o n s t a t u t e must p r o t e c t a s t r u c t u r e before as w e l l as a f t e r the formal n a t i o n process  takes p l a c e .  The  C i t y of V i c t o r i a  desig-  discovered  t h a t a l a c k of i n t e r i m c o n t r o l powers made t h e i r p r o t e c t i v e measures t o t a l l y  inadequate.  Upon a mere rumour of c o u n c i l  c o n s i d e r i n g d e s i g n a t i o n , property  owners were l e v e l l i n g  b u i l d i n g s i n order to keep the property development. lengthy property  free f o r future  Since d e s i g n a t i o n at t h a t time was  process r e q u i r i n g approval owners had  their  a fairly  by a p r o v i n c i a l m i n i s t e r ,  a great d e a l of time to demolish t h e i r 77  s t r u c t u r e s i n order to a v o i d the h e r i t a g e r e s t r i c t i o n s The  i n t e r i m p r o t e c t i o n measures of the Heritage  v a t i o n Act were d r a f t e d to remedy t h i s problem.  and  other r e g u l a t i o n s so t h a t i t may  cannot be a l t e r e d or destroyed days.  H  demolition  order a b u i l d i n g  f o r a p e r i o d of up to t h i r t y  T h i s i s to g i v e the c i t y an o p p o r t u n i t y  p o t e n t i a l h e r i t a g e value  Conser-  Section  of the Act g i v e s the m u n i c i p a l i t y the power to ignore permits  .  of the b u i l d i n g .  The  to assess c i t y can  the pro-  h i b i t d e m o l i t i o n or a l t e r a t i o n f o r a f u r t h e r s i x t y days once a d e s i g n a t i n g by-law i s i n t r o d u c e d .  The  f r e e z e on  ends when c o u n c i l r e j e c t s the by-law or at. the end s i x t y - d a y p e r i o d i f the by-law i s never adopted.  demolition of the The  freeze,  u s i n g both these p r o v i s i o n s , can l a s t f o r no l o n g e r than n i n e t y days.  T h i s system i s s i m i l a r with one e x c e p t i o n to 78 t h a t i n c l u d e d i n the Vancouver Charter p r o v i s i o n s . Under  21  the Vancouver Charter,  c o u n c i l was  l i a b l e f o r compensation i f  the b u i l d i n g was  not designated  14(2)  removes t h i s l i a b i l i t y  of the HCA  deeming the a c t i o n not The  during  the f r e e z e .  f o r compensation  to i n j u r i o u s l y a f f e c t the  removal of t h i s l i a b i l i t y  should  section  use.  B r i t i s h Columbia i n t e r i m p r o t e c t i o n measures are some  of the most e f f e c t i v e i n Canada.  Only Saskatchewan  a longer p e r i o d , s i x t y days, i n which d e m o l i t i o n  QQ  •7Q  .  In both A l b e r t a  of a  , demolition  can-  O-I  and  Ontario  serves  with n o t i c e of an i n t e n t i o n to d e s i g n a t e .  The  the owner British  p r o v i s i o n r e q u i r e s no n o t i c e to be e f f e c t i v e and  c o n t r o l and  Columbia  thus can  implemented much more q u i c k l y p r o v i d i n g g r e a t e r  The  frozen  value  not be p r o h i b i t e d u n t i l the m u n i c i p a l i t y  2. C o n t r o l of D e m o l i t i o n  provides  can be  to allow a survey or c o n s i d e r a t i o n of the h e r i t a g e property  by  property.  have made the  much more a t t r a c t i v e f o r m u n i c i p a l i t i e s to The  Sub-section  be  protection.  and A l t e r a t i o n  p r o h i b i t i o n of the d e m o l i t i o n  of  the  heritage  s t r u c t u r e i s the most v i t a l component of an e f f e c t i v e  heritage  power.  to a designated  Without t h i s c o n t r o l , the p r o t e c t i o n s t r u c t u r e w i l l be  afforded  useless.  In B r i t i s h Columbia, p r o v i n c i a l l y designated cannot be demolished or a l t e r e d u n l e s s  the owner  properties obtains 82  p r i o r w r i t t e n consent from the m i n i s t e r i n charge approval  .  process i s e a s i e r than the a c t u a l d e s i g n a t i o n  which r e q u i r e s approval give the d e s i g n a t i n g  by the e n t i r e c a b i n e t .  Other  body c o n t r o l over d e m o l i t i o n  This process provinces  requests  so  1  22  that e f f e c t i v e l y de-designation be demolished.  i s r e q u i r e d f o r a b u i l d i n g to  O n t a r i o p r o v i d e s no powers f o r p r o v i n c i a l  designation. M u n i c i p a l l y designated with the p r i o r approval nated  the p r o p e r t y ^ .  s t r u c t u r e s can only be  of the m u n i c i p a l  demolished  c o u n c i l that desig-  A r e s o l u t i o n and not a by-law i s the  8  form c o u n c i l s h a l l use  so t h a t i t does not need to f o l l o w  the same procedure i t f o l l o w e d i n d e s i g n a t i o n .  But  once d e s i g -  nated, the b u i l d i n g i s p r o t e c t e d from d e m o l i t i o n and  only  an  a c t i o n by c o u n c i l can remove t h a t p r o t e c t i o n . In O n t a r i o , the m u n i c i p a l  c o u n c i l does not n e c e s s a r i l y 85  control demolition.  Under the O n t a r i o Heritage Act  c i p a l c o u n c i l s have the power to designate  , muni-  heritage properties.  But d e s i g n a t i o n only e f f e c t i v e l y p r o t e c t s the s t r u c t u r e i f the owner does not o b j e c t . owner of a designated  Under s s . 32 and property  may  apply  33 of the Act, to the  an  municipal  c o u n c i l to have the d e s i g n a t i n g by-law r e p e a l e d or to o b t a i n consent f o r a l t e r a t i o n o f ; t h e b u i l d i n g i n a manner " l i k e l y a f f e c t the reason a review process  f o r designation."  to  T h i s w i l l s e t i n motion  but e v e n t u a l l y c o u n c i l ' s d e c i s i o n not  r e p e a l or to r e f u s e consent w i l l be f i n a l .  But,  to  i f the owner  wishes to demolish or remove the s t r u c t u r e , c o u n c i l cannot block i t i n d e f i n i t e l y .  The  r i g h t to demolish a s t r u c t u r e i s  e a s i e r to o b t a i n than the r i g h t to make a l t e r a t i o n s . s. 3 4 , the owner i s e n t i t l e d to apply to  demolish h i s p r o p e r t y .  Under  to c o u n c i l f o r consent  Upon r e c e i v i n g the owner's appli-*^ .-  c a t i o n , c o u n c i l i s g i v e n n i n e t y days to consent or r e f u s e .  23  Notice  o f the d e c i s i o n must be given to the owner w i t h i n 86  those ninety  days  .  I f c o u n c i l r e f u s e s to approve  a p p l i c a t i o n , the owner i s a u t o m a t i c a l l y  the  p r o h i b i t e d from  demolishing or removing the s t r u c t u r e f o r a p e r i o d of days from the date of c o u n c i l ! s r e f u s a l . p e r i o d e x p i r e s and  the owner has not  that p e r i o d , he may ture.  Once t h a t 180-day  volunteered  to extend  proceed to demolish or remove the  C o u n c i l has no power to withhold  180  struc-  the d e m o l i t i o n  permit  a f t e r that 180-day p e r i o d .  Therefore,  nated s t r u c t u r e may  the r i g h t to demolish h i s s t r u c -  acquire  ture merely by making a p p l i c a t i o n and of 270  days.  a designated heritage  The  s e c t i o n provides  s t r u c t u r e and  stances,  an Ontario  expropriate  w a i t i n g f o r a maximum  an i n c e n t i v e to demolish  thus p r o v i d e s  b u i l d i n g s i n Ontario  unsympathetic to h e r i t a g e  an owner of a d e s i g -  belonging  conservation.  m u n i c i p a l i t y ' s only  the s t r u c t u r e , as was  poor p r o t e c t i o n f o r to p r i v a t e owners Under such circumoptions  would be  to  recommended to c o u n c i l i n  87  the S t . P e t e r ' s case , or n e g o t i a t e some compromise with owner to save the s t r u c t u r e . In Re C o l l e g e S t r e e t Centre  the and  88  the C i t y of Toronto under the Ontario  , an owner of a b u i l d i n g  s t a t u t e was  designated  denied the r i g h t to destroy  an  important s e c t i o n o f the b u i l d i n g only because he had  previously  agreed under a development agreement with the c i t y to  protect  the h e r i t a g e  components of the b u i l d i n g .  In Saskatchewan, the p r o t e c t i o n a f f o r d e d a s t r u c t u r e through m u n i c i p a l  d e s i g n a t i o n may  v i n c i a l government.  A recent  be e l i m i n a t e d  amendment to the  by the Heritage  pro-  24  Property Act  states:  71.1(1). I f the m i n i s t e r i s of the o p i n i o n t h a t a d e s i g n a t i o n o r i n t e n d e d d e s i g n a t i o n o f any r e a l p r o p e r t y a s P r o v i n c i a l Heritage or Municipal Heritage Property would p r e c l u d e p r o c e e d i n g w i t h a development p r o j e c t t h a t i s o f m a j o r s i g n i f i c a n c e t o and b e n e f i t f o r t h e p e o p l e o f S a s k a t c h e w a n , he may, by o r d e r , exempt t h a t r e a l p r o p e r t y from such d e s i g n a t i o n . 8 9 I t i s very  important  that a truly  worthy s t r u c t u r e i s p r o t e c t e d  f r o m major r e d e v e l o p m e n t s u c h as the t y p e section.  The  contemplated  by  this  v e t o p o w e r by a p r o v i n c i a l m i n i s t e r r e m o v e s t h e  p r o t e c t i o n from the m u n i c i p a l by-law. d i l u t e s the o t h e r w i s e  The  amendment  effectively  a t t r a c t i v e p r o t e c t i v e measures o f  S a s k a t c h e w a n a c t and makes any  the  d e s i g n a t i o n under the Act  un^..  certain. One  a r e a i n w h i c h the powers o f B r i t i s h C o l u m b i a muni-  cipalities  are i n e f f e c t i v e  of designated persons  prohibits  from a l t e r i n g the e x t e r i o r of the designated  building.  be a l t e r e d w i t h o u t  rationale f o r this^must p u b l i c and  S e c t i o n 12 o f t h e HCA  interiors  only  I n t e r i o r s may  buildings.  i s i n p r o t e c t i o n of the  be  a p p r o v a l by c o u n c i l .  The  t h a t p r e s e r v a t i o n i s only f o r the  s i n c e the p u b l i c would only normally  e x t e r i o r s of s t r u c t u r e s , only the e x t e r i o r s  see  the  n e e d be  preserved.  T h i s i s u s u a l l y t r u e but f r e q u e n t l y the i n t e r i o r s o f h e r i t a g e s t r u c t u r e s are as v a l u a b l e as the e x t e r i o r s . t h e Orpheum T h e a t r e  i n Vancouver are designated  because o f t h e i r i n t e r i o r f e a t u r e s . s u c h as t h e f o r m e r  Buildings like  Other designated b u i l d i n g s  Canadian P a c i f i c Railway  t e r i o r f e a t u r e s t h a t s h o u l d be p r o t e c t e d . a l t e r a t i o n s o f t h e i n t e r i o r may  entirely  S t a t i o n have i n Control  be n e c e s s a r y  over  to insure  im-  25  portant h e r i t a g e f e a t u r e s are preserved.  F o r example,  p r e s e r v a t i o n i s t s have g r e a t l y c r i t i c i z e d the modernization and  r e h a b i l i t a t i o n o f the i n t e r i o r o f Vancouver's o l d Court  House, now the Vancouver A r t G a l l e r y , because much o f the 90  o r i g i n a l f e a t u r e s were abandoned  .  Even i f the m u n i c i p a l  d e s i g n a t i o n o f the p r o v i n c i a l l y - o w n e d  b u i l d i n g could have  been e f f e c t i v e , c o u n c i l would have had no c o n t r o l over t h i s i n t e r i o r work. M u n i c i p a l i t i e s i n other p r o v i n c e s i n t e r i o r h e r i t a g e space. building^  .  Designation  have c o n t r o l over p r o t e c t s the e n t i r e  T h i s approach a l s o presents  problems because  where the i n t e r i o r i s not s i g n i f i c a n t o r does not c o n t a i n s p e c i a l f e a t u r e s , the owner i s l i k e l y renovating  to be d e t e r r e d  from  and r e h a b i l i t a t i n g h i s i n t e r i o r space because o f  the requirement t h a t every change be approved by the d e s i g n a t i n g body.  F o r example, the Saskatchewan s t a t u t e r e q u i r e s  t h a t d e t a i l e d plans be presented  before  c o u n c i l may approve  92  of any renovations renovation The  process  .  T h i s would add time and expense to the  n o t s u f f e r e d by other property  owners.  C i t y o f Winnipeg has developed a scheme whereby b u i l d i n g s  are c l a s s i f i e d as to the extent  o f r e s t r i c t i o n s necessary to 93  p r o t e c t them.  The Winnipeg by-law  i n t o f o u r grades.  divides heritage  F i r s t Grade b u i l d i n g s are those i n which  the e n t i r e s t r u c t u r e , i n c l u d i n g the i n t e r i o r , protection.  properties  i s worthy o f  Renovations o f any p a r t o f the s t r u c t u r e could  only be made with p r i o r approval  of c o u n c i l .  With Second  Grade s t r u c t u r e s , only the e x t e r i o r and s p e c i f i e d elements  26  o f the  interior  are  restricted  o f T h i r d Grade b u i l d i n g s o n l y structure.  Fourth  only  o f the  structure.  do  require prior  system  necessary  to  be  in  designating  o f the  limited  features  for  the  and  renovations  obtaining  the  to  interior  by-law.  f o r the by  e x t e r i o r of  should  only  designating  o f the  areas  rehabilitation  council's  by  buildings This  protection for  truly  renovations  structure. be  given  s t r u c t u r e s but  i f they  power,  form  part  thus a v a i l a b l e  that a l t e r a t i o n s  b u i l d i n g t h a t may  o f the  power  detailed  this  p u b l i c and  insure  the  that control  specifically  protected  of the  removal  body.  further restrict be  the  protection  or  unduly h i n d e r i n g  T h i s would  r e g u l a t i o n nor  least  p a r t o f the  features  To  Designation  demolition  necessary  of designated  of other  be  structure w i l l  not  a time-consuming process  for  be  approval.  Maintenance Preservation  is  by  rehabilitation  p u b l i c to view.  hindered  3.  the  s t r u c t u r e g e n e r a l l y open t o t h e  necessary  the  Columbia m u n i c i p a l i t i e s should  should  interior  approval  to provide  control interiors  the  restricts  f e a t u r e s without  f o r the  British  regulates  R e n o v a t i o n s t o any  i s designed  worthy h e r i t a g e  designation.  Grade b u i l d i n g s r e c e i v e the  because d e s i g n a t i o n  not  by  designated  and  i s an  on-going process.  protected  from d e m o l i t i o n ,  ist's  concern continues  because  asset  to the  the  tained.  The  community,  Once t h e  i n order  property  preservation*  to remain a  must be  maintenance of a h e r i t a g e  the  building  valuable  properly  property  may  main-  require  27  s p e c i a l a t t e n t i o n to insure that o l d materials f e a t u r e s do not d e t e r i o r a t e . proper maintenance continues  A municipality  and s i g n i f i c a n t  could  by n e g l e c t "  By doing so,  c o u l d be e l i m i n a t e d ^ .  T h i s problem occurs when an owner o f a designated tially  designated  property.  that  i f i t had the power to impose  a f f i r m a t i v e maintenance standards on the owner. the problem o f " d e m o l i t i o n  insure  structure neglects  or a p o t e n ^ i  the maintenance o f h i s  The b u i l d i n g d e t e r i o r a t e s and becomes so u n a t t r a c t i v e  t h a t the p u b l i c w i l l be l e s s sympathetic to i t s p r o t e c t i o n . There w i l l thus be much l e s s p o l i t i c a l pressure p r o t e c t the s t r u c t u r e through d e s i g n a t i o n . occurred  i n the C i t y o f Vancouver i n 1977.  ci;ty c o u n c i l r e f u s e d o l d e s t standing the school's  to designate  school.  on c o u n c i l to  Such circumstances At t h a t time, the  what was then the c i t y ' s  A major reason f o r the r e f u s a l was  owners had l e f t the b u i l d i n g vacant and had  seriously neglected  to m a i n t a i n the s t r u c t u r e so t h a t i t had  become an u n a t t r a c t i v e and d i l a p i d a t e d eyesore t h a t the m a j o r i t y 95 of the p u b l i c wished removed  .  When the d e s i g n a t i o n  was  denied, the owners demolished the s t r u c t u r e and r e p l a c e d i t with a p a r k i n g  lot.  Thus, a p o t e n t i a l l y worthy s t r u c t u r e was  demolished by n e g l e c t . B r i t i s h Columbia m u n i c i p a l i t i e s have no powers to impose maintenance c o n t r o l s on p r i v a t e owners u n l e s s  the s t r u c t u r e  becomes a danger to the p u b l i c or i s "so d i l a p i d a t e d or unclean 96 as to be o f f e n s i v e to the community." may order way.  At t h a t time, c o u n c i l  the s t r u c t u r e be removed or d e a l t with i n some  I f the owner does n o t h i n g ,  the m u n i c i p a l i t y may  other  enter  28  the property and e f f e c t the order i t s e l f with the owner being l i a b l e f o r a l l c o s t s or a u c t i o n o f f the s t r u c t u r e . likely  It i s  t h a t such an order would o v e r r i d e a h e r i t a g e d e s i g n a t i o n  because o f i t s involvement  with p u b l i c s a f e t y .  The O n t a r i o  97  act^' s p e c i f i c a l l y  i n d i c a t e s t h a t the d e s i g n a t i o n may be  ignored where the property i s i n an unsafe very l e a s t , the e x i s t e n c e o f an unsafe litically  condition.  At the  s t r u c t u r e would po-  f o r c e c o u n c i l to de-designate.  N e i t h e r the Heritage  Conservation A c t nor the two m u n i c i p a l e n a b l i n g a c t s provide any  powers f o r c o u n c i l to impose maintenance standards  the s t r u c t u r e reaches Very  a dilapidated  before  state.  few Canadian h e r i t a g e s t a t u t e s p r o v i d e powers to  impose minimum maintenance standards  on p r i v a t e h e r i t a g e QQ  property owners.  I n A l b e r t a , the H i s t o r i c a l Resources A c t  g i v e s the p r o v i n c i a l government the power to make r e g u l a t i o n s concerning the standards vincially  o f maintenance and s i g n s on a l l p r o -  designated heritage p r o p e r t i e s .  i s g i v e n to m u n i c i p a l i t i e s .  No s i m i l a r power  Saskatchewan allows m u n i c i p a l i t i e s  and the p r o v i n c i a l government to order a landmark owner to make s p e c i f i c r e p a i r s i f he has not observed tenance o f o p e r a t i o n procedures"  "accepted  main^  and where the i n t e g r i t y o f  qq  the s t r u c t u r e i s endangered  .  I f the owner i g n o r e s the order,  the m u n i c i p a l i t y may do the work i t s e l f . interest title^00.  I t then a c q u i r e s an  i n the l a n d f o r which i t may r e g i s t e r a caveat a g a i n s t Trie i n t e r e s t w i l l remain u n t i l the owner pays the  m u n i c i p a l i t y f o r a l l c o s t s o f the maintenance work. Under the present law, B r i t i s h Columbia m u n i c i p a l i t i e s  29  would have t o  impose m a i n t e n a n c e  agreements w i t h the municipality  owner.  to enter  Section  easements or  w i t h the  land.  power t o  impose m a i n t e n a n c e  would p r o v i d e specialized will  only  T h i s may  greater  to  of  the  i n that  Legislature  greater  power t o d e l e g a t e  the  general  covenant  standards could However, them.  to give  s t a n d a r d s on  best  municipalities  heritage  to  also give  c r e a t i o n and  enforcement  be  covenants  The the  flexibility,  a  will.run  s t a n d a r d s because the  impose m a i n t e n a n c e  allow  empowers  covenants that  owner a g r e e s t o  f o r the  HCA  restrictive  a b e t t e r approach than a  flexibility  work where t h e  power t o  and,  be  27  f o r each i n d i v i d u a l property.  s o l u t i o n w o u l d be the  standards through  properties  council of  the  the  standards 101  t o an 4.  administrative  Relaxation One  official  of B u i l d i n g  deterrent  o r a committee  of experts  .  Codes  to r e s t o r a t i o n i s t h a t  the  development  will  have t o comply w i t h b u i l d i n g c o d e s . I t may be e x h o r b i t a n t l y e x p e n s i v e or i m p o s s i b l e to upgrade o l d e r b u i l d i n g s to the 102 levels the a  required  example  stairway  building do  not  was  code.  b u i l d i n g codes.  two  inches  too  To  insure  that  being  statutes  designated  Act  provides  provide  properties.  that  the  designated  delayed  narrow, thus v i o l a t i n g the  b u i l d i n g code  f o r r e l a x a t i o n of The  from  because a modern  projects, the  may  gave  requirements some  regulations  Alberta Historical  provincial minister structure  Duerkson  severely  i n t e r f e r e with r e h a b i l i t a t i o n  for  vincially  municipal  of a p r e s e r v a t i o n  unduly  heritage  by  Resources  exempt a  pro-  b u i l d i n g c o d e s where  the  30  enforcement hinder  the  o f the  r e g u l a t i o n would " p r e v e n t  preservation,  I n S a s k a t c h e w a n , the Lieutenant-Governor or m u n i c i p a l l y The  Heritage  power.  r e s t o r a t i o n , o r use  Heritage  Property  i n C o u n c i l may  designated  heritage  Conservation  V a n c o u v e r has  or s e r i o u s l y  Act  the  Act  o f the  provides  exempt e i t h e r a site  does n o t  from  the provincially  b u i l d i n g codes  provide  power t o r e l a x  site."  a similar  zoning  regulations  and"by-laws p r e s c r i b i n g r e q u i r e m e n t s f o r b u i l d i n g s " i f t h e i r 105 e n f o r c e m e n t would r e s u l t city's  Z o n i n g and  relaxation building  o f the  i n "unnecessary hardship"  .  D e v e l o p m e n t By-Law No.  3575 p r o v i d e s  zoning  not  regulations  but  c o d e s f o r r e s t o r a t i o n works on  The for  n e c e s s a r i l y of  heritage  sites.  the  Muni-  106 cipalities  governed  by  the  Municipal  Act  have no  such  flexibility. 5. Z o n i n g Powers Z o n i n g and heritage  l a n d use  conservation.  i n p r o t e c t i n g the does n o t  powers may  assist  Z o n i n g powers may  surrounding  area  s e r i o u s l y i n t e r f e r e with  to the  municipalities in be  insure  particularly t h a t new  integrity  of a  helpful  development heritage  107 structure.  Under s .  963  of the  Columbia m u n i c i p a l i t i e s are land  by  c r e a t i n g zones.  conservation, buildings that  the  o f the  Among t h e  w i t h i n each zone. size  existing heritage  Act  ,  empowered t o r e g u l a t e  m u n i c i p a l i t i e s may  allowable  Municipal  British the  powers i m p o r t a n t  regulate  Obviously,  the  size  i f the  o f a b u i l d i n g i s the s t r u c t u r e , there  to  same as  of  heritage  and  zoning  would be  use  siting i s set  the  less  of so  size incentive  31  for  a developer  Municipal  Act  t o d e m o l i s h and  also gives  replace  the  powers o v e r the  structure.  size  and  The  form of  signs  108 w i t h i n e a c h zone Alberta, as"the  .  Powers i n o t h e r  m u n i c i p a l i t i e s may  design,  character  provinces  specifically  and  appearance  are  regulate  wider.  such  In  features  of b u i l d i n g s " , land-  10°/ s c a p i n g , f e n c e s and t h e a l t e r a t i o n o f b u i l d i n g s . B r i t i s h C o l u m b i a m u n i c i p a l i t i e s have f u r t h e r powers u n d e r 110 the  development permit  Through the design  and  affecting these only  permit finish  the  of  p l a n as  Conservation requiring  Act,  limited  a designated approved  g u i d e l i n e s f o r the  i t ^ ^  .  A  The  regulate  of development  .  exterior  other  area.  factors  However,  the  permit  system  specified  i n the  official  heritage  site  revitalization f o r m and  u n d e r the area  character  objectives of t h i s  g u i d e l i n e s f o r d e v e l o p m e n t must be  Act  the  and  i n an  i n that  t o l a n d t h a t was  an  Municipal  buildings, landscaping  severely  introduced  community  within  s y s t e m , c o u n c i l may  character  powers a r e be  p r o v i s i o n s o f the  special  included  Heritage  o r an  of  area  development  treatment  i n the  can  and  the  official  110B plan  .  T h i s development permit  flexibility involving  i n the  a p p l i e s to  conservation.  planning  purpose.  The  direct zoning  zoning  of Winnipeg Act  preservation  the  Frequently,  purposes f o r which the City  or  structure.  heritage  the  little  c o n t r o l of development n e i g h b o u r i n g  a heritage  A caveat  system p r o v i d e s  an  use  powers must enabling  powers may  specifically  i s a planning  purpose  o f the  be  zoning be  used f o r  power w i l l used.  recognizes  powers f o r  list  For that  a the  example, heritage  b e c a u s e c o u n c i l must  consider:  32  the p r e s e r v a t i o n , p r o t e c t i o n and enhancement o f areas o f land, b u i l d i n g s , s t r u c t u r e s and s i t e s o f h i s t o r i c a l , a r c h a e o l o g i c a l , g e o l o g i c a l , a r c h i t e c t u r a l , environmental, or s c e n i c s i g n i f i c a n c e . 1 1 1  New amendments to the M u n i c i p a l  A c t may make h e r i t a g e 1  vation a v a l i d planning municipal heritage  1  purpose i n B r i t i s h Columbia  A  . A  c o u n c i l may designate areas f o r the p r o t e c t i o n o f s i t e s d e s i g n a t e d under the HCA but the p r o t e c t i o n o f  undesignated h e r i t a g e The  i  preser-  properties  i s not made a p l a n n i n g  purpose.  Vancouver C h a r t e r does not have a s i m i l a r s e c t i o n . J u r i s d i c t i o n s where h e r i t a g e  c i f i c a l l y made a p l a n n i n g  conservation  i s not spe-  purpose are l i k e l y governed by The 112  C i t y o f Edmonton v. Tegon Developments  .  The Tegon case  indicated that heritage  conservation  was not an a p p r o p r i a t e  planning  purpose u n l e s s  s p e c i f i c a l l y expressed to be i n the  enabling  legislation.  The f a c t s o f the case are the C i t y o f  Edmonton passed a r e s o l u t i o n t h a t attempted to r e s t r i c t demol i t i o n and any development t h a t would d e t r a c t from the p r e s e r v a t i o n o f the h i s t o r i c  Old Strathcona D i s t r i c t .  F o l l o w i n g the  r e s o l u t i o n , development permit a p p l i c a t i o n s c o u l d  be r e j e c t e d  on the b a s i s o f 2"lack o f harmony" with b u i l d i n g s o f the early and  1900's.  Buildings  could  only  be e r e c t e d  i f the facade  design were sympathetic to surrounding b u i l d i n g s and to  the p e r i o d a r c h i t e c t u r e o f the d i s t r i c t . o f f i c e r had to c o n s i d e r  The permit i s s u i n g  above a l l the p o t e n t i a l f o r  preser-  v a t i o n o f the area's a r c h i t e c t u r e by r e s t o r a t i o n or r e p l a c e ment. powers  The c i t y r e l i e d on i t s zoning and development c o n t r o l as a u t h o r i t y  to make the r e s o l u t i o n .  Those  33  powers gave c o u n c i l the r i g h t to make r u l e s s r e s p e c t i n g the of land or "any ment."  Mr.  J  s p e c i a l aspects  of s p e c i f i c kinds of develop-  J u s t i c e Moir of the A l b e r t a Court  t h i s r e s o l u t i o n was  not  of Appeal found  concerned with "this purpose.  the r e s o l u t i o n ' s purpose was  use  expressly  Instead,  s t a t e d to be to  preserve  the h i s t o r i c a l s t r u c t u r e s pending d e s i g n a t i o n under the  Alberta  114  H i s t o r i c a l Resources Act from two  heritage foundations.  could only  to e n t i t l e the c i t y The  to  grants  zoning power g i v e n the  be e x e r c i s e d f o r the purpose f o r which i t was  P r e s e r v a t i o n of h i s t o r i c law.  and  As a c r e a t u r e  s i t e s was  city  given.  not a purpose of the l a n d  use  of s t a t u t e , m u n i c i p a l i t i e s must e x e r c i s e  t h e i r powers only f o r the purpose f o r which they were g i v e n . Old Strathcona  R e s o l u t i o n was  declared  invalid.  The  At the Supreme  115  Court  of Canada, Moir's d e c i s i o n was If heritage conservation  i s not  affirmed.  .  a v a l i d planning  then the C i t y of Vancouver's H i s t o r i c a l Area zoning are l i k e l y u l t r a v i r e s .  The  Law  H i s t o r i c Area (HA)  no.  3 5 7 5 c r e a t e d two  town ( H A - 1 )  purpose,  regulations  c i t y ' s Zoning and Development  and Gastown (HA-2).  approved f o r the Yaletown area  D i s t r i c t s i n China-  A t h i r d HA D i s t r i c t has .  The  By-  been  D i s t r i c t Schedule of  the  by-law s t a t e s the i n t e n t of the HA-2 D i s t r i c t i s as f o l l o w s : Gastown i s the s i t e of the o l d G r a n v i l l e Townsite and i t i s from t h i s area t h a t the C i t y of Vancouver developed and grew. This D i s t r i c t Schedule i s designed to recognize the area's s p e c i a l s t a t u s and to ensure the maintenance of Gastown's " t u r n of the century" h i s t o r i c a l and a r c h i t e c t u r a l c h a r a c t e r . The Chinatown Schedule has a s i m i l a r i n t e n t . Both schedules give h e i g h t ,  s i z e and  use  r e g u l a t i o n s f o r b u i l d i n g s i n the 117  d i s t r i c t , a s authorized  by s. 5 6 5 of the Vancouver Charter  '.  34  But what the Charter does not a u t h o r i z e i s the need f o r approval of a l l proposed a l t e r a t i o n s or e x t e r i o r changes to the b u i l d i n g . C l e a r l y , t h i s need f o r approval restriction. property  i s the same as a h e r i t a g e  Since the a l t e r a t i o n r e s t r i c t i o n i n f r i n g e s on the  owner's r i g h t s , the power to r e s t r i c t must be very  e x p r e s s l y given by the L e g i s l a t u r e . g i v e n i n the Vancouver Charter  There i s no c l e a r power  to c o n t r o l a l t e r a t i o n s i n t h i s  S e c t i o n 5 6 5 ( d ) allows the c i t y to r e g u l a t e the "ex-  manner.  t e r n a l design of b u i l d i n g s to_ be e r e c t e d w i t h i n the  designated  118 d i s t r i c t s or zones." r e g u l a t i o n to new  The words, "to be e r e c t e d " l i m i t the  c o n s t r u c t i o n and exclude  b u i l d i n g s already e r e c t e d .  S e c t i o n 565A  r e g u l a t e "development" through a permit  design changes to allows c o u n c i l to  system.  Section 5 5 9  d e f i n e s development as"a change i n the use o f any l a n d or b u i l d i n g , i n c l u d i n g the c a r r y i n g - o u t of any c o n s t r u c t i o n . . .." 119 " C o n s t r u c t i o n " i n c l u d e s a l t e r a t i o n and d e m o l i t i o n e x t e r n a l a l t e r a t i o n may  so that  be r e g u l a t e d by development  permits.  However, the i n t e n t of the HA D i s t r i c t s i n Vancouver i s e x p r e s s l y given as p r e s e r v a t i o n o f the area's  c h a r a c t e r as a h i s t o r i c  site.  T h i s i s the same purpose that the courts r u l e d i n v a l i d f o r the e x e r c i s e of zoning and development permit  powers i n the Tegon  120 case  .  Therefore,  without  the express l e g i s l a t i v e  recog-  n i t i o n of p r e s e r v a t i o n as a purpose o f zoning powers, the HA D i s t r i c t r e g u l a t i o n governing  a l t e r a t i o n s may  be  invalid.  C l e a r l y , the L e g i s l a t u r e intended  a municipality's preservation  powers should be l i m i t e d to those  given i n the Heritage Conser-  vation Act.  35  One  advantage the C i t y of Vancouver has over  m u n i c i p a l i t i e s i s t h a t i t may i n c e r t a i n cases.  other  r e l a x i t s zoning r e g u l a t i o n s  S e c t i o n 5 6 5 A ( e ) of the Charter p r o v i d e s  the power to r e l a x a zoning by-law where i t s l i t e r a l ment would r e s u l t i n "unnecessary  hardship."  The  enforce-  only r e -  s t r i c t i o n i s t h a t the r e l a x a t i o n must not a l l o w m u l t i p l e occupancy s t r u c t u r e s i n one-family power to r e l a x may  The  be h e l p f u l to h e r i t a g e p r e s e r v a t i o n i n  that g r e a t e r f l e x i b i l i t y  i n the use of the b u i l d i n g  encourage i t s p r e s e r v a t i o n . to  d w e l l i n g zones.  The  may  C i t y of Vancouver appears  have r e c o g n i z e d t h i s because the Zoning  and Development  By-Law delegates to the Development Permit Board and  the  D i r e c t o r of P l a n n i n g the r i g h t to make zoning r e l a x a t i o n s f o r heritage preservation. 565A(e).  The power to delegate  i s g i v e n i s s.  S e c t i o n s 3 . 2 . 5 and 3 . 2 . 6 of the by-law give the  power to r e l a x the by-law's r e g u l a t i o n s where the enforcement would not a l l o w the r e s t o r a t i o n and of  renovation  s i t e s with a r c h i t e c t u r a l , h i s t o r i c a l or c u l t u r a l m e r i t . "  The Heritage Advisory Committee must support any c o n s e r v a t i o n work. of  "literal  I t i s arguable whether the  r e s t o r a t i o n i s an "unnecessary  the C h a r t e r .  The permit  prevention  h a r d s h i p " as r e q u i r e d under  Proof of economic h a r d s h i p may  obtain a r e l a x a t i o n .  proposed  be necessary  board has d i s c r e t i o n to  r e f u s e or approve w i t h c o n d i t i o n s a development permit c a t i o n where the development may  to  adversely a f f e c t  appli-  significant  b u i l d i n g s with p o s s i b l e h e r i t a g e value on the s i t e or i n the surrounding a r e a  121  .  M u n i c i p a l i t i e s governed by the M u n i c i p a l  36  Act  do not have the same powers.  R e l a x a t i o n o f zoning  r e g u l a t i o n s would have to be implemented through development variance permits or the Board o f Variance system.  Only "minor  123 v a r i a n c e s " would be a v a i l a b l e under these two systems 6. Enforcement P e n a l t i e s f o r o f f e n c e s under the Heritage C o n s e r v a t i o n Act are c l e a r l y inadequate and are a major reason f o r the statutels ineffectiveness. S e c t i o n 29 o f the A c t makes i t an offence to contravene the A c t .  S e c t i o n 4 o f the Offence  124Act  s p e c i f i e s t h a t the p e n a l t y f o r an o f f e n c e i s a f i n e up  to two thousand d o l l a r s o r imprisonment f o r a maximum o f s i x months o r both.  Two thousand d o l l a r s i s c l e a r l y  an inadequate  penalty when d e a l i n g with p r o p e r t i e s worth m i l l i o n s of d o l l a r s . An offence under the C i t y of Vancouver's H e r i t a g e By-Law i s even l e s s onerous.  The o f f e n d e r i s only l i a b l e f o r a f i n e  of not more than f i v e hundred d o l l a r s and not l e s s than f o u r  125 hundred d o l l a r s  .  With such inadequate p e n a l t i e s , a l a n d -  owner may simply demolish a s t r u c t u r e on h i s property to keep the property f r e e f o r f u t u r e development knowing he w i l l be l i a b l e f o r a f i n e o f a few hundred d o l l a r s .  only  Recently, a  h i s t o r i c s c h o o l house i n the m u n i c i p a l i t y o f Langley was demolished to make way f o r a new s u b d i v i s i o n .  The b u i l d i n g  had not y e t been d e s i g n a t e d under the H e r i t a g e C o n s e r v a t i o n Act but because the d e m o l i t i o n was without a permit, the developer may be l i a b l e f o r a maximum f i n e o f one thousand dollars  126  .  Had the b u i l d i n g been designated, the maximum  37  f i n e would have not been much more p r o v i d i n g l i t t l e  deterrent  to developers o f v a l u a b l e p r o p e r t y . Other Canadian h e r i t a g e s t a t u t e s provide much more onerous 127 penalties.  The A l b e r t a H i s t o r i c a l Resources Act  f o r a penalty o f up to f i f t y one y e a r .  provides  thousand d o l l a r s and p r i s o n f o r  The Ontario a c t p r o v i d e s an i d e n t i c a l penalty f o r  corporate o f f e n d e r s but i n d i v i d u a l s are only l i a b l e f o r a 128 maximum f i n e o f t e n thousand d o l l a r s  .  Saskatchewan has  the s t i f f e s t penalty and perhaps the only one t h a t t r u l y d e t e r s developers from i l l e g a l d e m o l i t i o n .  C o r p o r a t i o n s are 129 l i a b l e f o r a maximum penalty o f 250,000 d o l l a r s . Individuals can be f i n e d up to f i v e thousand d o l l a r s and imprisoned f o r 130 131 s i x months . Only the s t a t u t e s o f P r i n c e Edward I s l a n d , 132 Newfoundland , and Manitoba's badly outdated H i s t o r i c S i t e s and Objects Act which s p e c i f i e s a maximum f i n e o f one hundred 1 35 ,  dollars  , provide p e n a l t i e s l e s s than the Heritage  Conser-  vation Act. A more u s e f u l :.and onerous penalty i s the c i v i l remedy ;  contained i n s e c t i o n 28 o f the HCA. designated property i l l e g a l l y ,  When a person  alters  c o u n c i l or the p r o v i n c i a l  m i n i s t e r may order t h a t person to r e s t o r e property to i t s c o n d i t i o n p r i o r to the a l t e r a t i o n .  I f the person does not  comply with the order, c o u n c i l i t s e l f may r e s t o r e the property and the o f f e n d e r w i l l be l i a b l e f o r a l l reasonable c o s t s o f 134. 135 the r e s t o r a t i o n . O n t a r i o ^ and Saskatchewan ^ empower m u n i c i p a l i t i e s to sue f o r damages o f a l l r e s t o r a t i o n c o s t s i n c u r r e d because o f an i l l e g a l a l t e r a t i o n .  A similar section  38  i n A l b e r t a a p p l i e s t o only p r o v i n c i a l l y designated  struc-  136 tures ' .  T h i s remedy i s only  o f a s s i s t a n c e where the offence  was the a l t e r a t i o n o f a designated lition.  s t r u c t u r e , not i t s demo*  Presumably, once a b u i l d i n g i s demolished, i t i s  gone f o r e v e r . The r i g h t to i n s p e c t a designated h e r i t a g e property restrictions.  heritage  or p o t e n t i a l  i s necessary f o r the enforcement o f h e r i t a g e  The HCA g i v e s the p r o v i n c i a l government the  power to i n v e s t i g a t e and survey p o t e n t i a l h e r i t a g e  s i t e s or  designated likely  s i t e s t h a t are i n the o p i n i o n o f the m i n i s t e r 137 to be a l t e r e d , damaged or become d i l a p i d a t e d . 138  Municipal  c o u n c i l s have the power under the M u n i c i p a l Act  to authorize  i n s p e c t i o n s o f p r o p e r t i e s to determine i f i t s  by-laws are being f o l l o w e d .  The C i t y o f Vancouver  derives  i t s b u i l d i n g i n s p e c t i o n powers from s. 306(h) o f the Vancouver 139 Charter  J J  .  Members o f the p u b l i c have no standing p r o v i n c i a l government  t o designate  a site.  p r o v i n c i a l Environment M i n i s t e r was advised  to f o r c e the In 1981, the by h i s advisory  committee that the main b u i l d i n g of the C.P.R. Roundhouse i n Vancouver should  be designated.  Before the m i n i s t e r made a  d e c i s i o n on d e s i g n a t i o n ,  the b u i l d i n g ' s owners began demo-  l i s h i n g the Roundhouse's  ancillary  buildings.  A group o f  p r i v a t e i n d i v i d u a l s sued f o r an i n j u n c t i o n to r e s t r a i n any f u r t h e r d e m o l i t i o n u n t i l the m i n i s t e r decided not t o designate.  whether o f  In F r i e n d s o f the Roundhouse S o c i e t y v.  B.C. Place L t d . ^ , Mr. J u s t i c e Hinds h e l d that the group 1  0  39  had  no  standing.  Merely  the  m i n i s t e r t o f o r m an  the  r i g h t to preserve those b u i l d i n g s . T h e r e w o u l d be  n a t i o n powers.  because a group o f c i t i z e n s opinion  on  the  site  the  give i t  a s i m i l a r r e s u l t with municipal  I t i s only  by-law  .  4  desig-  once a b y - l a w i s a c t u a l l y p a s s e d  t h a t a t a x p a y e r o r i n t e r e s t e d g r o u p s may challenge  d i d not  requested  This  w o u l d be  have s t a n d i n g  to  helpful i f council  ever attempts to de-designate a s t r u c t u r e . F. R a i l w a y  Properties  A problem p e c u l i a r to Canadian h e r i t a g e the  e x c l u s i o n of a l l railway  p r o t e c t i v e measures. nation's  heritage,  an  important part of  our  e s p e c i a l l y i n W e s t e r n C a n a d a where t h e  the  s t a t i o n was  frequently  l e a d i n g instrument of settlement.  i n C a n a d i a n t o w n s and  t h e most p r o m i n e n t and c i t i e s during  I n many c o m m u n i t i e s , t h e  most i m p o r t a n t h e r i t a g e p r o t e c t i o n by  is  p r o p e r t i e s from the p r o v i n c i a l  R a i l w a y s are  r a i l w a y was  century.  legislation  the  busiest  f i r s t h a l f of  railway  station i s  structure remaining  .  4  the m u n i c i p a l i t y i s i m p o s s i b l e .  problems exclude r a i l w a y  The  p r o p e r t i e s f r o m any  Yet  r  railway structure this the  its  Constitutional heritage  protection  legislation. Under the  C o n s t i t u t i o n Act,  f r o m p r o v i n c i a l j u r i s d i c t i o n and federal property  jurisdiction.  The  n e c e s s a r y f o r the  provincial heritage  1867,  railways  are  excluded  t h u s s. 9 1 ( 2 9 ) makes them  a  j u r i s d i c t i o n extends over a l l operation  l a w s h a v e no  of the  railway.  e f f e c t on r a i l w a y  Thus  stations.  40 T h i s i s so even where the s t a t i o n i s no l o n g e r i n use. l a c k o f p r o t e c t i o n has l e d to the d e s t r u c t i o n c o f railway  stations of heritage  value.  Since  The  many Canadian  1969, s e v e n t y - f i v e  s t a t i o n s have been demolished d e s p i t e p r o v i n c i a l d e s i g n a t i o n s and  strong o b j e c t i o n s from m u n i c i p a l i t i e s ^ .  The c o n f l i c t  has reached the c o u r t s i n a few cases. Canadian P a c i f i c v. Saskatchewan Heritage  Property  Review  14-4Board e t a l . ^  made i t c l e a r t h a t m u n i c i p a l i t i e s are power-  l e s s to p r o t e c t h e r i t a g e r a i l w a y  stations.  The p l a i n t i f f ,  Canadian P a c i f i c Railways, planned to remove i t s s t a t i o n a t Kerrobert,  Saskatchewan and demolish i t . The l a n d would then  be used by the company f o r r a i l w a y  storage.  The K e r r o b e r t  c o u n c i l attempted to block the move by p a s s i n g a by-law d e s i g n a t i n g the s t a t i o n as a m u n i c i p a l  heritage property.  The  h e r i t a g e value o f the s t r u c t u r e was not i n doubt because the s t a t i o n had e x i s t e d f o r seventy-one y e a r s . would normally  have prevented the s t a t i o n ' s removal without  council's approval.  C o u n c i l made i t c l e a r t h a t when asked  i t would not give i t s a p p r o v a l . the court seeking  Canadian P a c i f i c a p p l i e d to  a d e c l a r a t i o n t h a t the m u n i c i p a l i t y d i d not  have the power to designate Mr.  The d e s i g n a t i o n  the s t a t i o n as h e r i t a g e  J u s t i c e Matheson f i r s t  property.  examined the r a i l w a y power "141  of the f e d e r a l P a r l i a m e n t . the power was widely  Using  the Railway Act d e f i n i t i o n  d e f i n e d as being over a l l s t a t i o n s ,  p r o p e r t i e s and works connected with the r a i l w a y .  But to c o n ^ i  t i n u e under t h a t f e d e r a l j u r i s d i c t i o n , the property  had to  remain an e s s e n t i a l p a r t o f the t r a n s p o r t a t i o n system.  Hotels  41  and q u a r r i e s owned by r a i l w a y s have been h e l d not to be e s s e n t i a l to the system and thus had no immunity from p r o 14-6  v i n c i a l and m u n i c i p a l  laws  .  In the present  case, the  s t a t i o n had been c l o s e d and out o f o p e r a t i o n f o r at l e a s t a year so t h a t i t c o u l d not be c l a s s i f i e d as e s s e n t i a l to the system.  However, Canadian P a c i f i c claimed the b u i l d i n g had  to be removed to make room f o r o p e r a t i n g equipment, to provide p a r k i n g space f o r Canadian P a c i f i c and p r i v a t e v e h i c l e s . Even though the m u n i c i p a l i t y argued t h a t other property e a s i l y have been used f o r these purposes, the Court t h a t the property  could  found  was not j u s t a convenience to the r a i l w a y  company but an e s s e n t i a l p a r t o f the t r a n s p o r t a t i o n o p e r a t i o n . The  Court f u r t h e r found i t c o u l d not i n t e r f e r e with the r a i l -  way's bonafide  d e c i s i o n t h a t property  was r e q u i r e d to maintain  147 i t s operations  .  Therefore,  because the property  was a  f e d e r a l j u r i s d i c t i o n , the m u n i c i p a l i t y had no power to d e s i g nate and p r o t e c t i t under p r o v i n c i a l  legislation.  Canadian P a c i f i c ' s most infamous c o n f l i c t with h e r i t a g e l e g i s l a t i o n occurred  provincial  i n the C i t y o f Toronto when i t  demolished the suburban West Toronto S t a t i o n .  The s t a t i o n  c l e a r l y was worthy o f p r o t e c t i o n as a h e r i t a g e s i t e .  The  company proceeded with d e m o l i t i o n without  demo-  a municipal  l i t i o n order and i n d e f i a n c e o f a stop work order  issued  under the Ontario B u i l d i n g Code.  prosecuted  The company was  by the c i t y f o r the i l l e g a l d e m o l i t i o n . not g u i l t y  i n P r o v i n c i a l Court  The company was found  because the s t a t i o n s a t on l a n d 14-i  owned by the r a i l w a y and was thus under f e d e r a l j u r i s d i c t i o n  42  The  s t a t i o n had been boarded up and vacant f o r over three  years so that an argument was c l e a r l y a v a i l a b l e  indicating  that the s t a t i o n was no l o n g e r immune from p r o v i n c i a l lation.  legis-  U n f o r t u n a t e l y , I have not been able to d i s c o v e r  whether or not the argument was a c t u a l l y made. I t was t h e r e f o r e l e f t up to f e d e r a l law to punish  Canadian  149  Pacific.  Under the f e d e r a l Railway A c t  , any proposed  d e v i a t i o n , change o r a l t e r a t i o n i n the r a i l w a y must be submitted to the Canadian  T r a n s p o r t Commission (CTC) f o r a p p r o v a l .  Since  the d e f i n i t i o n o f r a i l w a y i n c l u d e s s t a t i o n s , such approval would have been necessary f o r demolishing and removing one of the system's s t a t i o n s .  Canadian P a c i f i c d i d not o b t a i n  CTC approval before demolishing the West Toronto The CTC h e l d a p u b l i c i n q u i r y a t which Canadian argued that the Railway  Station. Pacific  A c t no l o n g e r a p p l i e d to the b u i l d i n g  because i t had not been a " s t a t i o n " f o r three y e a r s . c a l l y , t h i s i s the counter-argument to what was l i k e l y p o s i t i o n i n arguing immunity from p r o v i n c i a l because o f i t s s t a t u s as a r a i l w a y .  Ironitheir  legislation  The CTC r e j e c t e d the  argument and recommended that the A t t o r n e y - G e n e r a l o f Canada i n s t i t u t e proceedings a g a i n s t Canadian P a c i f i c f o r the i l l e g a l d e m o l i t i o n o f the s t a t i o n .  Canadian  P a c i f i c c h a l l e n g e d the  r i g h t o f the CTC to make such a recommendation but the F e d e r a l Court o f Appeal upheld the commission's r i g h t appeal was denied by the Supreme Court  151  152  .  150  .  leave to  C r i m i n a l proceedings  by,the f e d e r a l Crown are now pending . T h i s s e c t i o n o f the Railway Act i s the only p r o t e c t i o n  43  t h a t h e r i t a g e r a i l w a y s t a t i o n s have.  It i s clearly  inadequate  p r o t e c t i o n i n t h a t i t s purpose i s to r e g u l a t e the workings of the r a i l w a y system and not to p r o t e c t worthy b u i l d i n g s . The  Commission i s not equipped to judge the  architectural  m e r i t s and h e r i t a g e value of a r a i l w a y s t a t i o n to a community. Thus, i t i s l i k e l y without  t h a t approval  to demolish would be  c o n s i d e r a t i o n of the b u i l d i n g ' s h e r i t a g e  The  f e d e r a l government has  given  value.  v i r t u a l l y no powers to  t e c t s i g n i f i c a n t b u i l d i n g s under i t s j u r i s d i c t i o n .  pro-  The f e d e r a l 153  h e r i t a g e l e g i s l a t i o n i s the H i s t o r i c S i t e s and The  only means of p r o t e c t i o n the Act p r o v i d e s  to purchase h i s t o r i c p l a c e s and  preserve  Monuments Act i s the power  them as museums.  f e d e r a l government does not have the funds to purchase r a i l w a y s t a t i o n worthy of p r e s e r v a t i o n . a museum i s an unproductive  every  Furthermore, use  and unnecessary c o n d i t i o n .  b u i l d i n g s are more v a l u a b l e to the p u b l i c when they h a b i l i t a t e d i n t o a c t i v e commercial c e n t r e s . property  as  Heritage  are r e -  Maintaining  i n p r i v a t e hands y e t p r o t e c t i n g i t by  would be p r e f e r a b l e to the present  The  the  designation  f e d e r a l system.  There are cogent p o l i c y reasons f o r e n a c t i n g p r o t e c t i v e l e g i s l a t i o n t h a t would p l a c e a burden on r a i l w a y to preserve  i t s s t a t i o n s f o r the p u b l i c b e n e f i t .  American case, Penn C e n t r a l T r a n s p o r t a t i o n Co.  companies The  v. The  leading City  of  154.  New  York ^ J  d e a l t with the burden of landmark d e s i g n a t i o n  a railway terminal b u i l d i n g . Mr.  In the New  York Court  on  of Appeal,  J u s t i c e B r e i t e l i n d i c a t e d t h a t r a i l r o a d s , because of  government s u b s i d i e s , should have a duty to the p u b l i c to  44  a l l o w p r e s e r v a t i o n of t h e i r b u i l d i n g s .  Without government  granted  monopolies, s u b s i d i e s , and  railway  company would never have been i n a p o s i t i o n to  the land and  b u i l d the s t a t i o n .  hood from s o c i e t y and  e x p r o p r i a t i o n powers, the  I t has r e c e i v e d i t s l i v e l i -  t h e r e f o r e the p u b l i c has  have t h a t s t a t i o n preserved  own  for i t s benefit.  a right  to  Railway companies  l i k e Canadian P a c i f i c thus have a duty to preserve  their  s t a t i o n s and  imposition  t h e r e f o r e , an a p p r o p r i a t e ,  of that duty should  be  legislated  enacted.  Several l e g i s l a t i v e proposals  have been made but never 154-A  adopted. in  A p e r s i s t e n t P r i v a t e Members B i l l  i t s d e t a i l s but was  to designate  schematically  attractive.  was  inadequate  The  power  would have been g i v e n to the H i s t o r i c S i t e s  and  Monuments Board as c o n s t i t u t e d under the f e d e r a l a c t ^ ^ . 1  4  Presumably, t h i s board would have more e x p e r t i s e than the CTC  i n determining  the h e r i t a g e value  of r a i l w a y s t a t i o n s . -] t54.fi  To avoid the C o n s t i t u t i o n a l problems of i n t e r d e l e g a t i o n Parliament  ,  should give the power to t h i s f e d e r a l board i n s t e a d  of empowering e x i s t i n g p r o v i n c i a l bodies with powers to d e s i g nate r a i l w a y s t a t i o n s .  45  I I I . PROTECTION FOR  THE  P r o t e c t i o n of the  PROPERTY OWNER b u i l d i n g s and  s t r u c t u r e s of our  by d e s i g n a t i o n  has  thus f a r .  a n a l y s i s i n P a r t I I demonstrates that  The  been the focus of h e r i t a g e  legislation  r e s u l t s of t h i s g o a l have a t t a i n e d some success. the Heritage  Conservation  Act***^  i f used, c o u l d  adequate p r o t e c t i o n f o r designated e f f e c t i v e , heritage  has  t a i n h i s property  For example, provide Butito  h i s property  The  owner no  as he wishes.  longer  He must main-  e x a c t l y as i t stands even i f that no  a p r o f i t a b l e use.  C l e a r l y the owner must be  from the consequences of the d e s i g n a t i o n  or the a r b i t r a r y  of the h e r i t a g e powers a g a i n s t h i s land but l i t t l e  and  e f f o r t have been put legislation.  e i t h e r procedural  longer protected  use  heritage  be  owner from the burden of  T h i s burden can be harsh.  the r i g h t to use  provides  structures.  the  l e g i s l a t i o n must balance t h i s p r o t e c t i o n  with p r o t e c t i o n f o r the property designation.  past  thought  into providing this protection in  The  p r o t e c t i o n t h a t has  f a i r n e s s or compensation.  been used i s  The  effectiveness  of these forms of p r o t e c t i o n , the proper means of t h e i r mentation and  t h e i r success i n a c h i e v i n g  imple-  a balance with the  p r o t e c t i v e measures f o r the b u i l d i n g w i l l be examined i n t h i s part. A. P r o c e d u r a l  Fairness  Most p r o v i n c i a l s t a t u t e s provide  p r o t e c t i o n to  owner with a s t a t u t o r y r i g h t to a p u b l i c hearing to appeal the d e s i g n a t i o n .  and  For example, i n A l b e r t a ,  the a right the  46  owner o f a p o t e n t i a l P r o v i n c i a l Heritage Resource i s g i v e n the r i g h t to o b j e c t to the pending  d e s i g n a t i o n and i s e n t i t l e d 155  to a h e a r i n g before the H i s t o r i c S i t e s Board ^ .  The Board  must provide a r e p o r t f o r the m i n i s t e r before he can determine i f the property should be designated.  There i s no s i m i l a r  s t a t u t o r y r i g h t o f o b j e c t i o n f o r the owner o f property d e s i g nated by a m u n i c i p a l i t y i n A l b e r t a . 156 Heritage Property A c t  p  In Saskatchewan, the  p r o v i d e s the p r e - d e s i g n a t i o n r i g h t  to o b j e c t and a p u b l i c h e a r i n g before a p r o v i n c i a l l y  appointed  watchdog committee f o r both p r o v i n c i a l and m u n i c i p a l d e s i g nations.  The A c t a l s o p r o v i d e s the r i g h t to appeal a d e s i g 157  n a t i n g by-law ' .  The owner, on appeal, i s allowed to apply  y e a r l y j t o the m u n i c i p a l c o u n c i l or the p r o v i n c i a l c a b i n e t f o r a new h e a r i n g . . In B r i t i s h Columbia, there i s no r i g h t to appeal nor any  :  s t a t u t o r y r i g h t to a p u b l i c h e a r i n g before d e s i g n a t i o n . S e c t i o n 11(2) o f the H e r i t a g e C o n s e r v a t i o n A c t s t a t e s an owner must be n o t i f i e d before d e s i g n a t i o n and be g i v e n  instructions  on how he may o b j e c t but t h i s does not c l e a r l y give a r i g h t 158 to a h e a r i n g .  Cases such as Christmas  v. C i t y of Edmonton  can be used as a u t h o r i t y f o r the p r o p o s i t i o n t h a t a m u n i c i p a l i t y can pass a by-law without address the i s s u e .  g i v i n g those a f f e c t e d a r i g h t to  However, the common law duty to a c t f a i r l y  and the r u l e s o f n a t u r a l j u s t i c e may impose, i n the absence o f l e g i s l a t i o n , a r i g h t to a public hearing.  According to  -ICQ  Makuch  , a m u n i c i p a l i t y i s under a common law duty  c e r t a i n procedures  when i t a c t s j u d i c i a l l y  to f o l l o w  and when r i g h t s  47  are a f f e c t e d .  The  duty r e q u i r e s the m u n i c i p a l i t y give  of i t s a c t i o n s and h o l d a h e a r i n g . when the power to be e x e r c i s e d The  T h i s duty i s not  notice  imposed  is legislative.  Supreme Court of Canada, i n Wiswell v.  Greater  160 Winnipeg  , h e l d t h i s duty to act f a i r l y  hold a p u b l i c h e a r i n g of l a n d .  The  before  rezoning  Court found r e z o n i n g  demanded c o u n c i l  an i n d i v i d u a l p a r c e l  was  a q u a s i - j u d i c i a l function  because i t i n v o l v e d a c o n f l i c t between p r i v a t e i n d i v i d u a l s . However, many r e z o n i n g not  s i t u a t i o n s or h e r i t a g e  designations  i n v o l v e a c o n f l i c t between p r i v a t e i n d i v i d u a l s but  between the p r i v a t e i n d i v i d u a l and  council.  instead  Thus, i t can  argued that these are l e g i s l a t i v e powers and to the r u l e s o f n a t u r a l j u s t i c e .  do  are not  be  subject  However, the Supreme Court  subsequently expanded the d e f i n i t i o n of q u a s i - j u d i c i a l power to being one  which i n v o l v e d an a d v e r s a r i a l s i t u a t i o n between  a p r i v a t e owner and a c t i n g as the  c o u n c i l because i n e f f e c t the c o u n c i l i s  judge o f i t s own  actions. In Homex Realty 161  Development L t d . v. V i l l a g e of Wyoming given n o t i c e or an o p p o r t u n i t y  , an owner was  to be heard before  and not  council  passed a by-law d e - r e g i s t e r i n g a s u b d i v i s i o n p l a n of h i s  land,  thus r e s t r i c t i n g h i s r i g h t s to convey the p r o p e r t y .  Justice  Estey  h e l d that wherever a s t a t u t e a u t h o r i z e s  with property give the  Mr.  an  interference  r i g h t s , the Court w i l l r e q u i r e the  municipality  s u b j e c t an o p p o r t u n i t y  Dickson (as he then was)  to be heard.  dissented  Mr.  Justice  i n the f i n a l r e s u l t but  agreed that the duty of f a i r n e s s a p p l i e d . r i g h t to f a i r n e s s d i d not depend on the  He  i n d i c a t e d the  c l a s s i f i c a t i o n of  the  48  power or the need f o r competing i n t e r e s t s . was  Furthermore, i t  i r r e l e v a n t t h a t the by-law might be i n the p u b l i c i n t e r e s t  because so l o n g as i t operated to the detriment i n d i v i d u a l , there was  of a p a r t i c u l a r  a r i g h t to a h e a r i n g .  C l e a r l y , h e r i t a g e d e s i g n a t i o n powers are analogous to the q u a s i - j u d i c i a l power i n Homex.  D e s i g n a t i o n i s an i n t e r f e r e n c e  with the property r i g h t s of the owner and can l e a d to an a d v e r s a r i a l c o n f l i c t between a r e l u c t a n t owner and an sympathetic  council.  un-  T h e r e f o r e , m u n i c i p a l i t i e s are o b l i g e d  to a f f o r d a h e a r i n g to an owner before d e s i g n a t i o n . Although not s t a t u t o r i l y  r e q u i r e d , the C i t y of Vancouver  always holds a p u b l i c meeting to c o n s i d e r the m e r i t s of d e s i g 162  n a t i n g a s t r u c t u r e before p a s s i n g a by-law the duty to act f a i r l y  .  This s a t i s f i e s  and g i v e s the owner the o p p o r t u n i t y to  present h i s circumstances  and p u b l i c i z e the p o t e n t i a l l y  e f f e c t s of d e s i g n a t i o n on h i s p r o p e r t y .  harmful  To i n s u r e t h a t h e a r i n g s  are h e l d i n a l l m u n i c i p a l i t i e s and the owner knows o f h i s r i g h t to a h e a r i n g , i t would be more e f f e c t i v e to make the  right  statutory. There i s no s t a t u t o r y r i g h t to appeal the d e s i g n a t i o n i n B r i t i s h Columbia.  The  d e s i g n a t i n g by-law would however be  c h a l l e n g e a b l e under the s e t t i n g aside p r o v i s i o n s of the Municipal A c t BV C  1 6  ^ and the J u d i c i a l Review Procedure  Current P r o t e c t i o n i n B r i t i s h The  II  Act  1 6 4  .  Columbia  i  second form of p r o t e c t i o n i s to compensate the owner  whose property has decreased  i n value due  to the  restrictions  49  p l a c e d on t h e p r o p e r t y the only  by t h e h e r i t a g e d e s i g n a t i o n .  statutory protection given  Columbia l e g i s l a t i o n .  This i s  t o t h e owner by t h e  British  Most p r o v i n c i a l h e r i t a g e s t a t u t e s d e a l  w i t h t h e p r o b l e m by m a k i n g  a c o m p e n s a t i o n award d i s c r e t i o n a r y  165 by t h e d e s i g n a t i n g body  .  The p r a c t i c a l e f f e c t o f s u c h a  p r o v i s i o n i s w i t h l i m i t e d funds a v a i l a b l e to m u n i c i p a l i t i e s and o t h e r g o v e r n i n g small.  any  c o m p e n s a t i o n award w i l l  However, B r i t i s h C o l u m b i a and A l b e r t a  s a t i o n mandatory value  bodies,  o f the  be  make compen-  where a h e r i t a g e d e s i g n a t i o n d i m i n i s h e s  the  property. 167  The H e r i t a g e s a t i o n mandatory  Conservation  Act  c l e a r l y makes compen-  where a p r o v i n c i a l h e r i t a g e s i t e  i s desig-  n a t e d by t h e c a b i n e t u n d e r s. 4 ( 1 ) . S e c t i o n 4 ( 2 ) s t a t e s : Where d e s i g n a t i o n u n d e r s u b s e c t i o n ( 1 ) ( a ) d e c r e a s e s t h e e c o n o m i c v a l u e o f l a n d , t h e m i n i s t e r s h a l l pay t o t h e owner o f t h e l a n d an amount t o be d e t e r m i n e d by order of the L i e u t e n a n t - G o v e r n o r i n C o u n c i l (emphasis added). The  legislative  or i m p a r t i a l i t y Subsection order  intent i s less clear i n providing guidelines i n s e t t i n g t h e amount o f t h a t  compensation.  ( 3 ) deems t h e amount d e t e r m i n e d by t h e  t o be s u f f i c i e n t  c o m p e n s a t i o n f o r any l o s s .  cabinet's T h e r e ••i.  a p p e a r s t o be no a p p e a l f o r an owner u n s a t i s f i e d w i t h t h e amount given. dom  Therefore,  the p a r t y w i t h the l i a b i l i t y  t o s e t t h e amount o f i t s l i a b i l i t y .  determination  c o u l d c r e a t e an i n e q u i t y .  This  has t o t a l f r e e unilateral  A more e q u i t a b l e  m e t h o d t o s e t t i n g t h e amount o f c o m p e n s a t i o n p a y a b l e w o u l d 168 to  f o l l o w the p r o v i s i o n s of the E x p r o p r i a t i o n Act  that Act, a property  .  be  Under  owner d i s p u t i n g t h e amount o f f e r e d as  50  compensation may  have h i s d i s p u t e s e t t l e d by e i t h e r a r b i 16  Q  t r a t i o n or by a j u r y ' s v e r d i c t The  liability  f o r compensation i s l e s s c l e a r when a  m u n i c i p a l i t y designates the Heritage "may"  provide  a h e r i t a g e s i t e . * S e c t i o n 11(4)  Conservation  Act provides  that a municipal c o u n c i l  compensation to an owner where d e s i g n a t i o n r e -  duces the property  value of the l a n d .  The  compensation  be by grant, l o a n , tax r e l i e f or some other form. 11(5) to  of  deems the compensation g i v e n , i f any,  be f u l l r e s t i t u t i o n f o r any  loss.  i n s t e a d of " s h a l l " , as used i n s. 4 ( 2 ) ,  The  may  Section  by the m u n i c i p a l i t y  use  of the word  i m p l i e s the  "may"  compen-  sation i s discretionary. Although the h e r i t a g e l e g i s l a t i o n appears not to make compensation mandatory, l i a b i l i t y  probably  i s c r e a t e d when the  d e s i g n a t i o n i n j u r i o u s l y a f f e c t s the p r o p e r t y . Section 544(1) 170 of the M u n i c i p a l Act states: The c o u n c i l s h a l l make to owners, o c c u p i e r s or other persons i n t e r e s t e d i n r e a l property . . . i n j u r i o u s l y a f f e c t e d by the e x e r c i s e of any of i t s powers, due cog compensation f o r any damages . . . n e c e s s a r i l y r e s u l t i n g from the e x e r c i s e o f those powers beyond any advantage which the claimant may d e r i v e from the contemplated work. Where the c l a i m f o r compensation i s not agreed upon, i t w i l l 171 be determined by a r b i t r a t i o n  .  Presumably, d e s i g n a t i o n of  a m u n i c i p a l h e r i t a g e s i t e would be an e x e r c i s e of one m u n i c i p a l i t y ' s powers thus c r e a t i n g the l i a b i l i t y decrease i n the property  of the  f o r any  value.  T r a d i t i o n a l l y , i n j u r i o u s a f f e c t i o n has  been l i n k e d with  damage to l a n d caused by a damaging p u b l i c work on or expro-  51  p r i a t i o n o f the a d j o i n i n g p r o p e r t y . ago,  Over one  hundred years  the House of Lords gave examples i n c l u d i n g l o o s e n i n g  the foundation,  obstructing  of  l i g h t s or d r a i n s or making the  172 land i n a c c e s s i b l e  .  However, i t now  appears t h a t mere  government r e g u l a t i o n without p h y s i c a l i n t e r f e r e n c e injurious affection.  For example, i n the  i s an  1950's, the  Aero-  17*5 n a u t i c s Act  specifically  i n c l u d e d damage caused by  zoning  r e g u l a t i o n s made under the Act as compensable i n j u r i o u s a f f e c t i o n to a f f e c t e d p r o p e r t y . i n Tener v. The  In B r i t i s h Columbia, the Court of Appeal  Queen i n Right of B r i t i s h  Columbia found 1  the d e n i a l of a permit f o r e x p l o i t i n g an e s t a b l i s h e d c l a i m which diminished  the  value of the property  mineral  interest  c o n s t i t u t e d an i n j u r i o u s a f f e c t i o n f o r which compensation payable.  The  d e c i s i o n was  was  subsequently appealed to the Supreme  Court of Canada where the Court came to a s i m i l a r r e s u l t but 175 with d i f f e r e n t r e a s o n i n g . 176 Municipal "beyond any  Act  advantage which the claimant  contemplated work." taking i s necessary. the  subsection  liability  p r o v i d e s t h a t damages are  may  The  word "work" may  Yet,  may  derive  available from  the  imply a p h y s i c a l under-  the word "work" i s f a r removed i n  from the phrase imposing l i a b i l i t y e x i s t without a "work".  so  that  Furthermore, one  commen-  177 tator  suggested t h a t s. 544(1) a p p l i e s to a l l a c t s of  municipality.  Only an express p r o v i s i o n w i l l remove the  s a t i o n requirement as i n s. 972.  That s e c t i o n e x p r e s s l y  compensation f o r a zoning change  unless  zoned e x c l u s i v e l y f o r p u b l i c use.  the property  the compendenies  is  Zoning f o r p u b l i c use  is  52  merely r e g u l a t o r y  and  r e q u i r e s no p h y s i c a l "work" yet  c o n s t i t u t e an i n j u r i o u s a f f e c t i o n . of the Heritage  Conservation  Furthermore, s e c t i o n  Act deems property  or i n j u r i o u s l y a f f e c t e d when a temporary delay ordered while c o u n c i l c o n s i d e r s  can  the h e r i t a g e  not  H(2)  to be  taken  o f work has  been  s i g n i f i c a n c e of  the  178 property use  .  T h i s i m p l i e s t h a t a permanent r e s t r i c t i o n to  of the property  through d e s i g n a t i o n  the  by the m u n i c i p a l i t y  make i t l i a b l e f o r compensation when the property  value  decreased by the a c t i o n .  officials  In Vancouver, m u n i c i p a l  will  is  t r e a t the d e s i g n a t i o n bility C.  p r o v i s i o n s as imposing a mandatory l i a 179 f o r compensation on the c i t y .  Compensation There i s c o n s i d e r a b l e  s a t i o n and  debate as to the n e c e s s i t y  i t s e f f e c t i v e n e s s i n p r o t e c t i n g the  landowner.  A u t h o r i t i e s have suggested s e v e r a l reasons f o r and the use  of compen-  against  of compensation i n p r o t e c t i n g h e r i t a g e property  owners.  T h i s s e c t i o n w i l l survey those reasons. 1. Reasons f o r Compensation a) The  P r i v a t e Owner Pays f o r the P u b l i c B e n e f i t  The  most common and  obvious argument r a i s e d i n favour  compensation i s based on the p r i n c i p l e of the user pays. i s , the party which b e n e f i t s from a governmental act pay  f o r those b e n e f i t s .  The  purpose of h e r i t a g e  i s to preserve s t r u c t u r e s f o r the enjoyment and the p u b l i c .  of That  should  designation education  I t i s the p u b l i c which b e n e f i t s from  of  preservation  53  yet the burden o f p r o v i d i n g t h a t b e n e f i t i s p l a c e d f i r m l y upon 180 the p r o p r i e t o r i n s t e a d o f on the p u b l i c .  According  to Denhez  ,  the p u b l i c as user o f the h e r i t a g e values o f the s t r u c t u r e has a r e s p o n s i b i l i t y to pay f o r i t . C l e a r l y , the burden on the p r o p r i e t o r upon d e s i g n a t i o n 181 can be g r e a t .  Costonis  listed  the owner l o s e s the o p p o r t u n i t y  s e v e r a l burdens.  to redevelop  Firstly,  the s i t e to a  more p r o f i t a b l e use. He l o s e s any added value the l a n d may have i f i t could be assembled with surrounding  properties.  Secondly, the owner c o u l d l o s e income i f he i s unable to provide the same q u a l i t y o f i n t e r i o r space as provided landowners who may i n c r e a s e the e f f i c i e n c y  of their structures  through r e l a t i v e l y u n r e s t r i c t e d r e n o v a t i o n s . b u i l d i n g i s l i s t e d as a h e r i t a g e p r o p e r t y , have d i f f i c u l t y  by competing  Thirdly, i f a  the owner could  i n o b t a i n i n g f i n a n c i n g because o f the r e s t r i c t i o n s  p l a c e d on the p r o p e r t y . many circumstances  A l e n d e r may decide  beyond h i s c o n t r o l .  t h a t there are too  And f o u r t h l y , the owner  may d i s c o v e r t h a t the r e s t r i c t i o n s make i t impossible the b u i l d i n g a t a p r o f i t as i t continues monetary terms, the burden can be g r e a t .  to age.  In a c t u a l  Tudor Manor, a s m a l l  apartment block i n Vancouver's West End, was r e c e n t l y for designation.  I t s owner estimated  to operate  considered  t h a t i t would cost a t  l e a s t three m i l l i o n d o l l a r s to renovate the s t r u c t u r e i n order to preserve  i t s h e r i t a g e value and to provide  a potentially  18? p r o f i t a b l e use  .  With the p u b l i c p r o v i d i n g compensation,  much o f t h i s burden c o u l d be a l l e v i a t e d .  54  b) D e s i g n a t i o n  i s Discriminatory  A s e c o n d argument i s t h a t d e s i g n a t i o n l e a d s t o a d i s c r i m i n a -  183 tory  loss.  According  t o Denhez  , the d e s i g n a t i o n s i n g l e s out  c e r t a i n p r o p e r t i e s and d e p r i v e s ment p o t e n t i a l w h i l e a loss  for  h i s neighbours  i n t e r f e r e s with  demands  t h e owner o f p a r t o f t h e a r e n o t so d e p r i v e d .  the p r i v a t e property  compensation.  This i s especially  rights  and  restricted  heritage structure holds.  the U n i t e d  S t a t e s Supreme C o u r t  Mr. J u s t i c e  labelled  Such  thus  t r u e where t h e z o n i n g  t h e a r e a p r o v i d e s much g r e a t e r d e v e l o p m e n t t h a n  as d i s c r i m i n a t o r y b e c a u s e  develop-  what t h e  Renquist  of  landmark d e s i g n a t i o n  i t p e n a l i z e d an owner f o r d o i n g t o o  184good a j o b o f d e s i g n i n g h i s b u i l d i n g  .  T h i s argument i s n o t p e r s u a s i v e be  l i k e n e d to d i s c r i m i n a t o r y zoning  available. over  A principle  a large area.  parcel This  o f zoning  where c o m p e n s a t i o n  differently  spot-zoning.  i s not  law i s t h a t i t i s t o apply  But f r e q u e n t l y , a p a r t i c u l a r  of land i s rezoned  i s called  because d e s i g n a t i o n can  from  its  The Supreme C o u r t  individual neighbours.  o f Canada h e l d  185 i n Town o f S c a r b o r o u g h v . B o n d i discriminatory  i s a perfectly  municipality.  B u t B o n d i may  designation it  merely  dards the  situation  valid  be d i s t i n g u i s h a b l e f r o m  i n t h a t the spot  of a neighbourhood.  property  much d i f f e r e n t  zoning,  Designation from  zoning  a heritage  was a l l o w e d  to the general  provides  the g e n e r a l  so t h a t c o m p e n s a t i o n may  because stan-  a standard f o r  standards  T h i s makes i t s d i s c r i m i n a t o r y e f f e c t  t h a t o f zoning  although  e x e r c i s e o f power by a  c o r r e c t e d an anomoly t o c o n f o r m  neighbourhood. than  t h a t spot  o f the  greater  be i n o r d e r .  55  In the Penn C e n t r a l Railway case  , Mr. J u s t i c e Brennan,  w r i t i n g f o r the m a j o r i t y , i n d i c a t e d t h a t h i s t o r i c  landmark  d e s i g n a t i o n could not be d i s c r i m i n a t o r y so long as i t i s p a r t of a comprehensive p l a n . t h a t although  The problem with t h i s statement i s  some c i t i e s have s t u d i e d or i n v e n t o r i e d h e r i t a g e 187  p r o p e r t i e s to form a comprehensive p l a n  , most  designations  are the r e s u l t o f a worthy s t r u c t u r e being threatened  with  demolition.  before  Little  s t u d y i n g or p l a n n i n g has occurred  t h i s t h r e a t i s made known to the d e s i g n a t i n g body.  In such  cases, d e s i g n a t i o n has a d i s c r i m i n a t o r y e f f e c t . c) Maintenance The p r e s e r v a t i o n of a b u i l d i n g w i l l i n v o l v e on-going c o s t s and p o s i t i v e a c t i o n from the owner w e l l a f t e r  designation  because the maintenance o f an o l d e r b u i l d i n g w i l l be more time-consuming and more expensive. a l t e r a t i o n s may  M u n i c i p a l approval  of any  a l s o be time-consuming and thus persuade an  owner to forego needed r e p a i r s i n order to a v o i d the bureauc r a t i c measures. neglected  The maintenance of landmarks i s f r e q u e n t l y  so t h a t the b u i l d i n g becomes so run-down t h a t i t i s  demolished by n e g l e c t .  Should a f f i r m a t i v e maintenance  standards  188 be imposed  , f u r t h e r expenses would be added to the l a n d -  owner's burden.  Compensation  would a l l e v i a t e t h a t burden and  perhaps encourage the r e h a b i l i t a t i o n and s e l f - s u f f i c i e n c y of the s t r u c t u r e . 189 A s i m i l a r argument that the p o s s i b i l i t y  f o r compensation given by Denhez  o f compensation may  J  is  i n f l u e n c e the owners  56  of undesignated, p o t e n t i a l h e r i t a g e s t r u c t u r e s to remain s t a n d i n g . e f f e c t s of d e s i g n a t i o n has  p r o p e r t i e s to allow  At present,  their  the f e a r of  the  l e d many owners to demolish t h e i r  b u i l d i n g s to keep the p r o p e r t i e s f r e e f o r f u t u r e development. Such c o n d i t i o n s l e d the C i t y of V i c t o r i a to use  emergency  powers to p r o t e c t b u i l d i n g s pending i n v e s t i g a t i o n and  the  190  passing  of new  the p r o s p e c t i v e  legislation ^ . loss likely  Denhez s t a t e s that the  to be s u s t a i n e d  the f a s t e r the r a t e of d e m o l i t i o n . l o s s e s would d i m i n i s h and  the  with  greater  designation,  With compensation,  the  i n c e n t i v e to demolish would be  limited. d)  Quasi-Expropriation An argument can be made t h a t property  a bundle of r i g h t s and  when one  ownership  of those r i g h t s i s taken away  by a governmental a u t h o r i t y , i t i s an e x p r o p r i a t i o n demands compensation.  involves  Using the d e f i n i t i o n o f i a  that  leading  191  American a u t h o r i t y  , a legal t i t l e  u n i t a r y or a " m o n o l i t h i c  r i g h t " but  i n d i v i d u a l r i g h t s each one f e r r e d to someone e l s e .  to r e a l e s t a t e  i s r a t h e r a bundle of  of which may  be separated  ownership.  According  and  In lands w i t h uses other t h a t  c u l t u r e or mining, the r i g h t to develop the lands becomes the most v a l u a b l e  i s not  trans-  agri-  frequently  component among the many r i g h t s of  to one  commentator, "the  essence of 192  property  i s i t s p o t e n t i a l f o r p r o f i t a b l e use."  designation  removes t h a t p o t e n t i a l .  owner to preserve h i s b u i l d i n g and  The  designation  Heritage forces  thusbremoves h i s r i g h t to  an  57  develop  the property  i n any  other way.  Therefore, a very  valuable i n t e r e s t i n t h a t property has been taken by government . 193 According  to La Ferme F i l i b e r L t e e . v. The  Queen  J J  ,  an  e x p r o p r i a t i o n n e c e s s a r i l y r e q u i r e s the t r a n s f e r of property or r i g h t s from one  party to the o t h e r .  must acquire something belonging  Crown t h e r e f o r e  to the p r i v a t e owner.  d e s i g n a t i o n meets t h i s requirement r e c e i v e s a s e r v i t u d e much l i k e  The  Heritage  because, i n e f f e c t , the Crown  a c o n s e r v a t i o n easement.  U n i t e d S t a t e s , a t a k i n g of property  occurs "when inroads  In the are  made upon an owner's use of the property  to an extent t h a t , as 194 between p r i v a t e p a r t i e s , a s e r v i t u d e has been a c q u i r e d . " 195  Canada, u n l i k e the U n i t e d S t a t e s p r o t e c t i o n o f property r i g h t s . may  still  , has no  constitutional  Yet t h i s American  definition  be r e l e v a n t because Canadian law presumes a r i g h t to  compensation where an i n t e r e s t  i s expropriated.  A s t a t u t e must  very e x p r e s s l y provide no compensation i s a v a i l a b l e i n such 196 circumstances  .  T h e r e f o r e , when development r i g h t s  are  removed by governmental a c t i o n , an i n r o a d i s made on the of the property Although  use  as i f the a u t h o r i t i e s had a c q u i r e d a s e r v i t u d e .  zoning p r o v i s i o n s f r e q u e n t l y e x p r e s s l y preclude  compen-  197 sation tency  ., d e s i g n a t i o n s t a t u t e s r a r e l y do.  Therefore, consist-  i n our law demands a r i g h t to compensation be presumed  when t h i s i n t e r e s t i s taken.  58  2. Reasons A g a i n s t Compensation a) D e s i g n a t i o n Should Not Be Treated D i f f e r e n t l y from Other Governmental R e g u l a t i o n s A strong argument r a i s e d a g a i n s t awarding compensation i s t h a t h e r i t a g e r e g u l a t i o n should not be t r e a t e d any d i f f e r e n t l y from other r e g u l a t i o n by government. of  The d e t r i m e n t a l e f f e c t  other s t a t u t e s and r e g u l a t i o n s does not c r e a t e a l i a b i l i t y 198  for  compensation.  Denhez  uses the example o f government  a c t i o n f o r c i n g a change i n the value o f the Canadian d o l l a r . The government c o u l d never a f f o r d to compensate a l l l o s e r s each time the d o l l a r ' s value One  decreased.  obvious way i n which the h e r i t a g e r e g u l a t i o n d i f f e r s  from most governmental r e g u l a t i o n i s t h a t i t deals with l a n d . Real property has always been given s p e c i a l s t a t u s i n the E n g l i s h common law system. The ownership and p o s s e s s i o n o f l a n d shaped E n g l i s h law with the development o f f e u d a l i s m . 199  Land's importance was d e r i v e d from i t s permanence vided a l l sustenance  .  I t pro-  and a s u i t a b l y f i r m base f o r the i n s t i -  t u t i o n s o f government and wealth.  Courts have c o n s i s t e n t l y  i n t e r p r e t e d r e g u l a t i o n o f l a n d so as to i n t e r f e r e as l i t t l e as p o s s i b l e with the owner's r i g h t t o enjoy h i s property and use it  as he wishes.  The Supreme Court of Canada i n d i c a t e d t h a t an  owner has a prima f a c i e r i g h t t o u t i l i z e h i s property i n whatever manner he deems f i t s u b j e c t only to the r i g h t s o f the surrounding  landowners *^. 2  But i n a more r e c e n t  case ^\ 2  Madame J u s t i c e Wilson i n d i c a t e d that the paramount c o n s i d e r a t i o n  59  g i v e n to p r i v a t e property r i g h t s has eroded  so t h a t when i n  c o n f l i c t with the p u b l i c i n t e r e s t , the p u b l i c i n t e r e s t prevail.  Yet, I submit  will  t h a t s u r e l y when the prima f a c i e  right  i s removed i n order to c a t e r to the p u b l i c i n t e r e s t , the  rights  taken away are v a l u a b l e and s p e c i a l enough c o n s i d e r i n g the historical  importance  compensated. treatment.  o f r e a l p r o p e r t y t h a t the owner should be  Real property r i g h t s continue to deserve T h e r e f o r e , an argument based  paramount  on the l a c k of compen-  s a t i o n f o r r e g u l a t i o n of n o n - r e a l property p o s s e s s i o n s should not be g i v e n much weight. A more a p p r o p r i a t e comparison would be to land use Zoning laws r e g u l a t e the type o f use an owner may l a n d j u s t as h e r i t a g e c o n s e r v a t i o n r e g u l a t i o n s do.  law.  make of h i s Compensation  i s almost never payable f o r a change i n zoning even where the 202 change i s d i s c r i m i n a t o r y  .  d i f f e r e n c e i n the purposes  of zoning and h e r i t a g e laws which  may  imply the l a t t e r deserves  York Court of Appeal  However, there i s c l e a r l y  s p e c i a l treatment.  a  In the  d e c i s i o n i n Penn C e n t r a l Railway  New  Co.  v.  203 New  York C i t y  , Mr.  J u s t i c e B r e i t e l found t h a t zoning  to advance a comprehensive p l a n and relatively  operates  i s u s u a l l y a p p l i e d over a  l a r g e a r e a where owners are e q u a l l y burdened by the  r e s t r i c t i o n s on the use of t h e i r land and e q u a l l y b e n e f i t t e d the implementation acting individually  of the comprehensive p l a n .  Property owners  c o u l d not achieve the same b e n e f i t s .  But  h e r i t a g e d e s i g n a t i o n s are not designed to f u r t h e r a g e n e r a l plan.  The  l a n d owner.  burden of the r e s t r i c t i o n s i s p l a c e d on a s i n g l e He w i l l probably not b e n e f i t from  by  the  limitation  60  but  h i sneighbours w i l l .  that heritage  This  regulations  discriminatory effect  be t r e a t e d d i f f e r e n t l y  requires  f r o m down  zoning. A n o t h e r r e a s o n why t h e s t a t u t e s h o u l d  be t r e a t e d  differently  i s that the B r i t i s h Columbia L e g i s l a t u r e , i n enacting the mandatory compensation s e c t i o n that heritage should  2 0 4  , has expressed i t s i n t e n t i o n  r e g u l a t i o n i s more o n e r o u s a r e s t r i c t i o n a n d  therefore  be t r e a t e d d i f f e r e n t l y .  L e g i s l a t u r e has e x p r e s s l y  I n comparison, the  d e n i e d c o m p e n s a t i o n f o r down  u n d e r s. 9 7 2 ( 1 ) o f t h e M u n i c i p a l  Act  2 0 5  zoning  .  b) F o r e s e e a b i l i t y It property the on  i s argued  t h a t a n owner who p u r c h a s e s a u n i q u e  with the view t o redevelop i t i s t a k i n g a r i s k  heritage  legislation will  the use o f t h e p r o p e r t y  f r u s t r a t e h i s plans.  should  be f o r e s e e a b l e .  p u r c h a s e r w o u l d make i n q u i r i e s c o n c e r n i n g j t h e designation  A  restriction  A prudent  possibility of  and a s s e s s t h e a r c h i t e c t u r a l and h i s t o r i c a l  n i f i c a n c e of the s t r u c t u r e before  buying.  that  sig-  I f a r i s k of desig-  n a t i o n e x i s t s , he i s f o r e w a r n e d . Judicial notice  o f t h i s a r g u m e n t was made by Mr. J u s t i c e  K e r n i n 900 G-. S t r e e t A s s o c i a t e s  v. Department o f H o u s i n g and  207 Community D e v e l o p m e n t  .  A developer purchased a century o l d  b u i l d i n g with the i n t e n t i o n of demolishing The  property  Properties  was l i s t e d  on t h e N a t i o n a l R e g i s t e r  so a d e m o l i t i o n  court, i n reviewing  i t and  redeveloping.  of Historic  p e r m i t a p p l i c a t i o n was d e n i e d .  The  t h e d e n i a l , f o u n d i t was n o t a p p r o p r i a t e  to  61  c o n s i d e r the developer's  e x p e c t a t i o n o f p r o f i t s before the  c o u n c i l imposed the landmark r e s t r i c t i o n s because i t was c l e a r l y f o r e s e e a b l e t h a t there would be problems i n attempting develop the p r o p e r t y .  The c o u r t considered  t h a t the property  was already l i s t e d as a landmark when the developer it;  he knew the p r e v i o u s owner had had d i f f i c u l t y  a d e m o l i t i o n permit; to  enact  i n obtaining  and the c i t y had p u b l i c i z e d i t s e f f o r t s  i n f l u e n c e d the developer's  t a t i o n s f o r the use o f the p r o p e r t y . purely  purchased  a stringent h i s t o r i c preservation statute.  factors clearly  to r e -  These  realistic  expec-  The purchase o f l a n d was  s p e c u l a t i v e anyway so that the owner could not complain  about the h e r i t a g e  restrictions.  C l e a r l y , the amount o f knowledge o f the r i s k s to redevelopment i n t h i s case make i t an extreme case.  The f o r e s e e a b i l i t y  argument i s l e s s cogent when d e a l i n g with property undesignated when purchased.  t h a t was  The g e n e r a l l a c k o f awareness o f  h e r i t a g e values i n our s o c i e t y i m p l i e s t h a t a p r o s p e c t i v e purchaser property  i s u n l i k e l y to assess the h i s t o r i c a l value o f a before purchasing  i t f o r redevelopment.  property has been designated,  Even i f the  n o t i c e to a p r o s p e c t i v e  may be inadequate because i n t h i s province  there i s no r e q u i r e -  ment t h a t a d e s i g n a t i o n be r e g i s t e r e d a g a i n s t the t i t l e land t i t l e stered. against  office.  Therefore,  purchaser  i n the  Only a r e s t r i c t i v e covenant need be r e g i f o r e s e e a b i l i t y may be an inadequate argument  compensation.  62  c) M o r a l i t y Denhez  208  g i v e s one  argument based on m o r a l i t y .  a r c h i t e c t u r e i s considered  Because  an a r t form, the d e s t r u c t i o n of a  worthy piece of a r c h i t e c t u r e should acquire the same s a n c t i o n s as the d e s t r u c t i o n of any  work of a r t .  S o c i e t y does not  compensate people f o r r e s t r a i n i n g from a n t i - s o c i a l  behavior  l i k e d e s t r o y i n g a r t so i t should not be o b l i g a t e d to people to r e s t r a i n them from demolishing The  Quebec C i v i l Code s p e c i f i c a l l y  pay  worthy a r c h i t e c t u r e .  s t a t e s t h a t a l l property  values are s u b j e c t to " p u b l i c order and  good morals."  209  This  210  p r i n c i p l e i s also i m p l i c i t  i n our common law system  p r i n c i p l e i m p l i e s t h a t the property  .  The  r i g h t s of an owner should  be s u b j e c t to an o b l i g a t i o n not to engage i n d e m o l i t i o n which has  anti-social effects.  Unfortunately,  because s o c i e t y does  not p r e s e n t l y have a great awareness of h e r i t a g e values, i t does not t r e a s u r e a r c h i t e c t u r e as much as i t does the  con-  v e n t i o n a l a r t forms so the moral shame i s not strong enough f o r t h i s argument to be d) P r a c t i c a l  persuasive!'  Uncertainty  A common argument a g a i n s t awarding compensation i s that i t would be impossible  to a c c u r a t e l y determine the extent  l o s s , i f any,to the property  owner.  Up  of a  to t h i s p o i n t , the  arguments have assumed t h a t d e s i g n a t i o n reduces the value the p r o p e r t y .  T h i s assumption i s not always v a l i d .  can i n c r e a s e the value of the p r o p e r t y . where an e n t i r e d i s t r i c t  i s designated,  of  Designation  This i s most obvious thus i n s u r i n g a c e r t a i n t y  63  i n the surrounding tourist'trade.  a e s t h e t i c s and  b r i n g i n g i n the l u c r a t i v e  Gastown i n Vancouver and  V i c t o r i a are t h i s p r o v i n c e ' s  best examples of t h i s occurrence  Status of being a h e r i t a g e property value.  For example, d e s i g n a t i o n  can alone  211  increase i t s  i s o f t e n valuable f o r r e s i -  d e n t i a l b u i l d i n g s because owners and to pay  B a s t i o n Square i n  tenants  a premium f o r the s p e c i a l s t a t u s .  combine to decrease or i n c r e a s e the value  are o f t e n  willing  S e v e r a l f a c t o r s can of designated  proper-  212 ty  .  They are the type and use  c o s t s of facade upkeep, and I t may on  take years  of the property,  the maintenance  the p o t e n t i a l l e f t f o r a l t e r a t i o n .  a f t e r d e s i g n a t i o n to determine the r e a l  effect  value. The  quantum of compensation would be e q u a l l y  T h i s could be s o l v e d by the use expropriation.  uncertain.  of a r b i t r a t i o n as used i n  A p r o v i n c i a l o f f i c i a l has  suggested t h a t i f  compensation awarded i n a r b i t r a t i o n i s too high, a m u n i c i p a l i t y 213 could then de-designate i n p r o t e c t i n g the property  .  T h i s approach may  l e a d to c e r t a i n t y  owner but the danger of  de-desig-  n a t i o n of the property i s too great a r i s k . ) Compensation Acts as a D e t e r r e n t to Designate e  - I f f f T h e f i f t h and most persuasive  argument a g a i n s t mandatory  compensation i s t h a t i t may  the purpose of h e r i t a g e  property  defeat  l e g i s l a t i o n by d e t e r r i n g m u n i c i p a l i t i e s from d e s i g -  n a t i n g worthy s t r u c t u r e s f o r f e a r they would be l i a b l e f o r l a r g e amounts of compensation.  One  reason l e g i s l a t u r e s impose  compensation i s to f o r c e m u n i c i p a l i t i e s to p r i o r i z e  their  64  costs.  With  determine  l i m i t e d resources, a m u n i c i p a l i t y i s forced to  i f the p o t e n t i a l l y  large cost of designation  c o m p e n s a t i o n w o u l d be b e t t e r s p e n t municipal project.  i n cash-poor  municipalities  thus a v a i l a b l e p r o t e c t i v e measures i n v o l v i n g  are.avoided  popular  D e s i g n a t i o n and t h e p r o t e c t i o n o f h e r i t a g e  s t r u c t u r e s becomes a l o w p r i o r i t y and  on some o t h e r , more  through  compensation  and t h e h e r i t a g e b u i l d i n g s a r e l o s t .  B r i t i s h C o l u m b i a i s a f o r c e f u l example o f t h e d e t e r r e n c e value of compensation.  The g o a l o f p r i o r i z i n g  succeeded as t h e t h r e a t o f l i a b i l i t y to  c o s t s has  has f o r c e d m u n i c i p a l i t i e s  i g n o r e t h e H e r i t a g e C o n s e r v a t i o n A c t p r o v i s i o n s so t h a t  w o r t h y b u i l d i n g s may be d e s t r o y e d much t o t h e p u b l i c ' s d e t r i m e n t . Effectively,  t h e m a n d a t o r y c o m p e n s a t i o n p r o v i s i o n s h a v e made  the H e r i t a g e C o n s e r v a t i o n A c t v i r t u a l l y  useless i nprotecting  214-  heritage properties.  One w r i t e r  noted  ironically,  i n t e n d e d t o promote c o n s e r v a t i o n o f t h e c i t y ' s  "The l a w  architectural  c h a r a c t e r h a s become a n i m p e d i m e n t t o d o i n g s o . " Designations disappear the p r o s p e c t  of having  money a v a i l a b l e  t o pay f o r i t when t h e r e i s l i t t l e  i n the p u b l i c c o f f e r s .  c e l l e n t example o f t h i s . was p a s s e d two  as m u n i c i p a l governments b a l k a t  Before  V a n c o u v e r i s an e x -  the Heritage Conservation Act  i n 1977, t h e V a n c o u v e r C i t y  Council designated  fifty-  s t r u c t u r e s u n d e r i t s H e r i t a g e By-Law No. 4837 d u r i n g a f i v e  year period.  At l e a s t t h i r t y - f o u r o f those  were owned p r i v a t e l y .  buildings designated  The H e r i t a g e C o n s e r v a t i o n A c t w i t h i t s  m a n d a t o r y c o m p e n s a t i o n , c a m e i n t o f o r c e on S e p t e m b e r 2 2 , 1977. Since then, the City  o f Vancouver has only used i t s d e s i g n a t i o n  65  powers f i v e times  .  Pour o f those  owned at the time o f d e s i g n a t i o n .  b u i l d i n g s were c i t y -  The f i f t h  b u i l d i n g was the  Canadian N a t i o n a l Railway s t a t i o n which i s under f e d e r a l j u r i s d i c t i o n and t h e r e f o r e u n a f f e c t e d by m u n i c i p a l r e g u l a t i o n . Therefore, none o f these  designations  i n v o l v e d an unsympathetic  p r i v a t e owner and there was thus never any q u e s t i o n o f compensation. Since to  1977, there has been one h i g h l y p u b l i c i z e d  designate  a private building.  attempt  The f a i l u r e o f the a c t i o n can  be d i r e c t l y a t t r i b u t e d to the t h r e a t o f the l i a b i l i t y  to compen-  sate the owner f o r the r e s u l t i n g decrease i n the property C i t y C o u n c i l i n November o f 1977 considered  d e s i g n a t i n g the  city'-s o l d e s t s t a n d i n g s c h o o l , King George School, property.  The b u i l d i n g occupied  value.  as a h e r i t a g e  an e n t i r e block o f downtown  r e a l estate so t h a t a h e r i t a g e r e s t r i c t i o n wouldfehave s e v e r e l y reduced the value o f the l a n d .  The n e c e s s i t y to maintain a  l a r g e , o l d e r b u i l d i n g would have made redevelopment o f the block i m p o s s i b l e .  The b u i l d i n g ' s owners threatened  a m u l t i - m i l l i o n d o l l a r l a w s u i t a g a i n s t the c i t y  to launch  should the 216  c o u n c i l vote to p r o t e c t the s t r u c t u r e .  Press r e p o r t s  indi-  cated t h a t t h i s t h r e a t i n f l u e n c e d C i t y C o u n c i l i n t o v o t i n g against designation.  Soon a f t e r , the b u i l d i n g was demolished  and r e p l a c e d by a p a r k i n g l o t . Since then,  the c i t y ' s p o l i c y  i s to a v o i d d e s i g n a t i o n i f 217  possible.  In a r e p o r t o f the Heritage  Advisory  Committee  the chairman i n d i c a t e d t h a t the t h r e a t o f f i n a n c i a l has made the "present  ,  liability  l e g i s l a t i o n and d e s i g n a t i o n unusable  66  and p o o r t o o l s t o a c c o m p l i s h  the g o a l of h e r i t a g e  conser-  218 vation."  Thus, the C i t y  of Vancouver completely  by-passes  t h e p r o v i s i o n s o f t h e H e r i t a g e C o n s e r v a t i o n A c t and p r o t e c t s worthy b u i l d i n g s ,  i f a t a l l p o s s i b l e , by  n e g o t i a t i n g w i t h p r i v a t e owners. city  z o n i n g b o n u s e s and tools.  the  i t provides a very  inef-  I n s t e a d , t h e c i t y must g i v e away  d e v e l o p m e n t r i g h t s t r a n s f e r s as  bargaining  A r e c e n t e x a m p l e o f p r o t e c t i o n by n e g o t i a t i o n i n  Vancouver has  b e e n t h e T u d o r Manor e p i s o d e .  a f i f t y - e i g h t year c i t y ' s West E n d . but  simply  S i n c e d e s i g n a t i o n by  i s known t o be t o o e x p e n s i v e ,  fective bargaining tool.  instead  T u d o r Manor i s  o l d , three s t o r y apartment b l o c k i n the Its architectural significance  i t s l o c a t i o n and  diversity  from s u r r o u n d i n g h i g h - r i s e s  make i t a l a n d m a r k t o most V a n c o u v e r r e s i d e n t s . designated  i s limited  Had  the  the s t r u c t u r e , which i t never c o n s i d e r e d ,  have b e e n l i a b l e  f o r a c o n s i d e r a b l e amount o f  i t might  compensation.  An  a c c u r a t e assessment of the decrease  by  the d e s i g n a t i o n i s not  it  would c o s t at l e a s t t h r e e m i l l i o n d o l l a r s to m a i n t a i n  structure  i n the p r o p e r t y  b u t t h e owner  value  estimated the  economically 219 v i a b l e and s t i l l r e m a i n w i t h i n t h e h e r i t a g e r e s t r i c t i o n U n d e r t h e e x i s t i n g z o n i n g , t h e owner c o u l d d e m o l i s h t h e s t r u c 220 t u r e and  i n s u c h a way  available  city  t h a t t h e s t r u c t u r e w o u l d be  build a s i x story building  o f t h e b u i l d i n g and the d e v e l o p e r s  To p r e s e r v e  i t s f o r m a l g a r d e n , t h e c i t y had  to b u i l d  behind  t h e s i z e o f what t h e e x i s t i n g was  .  the  to a l l o w  i t a h i g h - r i s e of over zoning allows.  The  twice  zoning  the c i t y ' s only o p t i o n i n p r o t e c t i n g the facade  facade  bonus  because  the  67  compensation requirement had  made the HCA  impossible  to  im-  221 plement The  g r e a t e s t problem with p r o t e c t i o n by n e g o t i a t i o n i s  t h a t i t only works i f the owner compromises. Vancouver attempted to preserve the O r i l l i a , century  wooden s t r u c t u r e i n the  o f f e r e d to i n c r e a s e  the  allowable  s i n c e the c i t y would not  a  C i t y of  turn-of-the-  c i t y ' s downtown.  owner would r e t a i n the f a c a d e . and  The  zoning  The  on the  Council site  i f the  owner r e j e c t e d the o f f e r  designate,  the b u i l d i n g  was  222 demolished A l b e r t a m u n i c i p a l i t i e s are a l s o l i a b l e to compensate 223 upon d e s i g n a t i o n  .  A s i m i l a r deterring e f f e c t i s also  The  liability  to compensate has  for  a n t a g o n i s t i c p r i v a t e owners. 224  Montreal v. C i t y of Edmonton the  c i t y designated,  c e r t a i n l y provided  an argument  In S l a t t e r & the Bank of  , the p r i v a t e owner of a b u i l d i n g  argued i n an a c t i o n to overturn  n a t i o n that the cost to the c i t y l o s s would be so great  i n compensating him  t h a t i t would not  be  the  f o r the  The  argument  was  r e j e c t e d by the Court which h e l d the matter of the  and  the b e n e f i t to the p u b l i c was  was  subsequently  when the b u i l d i n g ' s owners sought compensation of 225  rescinded  seventy-five  .  C l e a r l y , the f a c t that compensation d e t e r s the p r o t e c t i o n of h e r i t a g e  suasive  cost  best determined by c o u n c i l .  However, the b u i l d i n g ' s d e s i g n a t i o n  and  desig-  i n the p u b l i c i n -  t e r e s t f o r the c i t y to proceed with d e s i g n a t i o n .  million dollars  evident.  designation  s t r u c t u r e s forms a very  argument a g a i n s t mandatory compensation.  The  pernecessary  68  balance  between p r o t e c t i n g the p u b l i c ' s i n t e r e s t and p r o t e c t i n g  the property  owner has not been obtained  t i l t e d completely  i n the property  as the balance  owner's f a v o u r .  is  So long  as  m u n i c i p a l i t i e s a v o i d d e s i g n a t i o n because of the l i a b i l i t y , the property  owner can be c o n f i d e n t t h a t the use  of h i s property  w i l l be u n r e s t r i c t e d by h e r i t a g e r e g u l a t i o n or, at the  very  l e a s t , he w i l l r e c e i v e a v a l u a b l e zoning bo_.nus i n r e t u r n f o r voluntary  preservation.  D i r e c t compensation t h e r e f o r e d e f e a t s the p r o t e c t i v e purpose of h e r i t a g e property alternatives.  Designation  owner consents. has  legislation.  There are  several  c o u l d be a v a i l a b l e only where the  In the U n i t e d S t a t e s , the Reagan a d m i n i s t r a t i o n  amended the N a t i o n a l H i s t o r i c P r e s e r v a t i o n Act of 1966  to  a l l o w N a t i o n a l R e g i s t e r l i s t i n g and p r o t e c t i o n only where the ? ?6 owner agrees  .  p r o t e c t e d and an owner has structure.  Once again, the landmark owner i s f u l l y  the b u i l d i n g r e c e i v e s no p r o t e c t i o n .  In O n t a r i o ,  a s i m i l a r power over the p r e s e r v a t i o n of h i s I f he a p p l i e s f o r approval  t u r e , the very most c o u n c i l can do  to demolish the s t r u c -  i s delay the d e m o l i t i o n f o r  PP7 270 to  days  '.  The  delay  reach a compromise.  praised  system i s designed  to f o r c e the p a r t i e s  Although t h i s type of system has  f o r f o r c i n g the p u b l i c to become aware of  been  and  a c t i v e i n the p r e s e r v a t i o n of the s t r u c t u r e , i t u l t i m a t e l y provides  inadequate p r o t e c t i o n f o r a worthy b u i l d i n g owned by  a p a r t y t o t a l l y unsympathetic to i t s p r e s e r v a t i o n . A very  simple  s o l u t i o n to t h i s compensation problem would  be to l e g i s l a t e t h a t no  compensation i s ever necessary  with  69  designation.  But c l e a r l y , d e s i g n a t i o n  burden on the p r i v a t e property s a t i o n would be u n f a i r . burden of p r e s e r v i n g  structure.  Compensation would a l l e v i a t e the  the s t r u c t u r e f o r the p u b l i c ' s b e n e f i t and m a i n t a i n and r e h a b i l i t a t e  Thus, compensation i s necessary but the present  system i s inadequate and d e s t r u c t i v e . diction,  too much o f a  owner and to provide no compen-  provide an i n c e n t i v e to p r o p e r l y the  places  I propose to e l i m i n a t e  n a t i o n and i n s t e a d implement  To solve t h i s  contra-  d i r e c t compensation f o r d e s i g -  an a l t e r n a t i v e form of compen-  s a t i o n that would be l e s s onerous on the m u n i c i p a l i t y y e t p r o t e c t the owner from the burdens of  designation.  D. A l t e r n a t i v e Forms of Compensation Various forms of compensation or a l t e r n a t i v e forms of p r o t e c t i o n f o r the property North America.  owner have been implemented  American h i s t o r i c p r e s e r v a t i o n  t i c u l a r l y h e l p f u l because, f o r many y e a r s , designation United  was  States  across  laws are par-  compensation f o r  thought to be c o n s t i t u t i o n a l l y r e q u i r e d .  The  C o n s t i t u t i o n d i v i d e s governmental powers i n t o 2  p o l i c e and eminent domain powers. as being i n f u r t h e r a n c e general  The p o l i c e power i s d e f i n e d  of public health,  s a f e t y , moral and  welfare while the eminent domain f u n c t i o n of govern-  ment i s to acquire owner's consent.  p r i v a t e i n t e r e s t s i n property  without the  A person a f f e c t e d by a p o l i c e power has no  r i g h t to compensation.  But a property  owner a f f e c t e d by the  eminent domain power i s e n t i t l e d to due process under the law by being compensated  f o r the property  i n t e r e s t taken.  Both  70  powers may  only  be e x e r c i s e d to advance a proper governmental  In 1974,  purpose.  Professor  Costonis  governmental r e s t r i c t i o n reduces the a f f e c t e d property from earning  to such an extent  wrote that i f the income p o t e n t i a l of  the  that i t prevents the owner  a reasonable r e t u r n , i t w i l l r e q u i r e  compensation  230 as a use nations  of the eminent domain power  .  Since  have a tendency to g r e a t l y reduce the  landmark d e s i g -  income p o t e n t i a l  of a f f e c t e d p r o p e r t i e s , many American m u n i c i p a l i t i e s assumed i t was  an eminent domain power and  that provided  thus enacted ordinances  compensation, e i t h e r d i r e c t l y  vative incentives. In 1978, the U n i t e d  States  or through  Supreme Court addressed  i s s u e i n Penn C e n t r a l T r a n s p o r t a t i o n  Co.  v. New  innothe 231  York C i t y  and h e l d that landmark ordinances i n v o l v e d a p o l i c e power. Manhattan's Grand C e n t r a l S t a t i o n was as a landmark and  protected  priate alterations. owner's plans  The  designated  from d e m o l i t i o n  c i t y refused  to b u i l d a f i f t y  and  found that h i s t o r i c p r e s e r v a t i o n  ship.  The  use  city  inapproterminal  s t o r y o f f i c e complex above the  t u t i o n a l i t y of the landmark d e s i g n a t i o n .  the present  any  to approve the  e x i s t i n g b u i l d i n g f o r c i n g the owner to challenge  of the p u b l i c and  by the  was  Mr.  clearly  the c o n s t i -  J u s t i c e Brennan f o r the  benefit  because i t d i d not a c t u a l l y i n t e r f e r e with  of the t e r m i n a l , there  ordinance was  c i t y ' s p o l i c e power and  therefore thus no  This d e c i s i o n d i d not  was  no  economic hard-  a v a l i d e x e r c i s e of  compensation was  the  required.  completely c l e a r up the i s s u e 232 because s e v e r a l commentators noted t h a t Brennan appeared  71  i n f l u e n c e d by the f a c t t h a t the ordinance  provided  compensation  with the r i g h t to t r a n s f e r the unused development r i g h t s o f the structure.  Thus, the s e v e r i t y o f the property  reduced s u f f i c i e n t l y  r e s t r i c t i o n was  by the compensation to make i t a p o l i c e 233  power.  Although some c i t i e s , notably  Chicago  , used the  Penn C e n t r a l d e c i s i o n as a u t h o r i t y to immediately c u t o f f compensation f o r d e s i g n a t i o n , other c i t i e s have assumed that even though d e s i g n a t i o n may be a v a l i d e x e r c i s e o f the p o l i c e power, compensation may i n s u r e i t w i l l continue p r e t e d as a p o l i c e power. provide  to be i n t e r -  Thus, American c i t i e s continue to  i n n o v a t i v e i n c e n t i v e s and methods to p r o t e c t the l a n d -  owner's property  r i g h t s upon d e s i g n a t i o n .  1. Purchase and E x p r o p r i a t i o n The most obvious scheme that would i n s u r e the p u b l i c would be able to see and enjoy for f u l l  a s t r u c t u r e and a t the same time  provide  compensation to the owner would be f o r the p u b l i c body  to purchase or e x p r o p r i a t e  the s t r u c t u r e .  With the s t r u c t u r e  owned by the p u b l i c body, i t s p r e s e r v a t i o n would be assured. For a governmental body to e x p r o p r i a t e p r o p e r t y ,  i t must  be given the power to do so very e x p r e s s l y and t h a t power i s 234  sometimes l i m i t e d to s p e c i f i c purposes ^ .  For example, the  C i t y o f Edmonton e x p r o p r i a t e d an o l d h o t e l u s i n g powers given 235  it  by the A l b e r t a Housing Act  rehabilitations  When evidence  p r i m a r i l y to preserve A l b e r t a Court  to e x p r o p r i a t e l a n d f o r housing showed t h a t the c i t y  expropriated  the h e r i t a g e value o f the s t r u c t u r e , the  o f Queen's Bench quashed the e x p r o p r i a t i n g by-law  72  because the c i t y  o n l y h a d t h e power t o e x p r o p r i a t e when t h e  o b j e c t i v e was a h o u s i n g r e h a b i l i t a t i o n programme Only the h e r i t a g e  statutes of Ontario  .  and N o v a S c o t i a  g i v e m u n i c i p a l i t i e s t h e e x p r e s s power t o e x p r o p r i a t e f o r heritage preservation.  The S a s k a t c h e w a n a c t h a d a  similar  239  p r o v i s i o n t h a t was r e p e a l e d o f most p r o v i n c e s i n more g e n e r a l In B r i t i s h palities  i n 1982  w o u l d have t o r e l y 2  Columbia, i t i s u n c l e a r whether a l l m u n i c i -  The C i t y  o f Vancouver has s u f f i c i e n t  e x p r o p r i a t e wherever the c i t y  acquire r e a l property owner.  property  on e x p r o p r i a t i o n p o w e r s  enabling s t a t u t e s ^ .  S e c t i o n 532 o f t h e V a n c o u v e r C h a r t e r  the  The m u n i c i p a l i t i e s  h a v e t h e power t o e x p r o p r i a t e f o r t h e p u r p o s e o f  preservation.  to  .  but f a i l s  4  power.  gives the c i t y  t h e power  e x e r c i s e d any o f i t s p o w e r s t o t o come t o a n a g r e e m e n t w i t h  One o f t h e p o w e r s u n d e r w h i c h t h e c i t y  i s s e c t i o n 13(d) o f the H e r i t a g e  The e x p r o p r i a t i o n o f h e r i t a g e p r o p e r t y  may  Conservation  acquire Act.  i s t h u s an a v a i l a b l e  option to the c i t y . 24.2  M u n i c i p a l i t i e s g o v e r n e d by t h e M u n i c i p a l A c t such o p t i o n .  The M u n i c i p a l A c t d o e s n o t p r o v i d e  e x p r o p r i a t i n g power. for  Instead  s p e c i f i c purposes only.  property public, likely  a  general  e x p r o p r i a t i o n powers a r e g i v e n S e c t i o n 680 o f t h e A c t  a p o s s i b l e power f o r w h i c h h e r i t a g e p r o p e r t y priated.  have no  may  provides  be e x p r o -  The s e c t i o n empowers a m u n i c i p a l i t y t o e x p r o p r i a t e f o r "pleasure,  r e c r e a t i o n o r community u s e s o f t h e  i n c l u d i n g . . . ( a ) museum . . .."  This s e c t i o n would  l i m i t e x p r o p r i a t i o n t o b u i l d i n g s t h a t w i l l have a  73  s p e c i a l use  after acquisition.  S e c t i o n 530  the power to e x p r o p r i a t e property  o f the Act  provides  the c i t y wishes to develop  f o r r e s i d e n t i a l or commercial use.  T h i s c o u l d a l l o w a muni-  cipality  for rehabilitation for a  to acquire worthy property  non-community use.  C e r t a i n l y , a power to e x p r o p r i a t e f o r the  express purpose of h e r i t a g e c o n s e r v a t i o n would provide  a more  u s e f u l power f o r a m u n i c i p a l i t y than r e l i a n c e on these more g e n e r a l powers. Even i f B r i t i s h Columbia m u n i c i p a l i t i e s had power to e x p r o p r i a t e  an express  s p e c i f i c a l l y f o r heritage preservation,  i t would not s o l v e the problems c r e a t e d by the HCA's mandatory compensation p r o v i s i o n s .  I f m u n i c i p a l i t i e s c u r r e n t l y avoid  d e s i g n a t i o n because of an i n a b i l i t y decrease i n the p r o p e r t y ' s  value, they  from p r o t e c t i o n by e x p r o p r i a t i o n due greater costs.  to compensate f o r the will refrain  completely  to i t s s i g n i f i c a n t l y  No m u n i c i p a l i t y could ever a f f o r d to purchase  a l l worthy s t r u c t u r e s w i t h i n i t s j u r i s d i c t i o n .  The  financial  burden on the m u n i c i p a l i t y would continue  after acquisition  the cost of maintenance and r e s t o r a t i o n .  The  with  m u n i c i p a l i t y would  a l s o s u f f e r f i n a n c i a l l y with the removal of the property  from  24-3 the tax r o l l s ^ .  The  U n i t e d S t a t e s Supreme Court  mentioned  a f u r t h e r problem i n t h a t p u b l i c ownership of b u i l d i n g s o f t e n r e s u l t s i n p r e s e r v a t i o n as museums r a t h e r than productive  f e a t u r e s of the urban s c e n e . "  of the New  York Court  d e s i r e to preserve  2 4 4  Mr.  "economically Justice Breitel  of Appeal i n d i c a t e d t h a t c i t i e s might  landmarks through compulsory purchase powers  i n a f f l u e n t times but never when the c i t y  is in financial distress  74  or i f a l e s s expensive  alternative for preservation i s  245 available  .  T h e r e f o r e , e x p r o p r i a t i o n or purchase i s not a  f e a s i b l e a l t e r n a t i v e so long as l e s s expensive available.  The  subsequent methods surveyed  t h a t such a l t e r n a t i v e s are  methods are  w i l l demonstrate  available.  2. R e v o l v i n g Funds Scheme A v a r i a t i o n of purchase or e x p r o p r i a t i o n would be to set up a r e v o l v i n g fund.  From the fund, money could be used to  purchase h i s t o r i c b u i l d i n g s i n danger of d e m o l i t i o n .  The  p r o p e r t i e s would then be s o l d to a buyer sympathetic  to the  need to p r o t e c t the h e r i t a g e b u i l d i n g .  The  proceeds of t h i s  s a l e would go i n t o the r e v o l v i n g fund and c o u l d be used to purchase other s t r u c t u r e s f o r a s i m i l a r r e s a l e . be administered by a p u b l i c body, or more l i k e l y , foundation.  The  fund  can  by a c h a r i t a b l e  A l a r g e cash o u t l a y to s t a r t the fund and make the  f i r s t purchase i s necessary be recovered,, almost f u r t h e r funds  but t h e o r e t i c a l l y , t h i s money should  e n t i r e l y with each r e s a l e so t h a t no  should be n e c e s s a r y .  L i t t l e p u b l i c money i s  u l t i m a t e l y spent; the b u i l d i n g i s preserved and the b u i l d i n g ' s owner i s p r o t e c t e d by being bought out and The.subsequent purchaser  suitably  compensated.  w i l l know e x a c t l y what h i s burdens as  a h e r i t a g e property owner are before he commits h i m s e l f so that s p e c i a l p r o t e c t i o n f o r him  i s not  necessary.  To best implement such a scheme, the a d m i n i s t e r i n g body should i d e a l l y  be g i v e n two  powers.  Firstly,  the power to  e x p r o p r i a t e would provide a l a s t r e s o r t to save a s t r u c t u r e  75  where n e g o t i a t i o n s with an owner f a i l . a t i o n would a l s o provide  The t h r e a t o f e x p r o p r i -  an important b a r g a i n i n g  i n s u r i n g the p r i c e p a i d f o r b u i l d i n g s remains The  tool i n  reasonable.  l a c k o f c l e a r e x p r o p r i a t i n g powers f o r h e r i t a g e  v a t i o n has been d i s c u s s e d  i n the previous  preser-  section.  Secondly, the power to e n t e r r e s t r i c t i v e covenants with the purchasers i s i n t e g r a l to the success scheme.  I n r e s e l l i n g the property,  to preserve  o f a r e v o l v i n g funds  the purchaser must promise  the i n t e g r i t y o f the s t r u c t u r e and maintain  s p e c i f i e d standards.  To make t h i s covenant t r u l y  i t must bind f u t u r e owners should Under the common law,  the property  i t to  effective,  be s o l d a g a i n .  a r e s t r i c t i v e covenant could only run  with the l a n d and bind f u t u r e owners i f the party with whom the owner c o n t r a c t s owns l a n d t h a t d i r e c t l y covenant. enforced  b e n e f i t s from the  P a r t i e s who d i d not own such l a n d could not have the covenant a g a i n s t subsequent owners because t h e i r  r i g h t under the covenant was h e l d i n g r o s s . r u l e developed because before implemented, r i g h t s i n gross  land r e g i s t r y  T h i s common law systems were  c o u l d e a s i l y become l o s t c r e a t i n g  246  uncertainty of t i t l e  |  Since the i n t r o d u c t i o n o f l a n d r e g i s t r y land t i t l e reform  systems, Canadian l e g i s l a t u r e s have been able to  the law and a l l o w covenants i n gross  cumstances.  and the Torrens  inocertain c i r -  In B r i t i s h Columbia, s. 27 o f the Heritage  vation Act provides  Conser-  t h a t the p r o v i n c i a l Crown, a m u n i c i p a l  c o u n c i l or the B r i t i s h Columbia Heritage  T r u s t ^ may 2  enforce  an easement or covenant a g a i n s t the owner even i f i t does not  76  b e n e f i t l a n d owned by the covenantee.  A l l p r o v i n c e s now  l e g i s l a t i o n a l l o w i n g easements or covenants i n gross s t a t u t e s provide the covenant may by the a s s i g n e e .  Although  be a s s i g n a b l e and  have  .  All  enforceable  B r i t i s h Columbia l i m i t s the power  to covenant to governments, m u n i c i p a l i t i e s and the government f o u n d a t i o n , some p r o v i n c e s a l l o w the covenant to be  entered 24.9  i n t o by p r i v a t e o r g a n i z a t i o n s and Although  t h i s may  some p r i v a t e c i t i z e n s  expand the p o t e n t i a l p r o t e c t i o n by a l l o w i n g  p r i v a t e i n t e r e s t s to make covenants,  care should be taken to  insure t h a t the covenantee i s s e r i o u s , r e l a t i v e l y and ready  .  to e n f o r c e .  permanent  T h e r e f o r e , a government o f f i c i a l  should  have to approve the p r i v a t e covenantees before the covenant i s effective. One  of the most s u c c e s s f u l r e v o l v i n g funds  schemes i n 250  North America has been the Galveston, Texas programme c i t y had a l a r g e c o n c e n t r a t i o n of 19th as the Strand.  The  Century  The  b u i l d i n g s known  C i t y C o u n c i l had p r e v i o u s l y t r i e d to p r e -  serve the s t r u c t u r e s through  d e s i g n a t i o n but b i t t e r o p p o s i t i o n  from e x i s t i n g landowners made i t p o l i t i c a l l y city  .  impossible.  The  then turned to a p r i v a t e f o u n d a t i o n to preserve the  area  without  designation.  Funds were donated by l o c a l  businesses  and n a t i o n a l f o u n d a t i o n s to s t a r t up the programme. b u i l d i n g s purchased  The  first  were r e s o l d at a lower p r i c e to r e f l e c t  the e f f e c t of a r e s t r i c t i v e  covenant on the value of the  property and a l s o to b u i l d momentum by speeding up s a l e s and 251  restoration activity  i n the a r e a  .  The  deed r e s t r i c t i o n  s p e c i f i e d t h a t the b u i l d i n g c o u l d not be destroyed or a l t e r e d  77  without  the f o u n d a t i o n ' s a p p r o v a l .  S p e c i f i c points included  c l e a n i n g and r e p o i n t i n g of b r i c k , r e p l a c i n g f i r e interior fire  s t a i r s , r e s t o r i n g c c a s t i r o n , and  escapes  with  restricting  252 the number and s i z e of s i g n s a l s o contained undertakings accordance  J  .  The  agreement to  purchase  to r e s t o r e the e x t e r i o r i n  with the f o u n d a t i o n ' s own  specifications.  c o n t r a c t s p e c i f i e d the minimum investment  the new  The  owner  was  r e q u i r e d to make i n the r e s t o r a t i o n and a d e a d l i n e f o r i t s completion.  Should t h i s u n d e r t a k i n g be breached,  the foun-  d a t i o n c o u l d c o l l e c t l i q u i d a t e d damages or enforce  specific  253 performance insure the new  .  The main purpose of t h i s undertaking was  owner d i d not s p e c u l a t e .  foundation promised  to  For i t s p a r t , the  to encourage and c o n t r o l the r e s t o r a t i o n  of the area. The p r a c t i c a l problem with p r o t e c t i o n by covenant  i s t h a t an owner must consent.  a m u n i c i p a l i t y may  restrictive  To o b t a i n such  have to give up a great d e a l .  example i l l u s t r a t e s t h i s . p r o p e r t y , an owner was  The  consent,  Galveston  In purchasing the f o u n d a t i o n ' s  f a c e d with very s t r i n g e n t  that must have s e v e r e l y reduced  undertakings  the p r o p e r t y ' s v a l u e .  f o r e , the f o u n d a t i o n had to reduce  There-  the r e s a l e p r i c e c o n s i d e r a b l y  from the amount i t o r i g i n a l l y p a i d so t h a t the fund would always have i n v o l v e d a d e f i c i t . fund would never be r e c o v e r e d .  The The  sum  that originated  foundation a l s o  the  attempted  to o b t a i n deed r e s t r i c t i o n s from e x i s t i n g owners but was not 254 surprisingly unsuccessful . The only c o n s i d e r a t i o n o f f e r e d  78  by.the f o u n d a t i o n was the promise to encourage and c o n t r o l the p r e s e r v a t i o n o f the area which would be i n s u f f i c i e n t  consider-  a t i o n f o r a p r i v a t e property owner f a c i n g r e s t r i c t i o n s on the p r o p e r t y ' s use. As the area began to r e h a b i l i t a t e , the property  values  i n c r e a s e d meaning the f o u n d a t i o n had to make g r e a t e r expend i t u r e s to purchase p r o p e r t i e s .  At t h i s p o i n t , the r e s e l l  p r i c e s would c l e a r l y have been h i g h e r r e f l e c t i n g the i n c r e a s e d p o p u l a r i t y o f the area so t h a t the r e s t r i c t i o n s and undertakings would have been c o n s i d e r e d l e s s o f a burden.  But i t a l s o  meant that the f o u n d a t i o n was o u t b i d i n purchases developers  by p r i v a t e  and thus i t l o s t c o n t r o l over the a e s t h e t i c s of the  structures.  F o r example, the f o u n d a t i o n was o u t b i d i n attempts  to purchase a v a l u a b l e a r t deco t r a i n s t a t i o n .  I t then had to  r e l y on a massive e x p r e s s i o n o f p u b l i c sentiment  to f o r c e the  b u i l d i n g ' s owners to renege on t h e i r d e a l to s e l l l i t i o n firm.  P u b l i c sentiment  was a very v o l a t i l e  making i t an u n r e l i a b l e t o o l f o r p r e s e r v a t i o n .  to a demosubstance  The f o u n d a t i o n  could hotehave r e l i e d on i t to save other b u i l d i n g s f o r which i t was o u t b i d .  To always be s u c c e s s f u l , the f o u n d a t i o n needed  some s o r t o f b a r g a i n i n g power to w i e l d .  D e s i g n a t i o n or e x p r o p r i -  a t i o n powers c o u l d have p r o v i d e d t h a t b a r g a i n i n g powers. One  o f the reasons  the Galveston programme succeeded was  the f a c t t h a t s e v e r a l i n c e n t i v e s were a v a i l a b l e to purchasers. The reduced  purchase p r i c e was the most obvious  but purchasers  were a l s o e n t i t l e d to very a t t r a c t i v e f i n a n c i n g from banks ''-'. 2  local  I t i s d o u b t f u l t h a t t h i s c o u l d be r e p l i c a t e d  else-  79  where.  The  United  States  income tax p r o v i s i o n s with generous  deductions f o r expenses f o r the r e n o v a t i o n  of h e r i t a g e  properties  a l s o made the f o u n d a t i o n ' s p r o p e r t i e s much more a t t r a c t i v e to prospective  256 purchasers ' .  In s e t t i n g up a s i m i l a r programme i n B r i t i s h m u n i c i p a l i t i e s have the power under s. 269  of the  Columbia, Municipal  257 Act  J  to grant  a sum to an o r g a n i z a t i o n that could o r i g i n a t e 258  the r e v o l v i n g fund to implement and has  the a b i l i t y  conservation would go  .  Alternatively, i f a municipality  administer to acquire  a r e v o l v i n g fund scheme i t s e l f , i t and  dispose  of land f o r h e r i t a g e  under s. 13(d)  of the HCA. Proceeds of the r e s a l e 259 i n t o a s p e c i a l fund or a p p l i e d to the debt i n c u r r e d 260 J  f o r the purchase of any implying  r e a l property  by the  the fund would not n e c e s s a r i l y be  More express powers to set aside f o r the purchase and  In c o n c l u s i o n ,  specifically  p r o p e r t i e s would be  a s e l f - p e r p e t u a t i n g fund.  scheme would be expensive so that i t s  t h e o r e t i c goal of r e c o v e r i n g Since  self-perpetuating.  the r e v o l v i n g funds scheme i s i m p r a c t i c a l .  To be s u c c e s s f u l , the  unrealistic.  municipality  a s p e c i a l fund  s a l e of h e r i t a g e  necessary to s u c c e s s f u l l y set up  a l l money o r i g i n a l l y  incentives like  inexpensive  generous income tax deductions are not  be a t t r a c t i v e to p u r c h a s e r s .  spent i s  financing  and  a v a i l a b l e i n Canada,  heritage properties with stringent r e s t r i c t i v e not  wishes  covenants would  Because i t w i l l only work  with the e x i s t i n g owner's consent, the method g i v e s him  plenty  of p r o t e c t i o n but the p r o t e c t i o n to the b u i l d i n g i s inadequate and n e c e s s a r i l y made v a r i a b l e by the whims of the owner.  80  3 . T r a n s f e r o f Development Development may  Rights  r i g h t s are the amount of f l o o r area t h a t  be developed  on a g i v e n p a r c e l o f l a n d .  Heritage  struc-  t u r e s are f r e q u e n t l y much s m a l l e r than the s i z e a u t h o r i z e d by the zoning.  T h e r e f o r e , these s t r u c t u r e s possess unused de-  velopment r i g h t s .  Heritage r e s t r i c t i o n s prevent  the owners  of these b u i l d i n g s to e x p l o i t these unused and p o t e n t i a l l y profitable rights.  To compensate  the owner f o r the h e r i t a g e  r e s t r i c t i o n , many c i t i e s a l l o w him to t r a n s f e r h i s unused development r i g h t s to other p r o p e r t i e s unencumbered by the heritage r e s t r i c t i o n s . l o c a t e d i n the densely  Since h e r i t a g e s t r u c t u r e s are o f t e n developed  commercial cores of c i t i e s ,  t h e i r unused development r i g h t s can be i n demand and q u i t e valuable.  Thus, the t r a n s f e r o f these r i g h t s should  adequately  compensate  an owner f o r the burden of h e r i t a g e d e s i g n a t i o n at 261  no cost to a m u n i c i p a l i t y .  As Gostonis d e s c r i b e s i t  t r a n s f e r of development r i g h t s  (known as TDR)  , the  s h i f t s preser-  v a t i o n c o s t s from the c i t y and landmark owner to the downtown development  process.  I n t e g r a l to understanding  the TDR  system i s acceptance  that property i n v o l v e s a bundle o f e a s i l y d i s t i n g u i s h a b l e r i g h t s i n s t e a d of a u n i t a r y concept to Richards  of ownership.  According  , among the common law r i g h t s i s the r i g h t to  b u i l d upwards f o l l o w i n g the maxim cujus e s t solum, ejus e s t usque ad c o e l u m ^ . 2  U n t i l about a century  was l i m i t e d by c o n s t r u c t i o n technology  ago, t h i s  right  but once s t e e l s k e l e t o n  81  c o n s t r u c t i o n was p e r f e c t e d , b u i l d i n g s of tremendous were p o s s i b l e . to  When zoning  height  laws were implemented, the r i g h t  b u i l d upwards was r e s t r i c t e d by c e r t a i n height r e g u l a t i o n s .  Presumably, the e j u s e s t usque ad coelum maxim may  be m o d i f i e d  to  provide  to  be the r i g h t to "the i n c l u s i v e use and c o n t r o l of a d e s i g -  nated  an owner with a i r r i g h t s t h a t have been d e f i n e d  space w i t h i n d e l i n e a t e d boundaries."  might be separated  from the other i n t e r e s t s i n the property  and t r a n s f e r r e d to someone e l s e . for  These a i r r i g h t s  t h i s bundle of r i g h t s theory.  There i s much l e g a l precedent M i n e r a l r i g h t s are commonly 265  separated  from s u r f a c e r i g h t s i n B r i t i s h Columbia  ments and u t i l i t i e s  .  Govern-  f r e q u e n t l y acquire l e s s than fee simple  r i g h t s by e x p r o p r i a t i n g rights-of-way poles  .  Separating  provide  any a d d i t i o n a l problems.  for installing  utility  the development or a i r r i g h t s would not  a) TDR Use i n Vancouver The C i t y of Vancouver has used the t r a n s f e r of development rights i n isolated instances.  The most important  use was the  scheme implemented to save C h r i s t Church C a t h e d r a l , a d e s i g nated h e r i t a g e b u i l d i n g , from d e m o l i t i o n .  The s t r u c t u r e s a t  on one of the most v a l u a b l e l o t s i n downtown Vancouver. Church's congregation  had decided  the church was no  The  longer  adequate f o r t h e i r purposes and t h e r e f o r e i t wanted to t e a r the s t r u c t u r e down and r e p l a c e i t with a combined o f f i c e and church. designated  tower  C o u n c i l r e f u s e d to approve the plan and i n s t e a d the s t r u c t u r e as a h e r i t a g e s i t e p r o t e c t i n g i t from  82  demolition.  In December of 1974, the congregation found a  s o l u t i o n to s u r v i v e f i n a n c i a l l y  i n the structure".' . I t entered 1  i n t o an agreement with a development company who purchased the unused development r i g h t s of the church f o r a sum of twentynine m i l l i o n d o l l a r s spread out over 105 y e a r s .  With the  compensation p a i d f o r the development r i g h t s , the church was able to pay f o r e n g i n e e r i n g r e p a i r s and the ongoing p r e s e r v a t i o n of the s t r u c t u r e .  The church agreed to r e s t r i c t the  development of i t s l o t f o r the term of the c o n t r a c t .  The  development company, w i t h the c i t y ' s approval, was able to t r a n s f e r these development r i g h t s to the a d j o i n i n g l o t . t h e r d e v e l o p e r was able to b u i l d Park P l a c e , the c i t y ' s  There largest  o f f i c e b u i l d i n g which i s f a r l a r g e r than what the e x i s t i n g zoning would have allowed The most r e c e n t TDR scheme implemented i n Vancouver was with the developers of the Price-Waterhouse Tower.  In exchange  f o r the promise to b u i l d a l a r g e p u b l i c p l a z a on one l o t , the developers were e n t i t l e d to t r a n s f e r the unused  development  r i g h t s from t h a t l o t to the a d j o i n i n g l o t where a l a r g e  tower  with valuablesviews c o u l d be b u i l t l a r g e r than the a l l o w a b l e . 268 zoning b) The New York P i t y E x p e r i e n c e Vancouver has l i m i t e d any t r a n s f e r s to l o t s the t r a n s f e r o r p r o p e r t y .  adjoining  T h i s i s the system u s e d i i n New York  C i t y where the c o n t i n e n t ' s most s u c c e s s f u l TDR scheme has been o p e r a t i n g f o r n e a r l y twenty y e a r s .  A c c o r d i n g to R i c h a r d s ,  83  with r a p i d development i n the 1950's and 1960*s, the c i t y discovered by  zoning  t h a t many o l d e r landmarks were being  endangered  ordinances which encouraged new o f f i c e  Urban economics d i c t a t e d t a l l  buildings  269  b u i l d i n g s were the only f e a s i b l e  way to use the l i m i t e d space i n Manhattan.  Older b u i l d i n g s  were too small to compete and thus were destroyed  and r e p l a c e d  with towers p r o v i d i n g more space, more c o n c e n t r a t i o n o f f a c i l i t i e s and more p r e s t i g e .  To supplement e x i s t i n g l a n d -  mark p r e s e r v a t i o n programmes, the c i t y enacted a TDR ordinance a l l o w i n g the t r a n s f e r o f a designated  landmark's unused de-  velopment r i g h t s to a d j o i n i n g p r o p e r t i e s owned by the same 270 party  .  Once t r a n s f e r r e d , the r i g h t s were gone f o r e v e r so  that the landmark would always be r e s t r i c t e d to i t s e x i s t i n g density  thus removing an  i n c e n t i v e to demolish.  Under the New York system, the d e n s i t y neighbourhood would not be i n c r e a s e d example, since the e x i s t i n g zoning  over the e n t i r e  by the t r a n s f e r .  For  o f the area would accommodate  "X" b u i l d i n g s with "Y" square f e e t o f usable space each, the area's d e n s i t y w i l l remain the same with X - 2 b u i l d i n g s with a density  o f Y square f e e t , one b u i l d i n g , the designated  struc-  t u r e , with Y - Z square f e e t and one b u i l d i n g , on the t r a n s f e r e e l o t , with Y + Z square f e e t .  Thus, a l g e b r a i c a l l y ,  T o t a l Density  The  density The  Allowed = X x Y = XY ' ( X - 2 ) ( Y ) + Y - Z + Y + Z = XY - 2Y + Y + Y + (Z - Z) = XY +(2Y - 2Y) + 0 = XY + 0 = XY. o f the neighbourhood remains constant.  prototype f o r TDRs i n New York C i t y was the Amster  84  Yard p r o j e c t .  The yard c o n s i s t e d o f a group o f 19th  b r i c k r e s i d e n c e s surrounding a c o u r t y a r d . been designated as p r o t e c t e d s t r u c t u r e s .  Century  The b u i l d i n g s had The owner o f the  a d j o i n i n g l o t wished to b u i l d a forty-two s t o r y o f f i c e but the zoning d e n s i t y allowance  was i n s u f f i c i e n t .  The c i t y  gave s p e c i a l p e r m i s s i o n to the landmark owner to s e l l square  f e e t o f unused f l o o r area r a t i o  tower  30,000  (PAR) to the developer  g i v i n g him enough d e n s i t y to b u i l d h i s p r o j e c t .  In r e t u r n ,  the developer p a i d a l a r g e sum o f money o f which a p o r t i o n had to be s e t aside i n a t r u s t fund to be used f o r the maintenance of the landmark.  The developer was a l s o r e q u i r e d to  make a number o f d e s i g n concessions so t h a t only c o l o u r s and m a t e r i a l s compatible  with the landmarks would be used.  Thus,  the b u i l d i n g s were p r o t e c t e d by the d e s i g n a t i o n and the owner was duly compensated f o r the r e s t r i c t i o n and p r o v i d e d means with which to m a i n t a i n the b u i l d i n g s at no c o s t to the municipality  2 7 1  .  The requirement  t h a t r e s t r i c t e d t r a n s f e r s to a d j o i n i n g  l o t s a l s o owned by the same party f o r c e d the c i t y to make unique arrangements i n order to give developers the development r i g h t s they d e s p e r a t e l y wanted.  The owner o f a l o t adjacent  to a court house which was a c i t y owned landmark, wished to b u i l d an o f f i c e tower t h a t would exceed the d e n s i t y allowed by the area's zoning ordinance.  To accommodate the t r a n s f e r  of the court house's unused development r i g h t s , the c i t y l e a s e d the b u i l d i n g to the developer f o r s e v e n t y - f i v e years and then subleased i t back.  The s e v e n t y - f i v e year l e a s e made the  85  developer the deemed owner o f the court house property and allowed  him to t r a n s f e r the unused development r i g h t s to h i s  adjoining property.  The developer p a i d the c i t y three  d o l l a r s f o r the l e a s e .  million  I n a p p r o p r i a t e l y , nonerof t h a t sum was  earmarked f o r maintenance or r e s t o r a t i o n o f the landmark The  272  .  r e s t r i c t i o n a l l o w i n g t r a n s f e r only to a d j o i n i n g and  commonly owned p r o p e r t i e s was e v e n t u a l l y thought to be too 273  limiting  I t d i d not provide  s u f f i c i e n t compensation to  the landmark owner because f r e q u e n t l y there was no l o t a v a i l a b l e to accept  the t r a n s f e r and thus the development r i g h t s were  never u t i l i z e d .  The ordinance was t h e r e f o r e amended to allow 274.  the t r a n s f e r to l o t s across  the s t r e e t or contiguous  .  The  owner was e n t i t l e d to t r a n s f e r the development r i g h t s along a s e r i e s o f contiguous l o t s p r o v i d i n g he owned them a l l , a l l o w i n g the u l t i m a t e  t r a n s f e r e e l o t to be a c i t y block o r  f a r t h e r away from the landmark.  T h i s amendment was  specifically  designed to accommodate the owners o f the Grand C e n t r a l a designated surrounding  landmark.  thus  Terminal,  The owners owned much o f the land  the t e r m i n a l .  In the subsequent challenge  by the  owners o f the c o n s t i t u t i o n a l i t y  o f the landmark r e s t r i c t i o n , 275 both the New York Court o f Appeal and the United S t a t e s ?7fi y j  Supreme Court  found t h a t the TDR scheme adequately  sated the owners even though many o f the e l i g i b l e  compen-  transferee  l o t s were u n a v a i l a b l e f o r redevelopment because o f l o n g term leases.  I t i s perhaps i r o n i c t h a t a TDR scheme i n v o l v i n g the  allowable  t r a n s f e r o f the t e r m i n a l ' s a i r r i g h t s at.= l e a s t  partially  c o n t r i b u t e d to the f a i l u r e of the owner's challenge  86  because i t was p r o f i t s from the s a l e o f a i r r i g h t s over the r a i l w a y ' s covered t r a c k s i n downtown Manhattan that the  allowed  company to b u i l d such a s p e c t a c u l a r and s i g n i f i c a n t 277  t e r m i n a l b u i l d i n g i n the e a r l y  1900's ''.  The New York TDR system was o r i g i n a l l y  c o n s i d e r e d such  a success t h a t ways to expand i t s use i n t o other areas were explored.  The.;TDR r i g h t was o r i g i n a l l y  l i m i t e d to p r i v a t e  owners o f landmarks but p r o p o s a l s were made to a l l o w the t r a n s f e r o f development r i g h t s from p u b l i c b u i l d i n g s without the  l e a s e arrangement used i n the court house  The c i t y made p l a n s to s e l l  development.  excess a i r r i g h t s above a l l p u b l i c  property except s t r e e t s and parks which possess no development rights.  The p l a n has been s e v e r e l y c r i t i c i s e d by Schnidman 27R  and Roberts  because the vast i n c r e a s e i n a v a i l a b l e  r i g h t s would s e v e r e l y impair t h e i r m a r k e t a b i l i t y .  development  The commen-  t a t o r s a l s o wrote t h a t revenue p r o d u c t i o n alone should not be s u f f i c i e n t to j u s t i f y  the t r a n s f e r o f development r i g h t s .  Other  worthy purposes such^as landmark p r e s e r v a t i o n should be exploited  first.  The New York TDR scheme was not f o o l - p r o o f i n that i t proved to be i n a p p r o p r i a t e i n c e r t a i n circumstances. was proposed that would preserve the brownstone b u i l d i n g s o f Manhattan's Upper East S i d e .  A plan  apartment  The brownstones  were not c o n s i d e r e d landmarks so that d e s i g n a t i o n was not appropriate.  Instead, the p l a n c a l l e d f o r developers to  purchase the brownstones' unused development r i g h t s and apply them to h i g h - r i s e developments on the end of each b l o c k .  The  87  brovmstone  apartmentcbuildings  would have been s a v e d . S i d e r e s i d e n t s who  The  crowded n e i g h b o u r h o o d . o f t h e p l a n was  p l a n was  forcefully  would i n c r e a s e the d e n s i t y  i n the middle of the bitterly  block  f o u g h t by E a s t  a r g u e d t h a t t h e new  development  and u s e o f a m e n i t i e s i n an  It later  t o encourage  already  became o b v i o u s t h a t t h e  purpose  c o n s t r u c t i o n and n o t f o r t h e  preser-  27°)  v a t i o n of the brownstones TDR  scheme w i l l  .  incident implies that  n o t be a c c e p t e d as an a l t e r n a t i v e  T h e r e must be a w o r t h y p u r p o s e m a r k s o r o p e n s p a c e f o r a TDR practically  The  to  a  zoning.  s u c h as p r e s e r v a t i o n o f l a n d scheme t o be p o l i t i c a l l y  and  possible.  A n o t h e r New  Y o r k TDR  failure,  the Tudor C i t y  Parks  transfer, PRO  h a d s u c h a w o r t h y p u r p o s e b u t was I n o r d e r t o s a v e two much n e e d e d p r o h i b i t e d development unused  development  f o u n d t o be l e g a l l y  p r i v a t e parks, the C i t y  on t h e l a n d s s by r e m o v i n g a l l  of  The  Council  their  r i g h t s and a l l o w i n g t h e owner t o s e l l  r i g h t s to developers i n a commercial d i s t r i c t . p a r k was  invalid  those  private  t o be m a i n t a i n e d o u t o f t h e money r e c e i v e d f o r t h e  development  rights.  S i n c e t h e l o t s were l e f t  w i t h no r e a s o n a b l e  u s e f r o m w h i c h t h e owner c o u l d make any p r o f i t , a c t i o n was  tantamount  to reserving private  the  city's  land f o r a  public  purpose w i t h o u t e x p r o p r i a t i o n . The r i g h t t o t r a n s f e r t h e d e v e l o p m e n t r i g h t s was h e l d t o be i n s u f f i c i e n t c o m p e n s a t i o n . The c i t y a r g u e d t h a t t h e v a l u e o f t h e d e v e l o p m e n t r i g h t s i n c r e a s e d because  of t h e i r t r a n s f e r from a r e s i d e n t i a l  to  281 commercial area because  „but t h e C o u r t f o u n d t h e v a l u e was  o f t h e d e p e n d e n c e on t h e a v a i l a b i l i t y  of  uncertain  receiving  88  p a r c e l s and approval o f c o u n c i l  pop  .  The r i g h t s were t o t a l l y  u s e l e s s u n t i l an accommodating t r a n s f e r e e l o t was found.  This  TDR scheme was h e l d to be i n v a l i d by the New York Court o f Appeal.  The United S t a t e s C o n s t i t u t i o n a l p r o t e c t i o n o f property  r i g h t s was i n t e g r a l to t h i s d e c i s i o n but a s i m i l a r r e s u l t i s likely  i n Canada *^.  T h e r e f o r e , commentators *^ p r e d i c t t h a t  2  2  a TDR scheme would be more l i k e l y  to be v a l i d i f the New York  Landmark Ordinance p r o v i s i o n s are f o l l o w e d l e a v i n g a reasonable use o f the p r o p e r t y , a l a r g e amount o f p o t e n t i a l t r a n s f e r l o t s and l i t t l e  room f o r d i s c r e t i o n by m u n i c i p a l a u t h o r i t i e s to  r e j e c t the t r a n s f e r . c) The Chicago  Plan  In the e a r l y  1970*s, P r o f e s s o r Costonis c r i t i c i z e d the  New York Landmark TDR scheme as being too l i m i t e d because o f the adjacent l o t r e s t r i c t i o n and the tendency to create i n t o l e r a b l e congestion on the two l o t s t h a t could destroy the 285 dimensional  s c a l e o f the h e r i t a g e property  .  To compensate  f o r these l i m i t a t i o n s , C o s t o n i s proposed a new TDR p l a n t h a t p r o v i d e d g r e a t e r m a r k e t a b i l i t y of the development r i g h t s and p r o t e c t i o n f o r the h e r i t a g e s t r u c t u r e with the use o f r e s t r i c t i v e covenants.  C o s t o n i s ' s "Chicago  P l a n " was designed  to p r o t e c t  the many examples o f e a r l y skyscrapers b u i l t i n the Loop area of  Chicago. The Chicago  transfer d i s t r i c t  Plan's c h i e f f e a t u r e was the c r e a t i o n o f a .  Instead o f being l i m i t e d to adjoining  l o t s with common ownership, the owner o f a landmark could  89  t r a n s f e r h i s b u i l d i n g ' s unused development r i g h t s to l o t s a l l over the c i t y ' s downtown c o r e .  T h i s covered  the c i t y ' s most  v a l u a b l e land where development r i g h t s were l i k e l y more and be i n demand.  to be worth  The c o n c e n t r a t i o n of low r i s e  marks i n the area would have provided  land-  l i g h t and a i r parks among  pan  the new development  .  By widely  d i s p e r s i n g the t r a n s f e r e e  l o t s , there would have been l e s s chance f o r congestion small area around the landmark.  For an added safeguard  in a against  over-crowding and b u i l d i n g s being w i l d l y out of p r o p o r t i o n to i t s surroundings,  the d e n s i t y i n c r e a s e s on the t r a n s f e r e e  would have been h e l d w i t h i n bulk and h e i g h t c e i l i n g s .  sites  Thus,  the unused development r i g h t s from one landmark could have been separated  and d i s t r i b u t e d among s e v e r a l t r a n s f e r e e l o t s  w i t h i n the t r a n s f e r d i s t r i c t . In r e t u r n f o r the r i g h t to t r a n s f e r the development r i g h t s , the landmark owner was r e q u i r e d to accept property  and g i v e a r e s t r i c t i v e  the landmark's continued  designation of h i s  covenant to the c i t y i n s u r i n g  preservation.  This p r e s e r v a t i o n  r e s t r i c t i o n would have i n c l u d e d r e s t r i c t i o n s a g a i n s t  demolition  and a l t e r a t i o n , maintenance o b l i g a t i o n s , and a d u r a t i o n  clause  by which the owner c o u l d p e t i t i o n c i t y c o u n c i l when the b u i l d i n g 288 f a i l e d to provide The owner who  a reasonable accepted  a r e d u c t i o n i n property encumbrance.  return  these  terms was a l s o e n t i t l e d to  taxes r e f l e c t i n g the p r e s e r v a t i o n  T h i s would have presented  a great i n c e n t i v e  p on  because, a c c o r d i n g to Costonis  , property  taxes were the  l a r g e s t s i n g l e item i n the c o s t of o p e r a t i n g a downtown b u i l d i n g .  90  The reduced tax y i e l d of the landmarks was to be made up by increased  taxes p a i d  by owners of more p r o f i t a b l e  Thus, the burden of h e r i t a g e from the p u b l i c For  was to be taken away  sector.  the owner who r e f u s e d  be g i v e n the o p t i o n rights.  preservation  buildings.  these terms, the c i t y was to  of e x p r o p r i a t i n g  To compensate  h i s unused development  f o r the e x p r o p r i a t i o n ,  a development  r i g h t s bank would have been s e t up to a c t s i m i l a r l y  to a  290  r e v o l v i n g funds scheme  .  Once again, an i n i t i a l  sum from  p u b l i c funds would have been necessary to i n i t i a t e the bank but  that sum would t h e o r e t i c a l l y be recovered when  r i g h t s were r e s o l d to d e v e l o p e r s .  The s t a r t - u p  expropriated  sum could  also  have been obtained from a s a l e of the unused development r i g h t s of a p u b l i c b u i l d i n g .  The danger of s e l l i n g p u b l i c  development r i g h t s has been examined above.  property  The bank would  a l s o have administered the s a l e of r i g h t s v o l u n t a r i l y s o l d or donated by landmark owners to the c i t y . predicted  Costonis o p t i m i s t i c l y  the p r o f i t s o f the r e s a l e of:;the  l a r g e enough not only a l s o to s u b s i d i z e  r i g h t s would be  to cover the bank's o p e r a t i n g  landmark owners who would not have  costs but benefitted  from the r i g h t to s e l l or t r a n s f e r development r i g h t s . subsidy would have been a v a i l a b l e where the h e r i t a g e  A  structure  exhausted s u b s t a n t i a l l y a l l o f the a l l o w a b l e f l o o r area f o r the  s i t e and thus the s a l e of the remaining r i g h t s would not 2°-1  provide enough money to m a i n t a i n or r e s t o r e  the s t r u c t u r e  " .  The Chicago P l a n was never implemented i n the C i t y o f Chicago due to problems with the plan that w i l l be canvassed  91  below  .  However, a s i m i l a r scheme was used  successfully  293 by New York C i t y district  .  To preserve the South S t r e e t Seaport  around the F u l t o n F i s h Market, a p l a n was s e t up  whereby two d i s t r i c t s  were c r e a t e d .  t a i n e d the s t r u c t u r e s the c i t y  The f i r s t  district  wished to p r e s e r v e .  con-  The b u i l d i n g s  were a t t r a c t i v e but too s m a l l to be e c o n o m i c a l l y v i a b l e . second d i s t r i c t  was the surrounding neighbourhood  considered r i p e f o r i n t e n s i v e redevelopment. development bank.  r i g h t s from the f i r s t  that was  The unused  were s h i f t e d to a  These banked r i g h t s could then be t r a n s f e r r e d to de-  v e l o p e r s i n the second d i s t r i c t built. to  district  The  where l a r g e r b u i l d i n g s were  The p r o f i t s from the s a l e o f the r i g h t s were then used  renovate and m a i n t a i n the h i s t o r i c b u i l d i n g s .  The r e s u l t  was a s u c c e s s f u l l y r e h a b i l i t a t e d and economically v i a b l e historic district  w i t h l i t t l e p u b l i c money spent and the  allowable d e n s i t y i n the two areas combined  remaining the  same. d)* Problems with TDR Schemes The success o f the South S t r e e t Seaport TDR p r o j e c t and other plans s i m i l a r to the Chicago P l a n would the  zoning of the t r a n s f e r d i s t r i c t .  be dependent on  To make the development  r i g h t s marketable, the t r a n s f e r d i s t r i c t must be underzoned. T h e r e f o r e , added d e n s i t y to the area from the purchased development r i g h t s would be e a s i l y absorbed without c r e a t i n g congestion. to  By underzoning an area, the developer would be f o r c e d  buy e x t r a d e n s i t y through the development  r i g h t s i n order  92  to  construct  fore,  i n implementing  be f o r c e d  so l o n g  w i t h maximim p r o f i t a b i l i t y .  such a p l a n ,  a city  t o downzone a p r o s p e c t i v e  downzoning  it  a development  i s a perfectly  as e x i s t i n g  is politically  valid  unwise  and  c o u n c i l would  transfer  likely  district.  and n o n - c o m p e n s a b l e  non-conforming  There-  Although  action  uses are allowed to  therefore  unlikely  remain ^ 2  to ever  be  implemented. A problem  w i t h TDR  of each r i g h t . creature  The  incapable  development  rights  TDR  schemes i n g e n e r a l may may  be  of precise will  a rather nebulous, valuation.  be t r a n s f e r r e d  exchange.  Clearly,  v a l u e i s dependent  transferee  l o t . A c c o r d i n g to Delaney  p u r c h a s e d a t a c o n s t a n t market desirable  location,  a subsequent  an e x p e n s i v e , a f f l u e n t c o n s t a n t market a very d e s i r a b l e wasteland.  value.  area,  closely  scrutinized  piece  of r e a l TDR  J  transferred  may  is  to a  less  n e v e r be r e c o u p e d i n  be w o r t h  l o t was  the d i f f e r i n g  fairness  right  from  h i s development  rights  lots  must  the  be  land-  sending p a r c e l s .  should receive from h i s prime  t h a n an owner o f s u b u r b a n  programmes have o n l y  from  potential  i n allowing  restricted  in  t e n times the  a development  t h e owner o f a downtown landmark  estate  of  o f the  e t a l * , i f a TDR  s e n d i n g and r e c e i v i n g  to insure  more f o r t r a n s f e r r i n g  that  s h o u l d be w o r t h more t h a n a TDR  owners a c h i e v e some v a l u e f r o m t h e i r F o r example,  P l a n n e r s assume  i f the t r a n s f e r e e  t h e TDR  suggested that  v a l u e s o f TDRs t o v a r i o u s  floating  on t h e l o c a t i o n  likely  Furthermore,  property  Delaney  But  valuation  on an e q u a l b a s i s  v a l u e and  i t s value w i l l  purchase p r i c e .  be t h e  open  found success i n high  land. density  93  areas.  The r i g h t s t r a n s f e r r e d are more l i k e l y  areas that are already t r a t i o n o f advantages.  highly  to flow to  congested because o f the concen-  Only newer and bigger  o f f i c e and  apartment b u i l d i n g s can absorb the t r a n s f e r r e d r i g h t s and that w i l l n e c e s s a r i l y increase  the density  already  congested.  the p r i c e to the p u b l i c o f  greater  c o n g e s t i o n and s t r a i n on amenities may be too great  to j u s t i f y  a t r a n s f e r of development r i g h t s programme to  preserve h e r i t a g e The  Therefore,  o f areas that are  properties.  value o f a TDR i s a l s o dependent on i t s market.  of the development r i g h t s t r a n s f e r r e d i n New  Y o r k remained  unused f o r many years due to a weak market f o r o f f i c e In Vancouver, c o n s t r u c t i o n  Many  space.  o f the o f f i c e b u i l d i n g to which  C h r i s t Church C a t h e d r a l ' s development r i g h t s were t r a n s f e r r e d was delayed f o r s e v e r a l y e a r s and the agreement f o r the t r a n s f e r had  to be r e v i s e d to make i t more f e a s i b l e f o r the developer.  This shows the u l t i m a t e  f l a w o f any TDR scheme.  The success  of a TDR system w i l l always depend on the market f o r o f f i c e b u i l d i n g space or h i g h d e n s i t y Where the market f o r o f f i c e  r e s i d e n t i a l developments.  space i s s o f t i n a c i t y ,  w i l l not redevelop p r o p e r t i e s  developers  and thus w i l l not need to buy  development r i g h t s from h e r i t a g e  property  owners.  As Richards  296 submitted  , "No mere l o o s e n i n g  administrative Chicago Plan  of the s t r a i g h t - j a c k e t o f  c o n t r o l s i n favour o f an arguably more f l e x i b l e  i s going to remove the market impediment to l a n d -  mark p r e s e r v a t i o n  through TDR."  A programme cannot work unless  a b u i l d e r wants the redevelopment r i g h t s r e g a r d l e s s  of how f a r  94  they may  be t r a n s f e r r e d .  Presumably, one of the reasons why  the Chicago P l a n was never implemented was the f a c t t h a t there was a ten percent vacancy r a t e i n commercial space i n Chicago when the p l a n was proposed.  A comprehensive TDR system w i l l  only work i n p e r i o d s o f tremendous growth and thus has l i m i t e d applicability.  T h i s dependency  on the f l u c t u a t i n g and f r e q u e n t l y  depressed market makes a TDR system u n r e l i a b l e i n p r o t e c t i n g h e r i t a g e p r o p e r t i e s and t h e i r owners.  As R i c h a r d s concludes,  a TDR programme should not be necessary where o t h e r p r e s e r v a t i o n 297  powers are a v a i l a b l e  .  e) A p p l i c a t i o n to B r i t i s h Columbia The above c r i t i c i s m s imply that a TDR  scheme has an  extremely l i m i t e d use, i f any, but the power to implement such a scheme may  be v a l u a b l e f o r m u n i c i p a l i t i e s i n c e r t a i n  cases such as the C h r i s t Church C a t h e d r a l s c e n a r i o .  British  Columbia m u n i c i p a l i t i e s do not appear to have the power to implement a comprehensive t r a n s f e r d i s t r i c t but they can implement a TDR basis.  s t y l e TDR system  scheme on an i n d i v i d u a l j p r o j e c t  In the C i t y o f Vancouver, a t r a n s f e r o f development  r i g h t s would be p o s s i b l e under powers g i v e n the c i t y under pop  s.  565(f)  o f the Vancouver C h a r t e r  .  T h i s s e c t i o n empowers  the c i t y to create zones (known as Comprehensive  Development  D i s t r i c t s ) f o r which there are no s e t r e g u l a t i o n s f o r h e i g h t and d e n s i t y .  A development can only proceed i n such zones i f  the C i t y C o u n c i l and the D i r e c t o r of P l a n n i n g have approved 299  the d e t a i l e d p l a n s f o r the p r o j e c t ^ .  Such a zone c o u l d a l l o w  95  i n c r e a s e d d e n s i t y from a t r a n s f e r of development r i g h t s with c i v i c o f f i c i a l s g i v e n the opportunity and  s i z e of the new  to i n s u r e the  design  p r o j e c t i s compatible with the nearby  h e r i t a g e s t r u c t u r e from which the development r i g h t s were transferred. Other m u n i c i p a l i t i e s i n B r i t i s h Columbia do not have such wide powers.  These m u n i c i p a l i t i e s may  zoning power under s. 963  be l i m i t e d to  of the M u n i c i p a l A c t ^ ^ .  their To t r a n s f e r  development r i g h t s , a m u n i c i p a l i t y would l i k e l y have to a new doing,  zone s p e c i f y i n g a g r e a t e r allowable the  density.  In so  c o u n c i l would be r e q u i r e d to h o l d a p u b l i c  where a l l owners of neighbouring  p r o p e r t i e s and  create  hearing  other i n t e r e s t e d 301  p a r t i e s must be g i v e n the o p p o r t u n i t y  to be heard  O r i g i n a l l y , B r i t i s h Columbia m u n i c i p a l i t i e s other than Vancouver, had  wider powers to implement TDR  p r o j e c t s with the use  of l a n d  302 use  contracts"^  negotiate  .  These c o n t r a c t s allowed  m u n i c i p a l i t i e s to  s p e c i f i c d e t a i l s of a p a r t i c u l a r p r o j e c t without  being r e s t r i c t e d by the e x i s t i n g zoning. were r e p l a c e d i n 1979 t h e i r present  The  by development p e r m i t s .  The  as they must not  vary  permits i n  the permitted  d e n s i t i e s of the l a n d i n the a p p l i c a b l e zoning only p o s s i b l e use  lot.  Although the  s i t i n g of the s t r u c t u r e s on the l a n d .  a developer c o u l d be allowed  .  be a t r a n s f e r  cannot a f f e c t the d e n s i t y on the l o t , i t c o u l d vary  t h i s way,  the  uses or 303  by-law  f o r development permits may  of development r i g h t s w i t h i n one  dimensions and  contracts  s t a t e a f t e r r e c e n t amendments do not provide  same f l e x i b i l i t y  The  l a n d use  permit the In  to c o n s t r u c t a t a l l e r .  96  b u i l d i n g than normally  allowed u s i n g the unused d e n s i t y  h e i g h t of a h e r i t a g e b u i l d i n g on the same l o t . flexibility  i n the a l l o w a b l e d e n s i t y may  The  l a c k of  make the use  development permits i n implementing a TDR  and  of  scheme s e v e r e l y  limited. 4.  Property Tax  Relief  Property tax l i a b i l i t y  on h e r i t a g e property i s an  f a c t o r i n the economic s u r v i v a l and p o t e n t i a l of  the s t r u c t u r e .  I t forms one  items f o r the landowner and  important  rehabilitation  of the l a r g e s t s i n g l e expense  thus, a c c o r d i n g to l i s t o k i n ^ ^ , i t s  extent can e i t h e r be a c a t a l y s t to p r e s e r v a t i o n or, i f g r e a t , a d e t e r r e n t to the b u i l d i n g ' s s u r v i v a l .  Much success has  achieved a c r o s s North America i n encouraging  been  p r e s e r v a t i o n and  p r o t e c t i n g the owner by p r o v i d i n g property tax r e l i e f to h i s t o r i c structures.  T h i s r e l i e f can take many forms but the v a r i o u s  schemes may  be roughly  d i v i d e d i n t o two  categories.  The  pro-  grammes e i t h e r i n v o l v e an exemption or abatement of property taxes or i n v o l v e an adjustment of the p r o p e r t y ' s value f o r t a x a t i o n  assessed  purposes.  B r i t i s h Columbia's H e r i t a g e Conservation Act e x p r e s s l y p r o v i d e s t h a t any  compensation payable  to an owner upon d e s i g 305  n a t i o n may  be made i n the form of tax r e l i e f  .  S i m i l a r pro-  v i s i o n s are contained i n the h e r i t a g e s t a t u t e s of A l b e r t a ^ ^ , Saskatchewan  , and Quebec  are however r e s t r i c t e d provided.  .  B r i t i s h Columbia m u n i c i p a l i t i e s  i n the form i n which t h i s r e l i e f may  be  97  a) Exemption or Abatement  of the Tax  Many h e r i t a g e p r o p e r t i e s may  already be covered  s t a t u t o r y exemptions from property t a x .  by other  These exemptions  t y p i c a l l y have nothing to do with the s i g n i f i c a n c e o f the s t r u c t u r e but are granted because o f the s p e c i a l t r a i t of the owner.  For example,  are exempted  i n B r i t i s h Columbia, church p r o p e r t i e s  e n t i r e l y from t a x a t i o n under s. 398(h) o f the 309  M u n i c i p a l Act  .  T h i s would cover the e i g h t  church-owned  s t r u c t u r e s designated under the C i t y of Vancouver's Heritage By-Law.  Other j u r i s d i c t i o n s exempt p r o p e r t i e s owned by c h a r i -  table i n s t i t u t i o n s .  T h i s exemption i s of great importance where  n o n - p r o f i t p r i v a t e h e r i t a g e foundations own h e r i t a g e b u i l d i n g s . But these exemptions do not apply to p r i v a t e l y owned h e r i t a g e properties. Since property taxes t r a d i t i o n a l l y form the l a r g e s t source of m u n i c i p a l revenues, m u n i c i p a l i t i e s are h e s i t a n t to decrease  those revenues by extending  property owners.  the exemptions to other  But s e v e r a l American j u r i s d i c t i o n s  have  implemented i n n o v a t i o n s t h a t a l l o w some p r i v a t e , p r o f i t - s e e k i n g owners an exemption from or an abatement of th© property t a x . In Connecticut, m u n i c i p a l i t i e s are empowered to pass ordinances  that w i l l reduce the property tax l i a b i l i t y f o r  owners of h e r i t a g e p r o p e r t i e s .  But t h i s abatement  i s only  a v a i l a b l e where the l e v e l of t a x a t i o n m a t e r i a l l y threatens 310 the continued e x i s t e n c e of the s t r u c t u r e  and t h e r e f o r e ,  the measure would not h e l p the t y p i c a l h e r i t a g e property owner. In North C a r o l i n a , m u n i c i p a l i t i e s are empowered to d e f e r  98  fifty  percent of the annual property taxes so long as the  landmark continues to q u a l i f y f o r l i s t i n g under the N a t i o n a l 311 Register  .  The  i s demolished.  d e f e r r e d taxes become payable  i f the  building  T h i s scheme has f a i l e d to encourage p r e s e r -  v a t i o n because i t s penalty p r o v i s i o n s have d e t e r r e d owners 312 from seeking the b e n e f i t  .  The penalty i s very harsh i n  that the taxes must be p a i d with i n t e r e s t at a maximum r a t e of  f o r t y - s i x percent.  Only  an act of God  w i l l excuse a^f-  d e m o l i t i o n from t h i s p e n a l t y . 313 A New  Mexico s t a t u t e  i s designed  to insure t h a t any  money saved from the tax r e l i e f w i l l be used to preserve r e s t o r e the s t r u c t u r e .  A privately-owned  landmark w i l l  or be  exempt from property taxes but only f o r the amount of expenses i n c u r r e d f o r approved p r e s e r v a t i o n s or maintenance of the building.  The  landmark owner i s generously  p r o t e c t e d even  when the c o s t s of a major p r e s e r v a t i o n are great because he may  c a r r y forward  period.  The  t h i s r i g h t to an exemption f o r a  ten-year  s t a t e of Maryland has a s i m i l a r programme  involving  a tax c r e d i t f o r up to ten percent of the c o s t s of r e s t o r + • 314 . ation-^ There are two Canadian examples of s p e c i a l tax exemption powers f o r h i s t o r i c s t r u c t u r e s .  S e c t i o n 33  of Quebec's C u l t u r a l  315 Property Act  J  p r o v i d e s t h a t any  designated property may  be  exempted from up to h a l f of i t s property taxes but the  eligi-  bility  City  i s l i m i t e d to "non-commercial" p r o p e r t i e s .  of Winnipeg r e c e n t l y passed  The  a by-law t h a t w i l l exempt d e s i g 316 nated b u i l d i n g s from t a x a t i o n while r e n o v a t i o n occurs; 317 According to one commentator , the by-law i s expected to  99  provide a major i n c e n t i v e to owners of designated  structures  to r e h a b i l i t a t e t h e i r p r o p e r t i e s making them economically profitable  again.  Under s e c t i o n 400(2)(a) of the M u n i c i p a l Columbia m u n i c i p a l i t i e s are given  Act^ ,  the express power to exempt  " h i s t o r i c a l b u i l d i n g s " from t a x a t i o n  but  the procedure  to implement the exemption makes i t i m p r a c t i c a l . a c t i v a t e the exemption by two a by-law by a two  methods.  t h i r d s majority  be e f f e c t i v e f o r one  year.  but  c o u n c i l would r e q u i r e  M i n i s t e r of M u n i c i p a l of holding"-a  required  Council i t may  may  pass  t h i s exemption w i l l  only  exemption  y e a r l y thus g i v i n g the  owner minimal long-term p r o t e c t i o n . periods,  Firstly,  T h i s would mean, the  would have to be r e c o n s i d e r e d  British  1 8  property  For exemptions of  longer^  approval from both the p r o v i n c i a l  A f f a i r s and  the  electors  319  .  The  p l e b e s c i t e would l i k e l y make t h i s option  expense  impractical.  320 Commentators  have c r i t i c i z e d  because of t h e i r expense. l o s s i n the  The  municipality  tax base f o r a v a r y i n g  municipality exemption may  these exemption programmes  p e r i o d of time.  i s very dependent on property cost too much to  s u f f e r s an  absolute  Since  the  tax schemes, tax  justify.  b) Assessment Adjustments Programmes which have concentrated on the  assessment of  s t r u c t u r e s f o r tax purposes have been more p o p u l a r . to the m u n i c i p a l i t y  i s l e s s apparent and  The  cost  the,; programme should  r e s u l t i n a minimal l o s s from the e x i s t i n g tax assessment methods are a v a i l a b l e to encourage  base.  Two  preservation.  100  The  assessment may be f r o z e n so that added value from r e s t o r -  a t i o n and r e h a b i l i t a t i o n w i l l not be taxed or the assessment may be adjusted to b e t t e r r e f l e c t the r e s t r i c t e d use o f a d e s i nated h e r i t a g e s t r u c t u r e . i ) Frozen Assessments The most s u c c e s s f u l property tax scheme ever for  implemented  h i s t o r i c p r e s e r v a t i o n i n North America i s an Oregon scheme  whereby a p r o p e r t y ' s assessment was f r o z e n f o r a f i f t e e n - y e a r 321 period  .  In order to s u r v i v e f i n a n c i a l l y ,  landmarks w i l l l i k e l y  privately-owned  r e q u i r e e x t e n s i v e renovations and re-?  h a b i l i t a t i o n to compete with more modern neighbours.  These  renovations w i l l add to the value o f the b u i l d i n g and thus, the assessment w i l l be i n c r e a s e d and more property tax w i l l be payable. to  The i n c r e a s e d tax l i a b i l i t y  a c t s as a d e t e r r e n t  r e h a b i l i t a t e and thus adds a f u r t h e r burden to the owner o f  the p r o t e c t e d p r o p e r t y .  The Oregon scheme removed t h i s  d e t e r r e n t by f r e e z i n g the assessment o f an e l i g i b l e before r e n o v a t i o n s are made. its  property  The property was assessed at  true cash value i n the f i r s t year o f a p p r o v a l .  I f any  renovations were made d u r i n g the f i f t e e n - y e a r p e r i o d , these improvements would not be r e f l e c t e d i n the assessment which remains c o n s t a n t . For a property to be e l i g i b l e ,  i t had to have been on the  National Register of H i s t o r i c P r o p e r t i e s . to  The owner a l s o had  agree to maintain h i s b u i l d i n g a c c o r d i n g to e s t a b l i s h e d  standards o f the s t a t e p r e s e r v a t i o n o f f i c e r and open i t to  101  the p u b l i c at l e a s t one  day  a year  l o s e the s p e c i a l assessment i f any breached or i f the property The  property  was  .  The  property  would  of these c o n d i t i o n s were  s o l d to a tax exempt owner^ ^. 2  would then be s u b j e c t to a recapture  of  the  i n c r e a s e d taxes t h a t would have been payable f o r the year of disqualification.  T h i s sum  o f years that the property penalty  was  would be m u l t i p l i e d by the number was  s p e c i a l l y assessed.  This  c l e a r l y onerous enough that i t encouraged  to s a t i s f y the maintenance and f i f t e e n years.  other  c o n d i t i o n s f o r the  Yet because i t d i d not  i n v o l v e the  was  l e s s of a d e t e r r e n t  to property  full  harsh  i n t e r e s t p r o v i s i o n s of the North C a r o l i n a recapture the penalty  applicants  scheme^ ", 24  owners  applying  f o r the s p e c i a l treatment. One  f e a r about the Oregon scheme was  l i m i t the tax base o f m u n i c i p a l i t i e s . assessments, there was  no  decrease i n the  e x i s t i n g tax base so t h a t there was The  But  i t could  severely  by f r e e z i n g the municipality's  no net l o s s i n revenue.  m u n i c i p a l i t y merely f a i l e d to r e a l i z e on improvements that  d i d not p r e v i o u s l y e x i s t .  The  scheme's e f f e c t was  c i t i e s with l a r g e tax bases over which a s m a l l e r assessed value Portland,  c o u l d be spread.  minimal i n  increase  in  For example, i n the C i t y of  a study showed t h a t i f a l l e l i g i b l e p r o p e r t i e s  c e i v e d the s p e c i a l assessment, the c i t y would forego  re-  revenue  "325  on improvements worth 14.5  million dollars  .  To make up  added revenue on these improvements, the maximim i n c r e a s e the tax r a t e would have been f o u r cents per one of assessed v a l u e .  The  the of  thousand d o l l a r s  average homeowner would have p a i d  an  102  e x t r a s e v e n t y - f i v e cents  i n taxes per  year.  In s m a l l e r m u n i c i p a l i t i e s , the e f f e c t could be much greater.  The  town of J a c k s o n v i l l e had  a p a r t i c u l a r l y unique  problem i n t h a t almost a l l of i t s b u i l d i n g s were e i t h e r s i t u a t e d i n a N a t i o n a l R e g i s t e r H i s t o r i c D i s t r i c t or were potentially e l i g i b l e f o r designation.  I f a l l these p r o p e r t i e s  a p p l i e d f o r the s p e c i a l assessment, the remaining n o n - h i s t o r i c property  owners would be burdened by i n c r e a s e d taxes whenever  the m u n i c i p a l i t y r e q u i r e d a d d i t i o n a l funds due  to  inflation. •2  To solve t h i s problem,aa system o f " t r e n d i n g " was A l l s t r u c t u r e s were p h y s i c a l l y r e a s s e s s e d Oregon.  introduced  every s i x years  During the i n t e r i m , a s s e s s o r s would " t r e n d "  p r o p e r t i e s ' values to a l l o w f o r i n f l a t i o n .  The  Of.  in  the  properties  with f r o z e n assessments were o r i g i n a l l y exempted from t h i s t r e n d i n g but to s o l v e the J a c k s o n v i l l e problem, h i s t o r i c properties'©assessments were to i n c r e a s e to r e f l e c t Therefore,  inflation.  the o r i g i n a l assessment would i n c r e a s e due  to  32 i n f l a t i o n but improvements remained untaxed.  Powers suggested  that t h i s t r e n d i n g would a l s o f u r t h e r encourage landmark owners to make improvements.  I t would no l o n g e r be worthwhile to  o b t a i n the f r o z e n assessment without making improvements because the l a n d would be encumbered f o r f i f t e e n years without r e c e i v i n g any  real benefit.  The  t r e n d i n g would allow the muni-  c i p a l i t y ' s tax base to keep up with i n f l a t i o n but any a d d i t i o n a l i n c r e a s e s necessary would have to be borne by the n o n - h i s t o r i c property The  owners. programme was  a tremendous success.  In the  first  103  f o u r years of the ten years i n which assessments c o u l d be f r o z e n , f o r t y percent of a l l e l i g i b l e p r o p e r t i e s were c e r t i fied^  2 8  .  By  1980,  more landmarks i n Oregon had r e c e i v e d  p r o p e r t y tax r e l i e f than i n a l l other American combined  329  .  Powers  330  jurisdictions  a t t r i b u t e d t h i s success to the  fact  t h a t . p r o p e r t y taxes i n Oregon were q u i t e h i g h making the from f r e e z i n g the assessment q u i t e s i g n i f i c a n t to the owner.  The  savings  property  programme allowed g r e a t e r cash flow f o r owners so  t h a t bank loans were more e a s i l y a v a i l a b l e f o r r e h a b i l i t a t i o n costs.  Furthermore, the s t r a i g h t f o r w a r d nature  law enabled  the property  of the Oregon  owner to know what the property  would be f o r a c o n s i d e r a b l e p e r i o d .  The  programme was  tax  also  popular because the property owner had r e l a t i v e l y minor burdens i n order to b e n e f i t .  The  programme only had  a slight  on tax revenues so the e f f e c t on the m u n i c i p a l i t y was  effect minimal.  U n f o r t u n a t e l y , B r i t i s h Columbia m u n i c i p a l i t i e s have i n s u f f i c i e n t powers to implement a f r o z e n assessment programme. In the l a t e  1970's, the C i t y of V i c t o r i a u n s u c c e s s f u l l y  mented a s i m i l a r programme.  imple-  Using the tax r e l i e f s e c t i o n of 331  the Heritage Conservation Act the assessed  , the c i t y attempted to f r e e z e  values o f a l l i t s designated h e r i t a g e  T h i s a c t i o n was  sites.  c h a l l e n g e d by the B r i t i s h Columbia Assessment  A u t h o r i t y which claimed |he by-law i n t e r f e r e d with i t s a s s e s s 332 333 ment powers"^ | Under the Assessment A u t h o r i t y Act , the province c r e a t e d an i n d e p e n d e n t l a u t h o r i t y to provide assessments throughout the p r o v i n c e . no assessment power of t h e i r own  uniform  M u n i c i p a l i t i e s thus have  and are not e n t i t l e d to a d j u s t  104  i n any way the assessments provided by the a u t h o r i t y .  In the  c h a l l e n g e , the Supreme Court o f B r i t i s h Columbia found t h a t the "tax r e l i e f " power i n the HCA d i d not i n c l u d e any power to a l t e r or f i x assessments and thus the assessment a u t h o r i t y ' s power c o u l d not be abrogated.  The c o u r t found  that f r e e z i n g  the assessment would not n e c e s s a r i l y have the e f f e c t o f prov i d i n g tax r e l i e f .  C o u n c i l ' s power under the HCA was l i m i t e d  to reducing the amount o f t a x payable  a f t e r assessment o r by  g l y i n g d i r e c t monetary,compensation through a grant or l o a n . The  c i t y was f o r c e d to abandon the scheme and has s i n c e t r i e d  to provide property tax i n c e n t i v e s through  an i n f o r m a l and l e s s  3*54  comprehensive system o f g r a n t s " ^ . i i ) Assessment on A c t u a l Use Since the use o f a h e r i t a g e property i s r e s t r i c t e d , t h a t r e s t r i c t i o n should be r e f l e c t e d i n the p r o p e r t y ' s assessment. In many cases, the e x i s t i n g s t r u c t u r e w i l l not be the h i g h e s t and. best use o f the p r o p e r t y .  Y e t , the property may be r-  assessed on the b a s i s o f the h i g h e s t and best use even though t h a t use i s impossible due to h e r i t a g e r e s t r i c t i o n s . to L i s t o k i n " ^  According  , t h i s over-assessment can c o n t r i b u t e . t o f i n a n c i a l  pressure t h a t might discourage  the p r o p e r t y ' s owner from  r e h a b i l i t a t i n g o r even m a i n t a i n i n g the s t r u c t u r e .  Some ~  j u r i s d i c t i o n s have implemented formal systems o f assessment i n 336  which h e r i t a g e b u i l d i n g s must be assessed a t t h e i r a c t u a l use  ,  I f the property i s s u s c e p t i b l e to a r e s a l e f o r a d i f f e r e n t purpose t h a t t h r e a t e n s the continued e x i s t e n c e o f the s t r u c t u r e ,  105  337 the adjusted assessment w i l l l i k e l y produce a lower  tax  .  The B r i t i s h Columbia Assessment A u t h o r i t y i n f o r m a l l y c o n s i d e r s h e r i t a g e d e s i g n a t i o n as a f a c t o r i n c a l c u l a t i n g the value of a p r o p e r t y .  Under s. 26(3)  of the Assessment  338 Act , an a s s e s s o r may c o n s i d e r s e v e r a l f a c t o r s i n c l u d i n g economic and f u n c t i o n a l obsolescence. Economic obsolescence 339 has  been d e f i n e d  J  as being caused  by e x t e r n a l f a c t o r s  r e s u l t i n g i n a l a c k of demand f o r a p a r t i c u l a r a r e a . d e f i n e d f u n c t i o n a l obsolescence  Almy  as p e r t a i n i n g to design f e a t u r e s  of a b u i l d i n g t h a t make i t obsolete f o r i t s o r i g i n a l l y purpose.  The Assessment A u t h o r i t y uses these two  e s p e c i a l l y f u n c t i o n a l obsolescence,  intended  factors,  to reduce the assessments  of property encumbered by h e r i t a g e d e s i g n a t i o n .  Because t h i s  i s done i n f o r m a l l y , the e f f e c t on h e r i t a g e p r o p e r t i e s i s i n c o n s i s t e n t but does provide some r e l i e f i n almost  a l l cases  f o r designated h e r i t a g e property owners. The  e a r l i e s t cases heard  by the Board on t h i s  topic  i n v o l v e d the Vancouver Club b u i l d i n g , a designated s t r u c t u r e in a high-rise area^ °. 4  clearly  secondary  The Board c a t e g o r i z e d the s i t e  i n r e l a t i o n to i t s neighbours  as  because the  d e s i g n a t i o n p l a c e d a r e s t r i c t i o n on the development p o t e n t i a l of the s i t e .  The Board reduced  the assessment on the land  by seven percent and allowed an a d d i t i o n a l twelve percent i n obsolescence  and a h a l f  c o s t s f o r the s t r u c t u r e .  In A r t G a l l e r y of Greater V i c t o r i a v. Assessor of Area 0 2 - C a p i t a l ^ ' * , the n o n - p r o f i t o r g a n i z a t i o n t h a t owned the g a l l e r y c h a l l e n g e d the assessment t h a t was  based on the  value  106  of  t h e i r l a n d i f s u b d i v i d e d a c c o r d i n g to the a l l o w a b l e  Since the b u i l d i n g on the s i t e had  been designated as h e r i t a g e  p r o p e r t y , i t c o u l d never be demolished c o u l d never be s u b d i v i d e d .  zoning.  so t h a t the property  T h e r e f o r e , d e s p i t e the  zoning,  the Board found the p r o p e r t y ' s h i g h e s t and best use would always be as an a r t g a l l e r y and thus the l a n d was  valued as one  un-  subdividable l o t . The most d e t a i l e d d e c i s i o n on t h i s a d j u s t e d assessment was  made by the Appeal  Board i n M i t c h e l l Holdings v. Assessor  34.2  of  Area 09-Vancouver  .  The  case i n v o l v e d the Vancouver  Block, a s i x t y year o l d b u i l d i n g designated by the c i t y as a heritage structure.  The  a s s e s s o r had  valued the property  with-  out any r e f e r e n c e to i t s h e r i t a g e r e s t r i c t i o n because the b u i l d i n g was  already developed  to a h i g h e r f l o o r space r a t i o  than allowed by the c u r r e n t zoning.  The  assessor also depreci-  ated the b u i l d i n g l e s s than u s u a l because he assumed the d e s i g n a t i o n would i n s u r e the b u i l d i n g ' s e x i s t e n c e and thus i t s l i f e expectancy.  extend  The Board found t h i s approach i n c o r r e c t  because d e s i g n a t i o n c o u l d not extend  the u t i l i t y  of the  s t r u c t u r e to a l l e v i a t e the p h y s i c a l and f u n c t i o n a l  obsolescence.  Furthermore, s i n c e the l a n d was  by  b u i l d i n g , i t had no u t i l i t y  completely  covered  or income g e n e r a t i o n  the  capability  beyond t h a t d e r i v e d from being the s i t e of the b u i l d i n g . the b u i l d i n g f a i l s utility  to be p r o f i t a b l e , the l a n d no l o n g e r  and there w i l l be no r e t u r n r e c e i v e d on the  of  the b u i l d i n g .  of  a " s i g n i f i c a n t p o r t i o n of the c o n t i n u i n g u t i l i t y "  Once has  investment  The Board l i k e n e d t h i s to an e x p r o p r i a t i o n of the  107  land.  The  l a n d thus l o s e s much of i t s own  neighbouring property may  be made more v a l u a b l e by the i n c r e a s e d  s c a r c i t y of developable l a n d . of  value while a  T h i s makes the l i f e  expectancy  the income e a r n i n g p o t e n t i a l uniform over both l a n d and  improvement.  The Board  i n d i c a t e d t h a t there would remain a  contingent value i n t h a t the b u i l d i n g might someday be  de-  designated or be destroyed by f i r e  the  Board of  or earthquake.  decided t h a t such a contingency  was  But  not a proper component  the a c t u a l present value and thus would not be i n c l u d e d i n  the c u r r e n t assessment.  To i n s u r e t h a t the b u i l d i n g  will  continue to provide a reasonable r a t e of r e t u r n and r e c a p t u r e the investment  made i n i t d u r i n g i t s remaining u s e f u l  life,  u s u a l assessment p r a c t i c e s , such as the s a l e of comparable b u i l d i n g s , had to be s e t a s i d e . b u i l d i n g was  determined  Instead, the value of the  by the present value of an annuity  equal to t h e o c u r r e n t net income f o r the remaining u s e f u l at  a current i n t e r e s t r a t e .  of  approximately  life  T h i s r e s u l t e d i n an assessment  400,000 d o l l a r s l e s s than the 3.5  million  d o l l a r s set by the a s s e s s o r . The Board used S u f f r e d i n e v. Assessor of Area as a precedent  inadequate  4  f o r the use of t h i s income method f o r v a l u i n g  heritage properties. is  21-Nelson^ ^  Comparison with non-heritage p r o p e r t i e s  because they would not be r e s t r i c t e d to t h e i r  e x i s t i n g use.  Comparison with other h e r i t a g e s i t e s would be  impossible because of the v a r y i n g s i z e s of the b u i l d i n g s t h a t they c o n t a i n . b u i l d i n g was  In t h i s case, the assessment of a s m a l l frame  reduced  by approximately  seven percent to r e f l e c t  108  the r e s t r i c t i o n . generous. was  The  In other cases, the Board has been more  assessment of a designated r e s t a u r a n t i n V i c t o r i a  allowed a t h i r t y - f i v e percent r e d u c t i o n i n economic  solescence to r e f l e c t  the r e s t r i c t i o n ^  4 , 4  ".  Not  a l l heritage  p r o p e r t i e s have been g i v e n downward adjustments. r e f u s e d to decrease  The  Board  the assessment of a condominium i n a  designated b u i l d i n g because r e s i d e n t i a l are more l i k e l y  ob-  heritage properties  to be s o l d at r a t e s comparable to o t h e r  non-  h e r i t a g e u n i t s and thus the comparable s a l e s methods should  C l e a r l y , the Board w i l l only make allowances  be  f o r heritage  property when the property has  been f o r m a l l y designated under  the Heritage C o n s e r v a t i o n A c t .  In E s t a t e s Investment L t d . v.  Assessor of Area 09-Vancouver  , the Board, as I have  incorrectly  found  t h a t d e s i g n a t i o n s made under a p r e v i o u s a c t  were no l o n g e r v a l i d . s t r u c t u r e was  suggested,  T h e r e f o r e , the h e r i t a g e value of the  not c o n s i d e r e d as p a r t of the assessment.  the h e r i t a g e r e s t r i c t i o n  i s c r e a t e d by r e s t r i c t i v e  When  covenant  i n s t e a d of d e s i g n a t i o n , i t i s u n l i k e l y t h a t the assessment w i l l be a d j u s t e d .  In T e l f o r d v. A s s e s s o r of Area  H-Surrey-  "54-7 White Rock  , the Board c o n s i d e r e d a l o t encumbered by a  heritage r e s t r i c t i v e  non-  covenant and found the assessment c o u l d  not be a d j u s t e d because the owner h i m s e l f agreed  to reduce  the u s a b i l i t y  case f o l l o w e d  and m a r k e t a b i l i t y of the l o t .  a Manitoba Court of Appeal that the m u n i c i p a l i t y was  decision^  4 8  The  i n which i t was  found  not o b l i g e d to s u b s i d i z e the property  by l o w e r i n g i t s assessment when the taxpayer  c r e a t e d the  109  r e s t r i c t i o n without the m u n i c i p a l i t y ' s a p p r o v a l .  To  otherwise would have encouraged owners to devise schemes that could u n i l a t e r a l l y  lower the  value  decide,  restrictive of the  property.  c) Oonclusion Property  tax r e l i e f i s an e x c e l l e n t method of  compensation and  thus p r o t e c t i o n to the owners of  providing heritage  •54.Q  buildings.  Almy-^  suggested t h a t property  tax r e l i e f  will  work because the group of p o t e n t i a l b e n e f i c i a r i e s i s small i n r e l a t i o n to the number o f taxpayers g e n e r a l l y of an a d d i t i o n a l exemption may  can a f f o r d i t .  cost  be spread t h i n l y among many.  However, such a programme i s only a d v i s a b l e cipality  so t h a t the  where the muni-  I t w i l l not work where a s u b s t a n t i a l  p o r t i o n of the m u n i c i p a l i t y ' s tax base i s already  exempt as i n  u n i v e r s i t y towns, c a p i t a l c i t i e s or where l a r g e areas of Crown land are l o c a t e d .  Washington, D.C.  has  been u n s u c c e s s f u l in.!  s e v e r a l attempts at implementing property  tax r e l i e f f o r  preservation  of government  because of the c o n c e n t r a t i o n  i n the c i t y ^  .  C o u n c i l found i t was  erode the c i t y ' s already tax r e l i e f may there  a l s o not  p o l i t i c a l l y unwise to  s m a l l property  tax base.  work i n s m a l l e r towns and  i s a substantial concentration  properties  Property c i t i e s where  of h i s t o r i c d i s t r i c t s  b u i l d i n g s t h a t would p o t e n t i a l l y r e c e i v e tax abatements. such m u n i c i p a l i t i e s , there  would be l i t t l e  and In  room f o r growth of  the tax base so that non-heritage b u i l d i n g owners would be burdened d i s p r o p o r t i o n a t e l y .  In B r i t i s h Columbia, the C i t y of  Nelson has  but a l a r g e c o n c e n t r a t i o n  a small population  of  110  heritage  structures  J  so t h a t any tax r e l i e f programme f o r the  owners of these s t r u c t u r e s might be too c o s t l y a burden for. the small p o p u l a t i o n  o f non-heritage property  owners.  For a tax r e l i e f system to work, a m u n i c i p a l i t y must make sure that the i n c e n t i v e w i l l have a r e a l d o l l a r impact on preservation. property  The Oregon scheme was s u c c e s s f u l mostly because  taxes were h i g h i n the s t a t e so that any saving was 35 2  significant.  But P r o f e s s o r  Stipe  showed the system would inadequately the tax r a t e was s m a l l .  used an example t h a t p r o t e c t the owner where  I f a c i t y has a tax r a t e o f three  d o l l a r s per one hundred d o l l a r s o f assessed v a l u a t i o n , an owner i s u n l i k e l y to r e p a i r a s l a t e r o o f on h i s V i c t o r i a n mansion when the c o s t s w i l l be 30,000 d o l l a r s and h i s annual tax s a v i n g , if  the assessment i s f r o z e n , w i l l be nine hundred d o l l a r s . In  such areas,  other forms o f i n c e n t i v e s w i l l have to be used.  Property  tax r e l i e f does have advantages over other  forms  353  o f compensation.  According  to Powers  , property  tax r e l i e f  i s more e q u i t a b l e  than income t a x i n c e n t i v e s where the primary  b e n e f i t was only f o r owners with l a r g e enough incomes to make the d e d u c t i o n s .  A property  tax r e l i e f programme would d i r e c t l y  b e n e f i t a l l owners o f h i s t o r i c a l p r o p e r t i e s r e g a r d l e s s o f income.  A property  tax r e l i e f programme such as f r e e z i n g the  assessments may be b e t t e r than a simple grant  o f compensation  because i t a c t s as an i n c e n t i v e to make renovations,and r e p a i r s so that the s t r u c t u r e may be more competitive  and i t s r e s t r i c t i o n s  354-  l e s s o f a burden to the owner  .  The owner only r e c e i v e s the  b e n e f i t i f he has i n f a c t made improvements while with a grant,  111  there  i s not always a guarantee t h a t the money g i v e n w i l l  be  spent.on p r e s e r v a t i o n . A s u c c e s s f u l comprehensive tax r e l i e f  system w i l l  not  be p o s s i b l e i n B r i t i s h Columbia without a change i n the The  c u r r e n t permissive  p a l i t i e s may  tax exemption powers g i v e n to  be adequate to provide  case by case b a s i s . adequate f o r any  But  short-term  the powers are  law.  munici-  r e l i e f on  a  i m p r a c t i c a l and i n -  long-term or comprehensive compensation  scheme. Tax exemption probably  i s too expensive to implement  on  a wide b a s i s so t h a t assessment adjustments are a b e t t e r alternative.  The  c u r r e n t p r a c t i c e o f the Assessment Appeal  Board i n making h e r i t a g e d e s i g n a t i o n a v a l i d c o n s i d e r a t i o n i n assessment does provide  the h e r i t a g e owner valuable  a g a i n s t part; of the burden c r e a t e d by d e s i g n a t i o n .  protection But  to  i n s u r e t h i s f a c t o r i s t r e a t e d c o n s i s t e n t l y by a s s e s s o r s , i t may  be a d v i s a b l e  to e x p r e s s l y  s t a t e i n s. 26 of the Assessment  •5155  Act  t h a t . h e r i t a g e r e s t i c t i o n s must be considered  mining the a c t u a l To provide  i n deter-  value.  s i g n i f i c a n t p r o t e c t i o n f o r the owner  and  i n c e n t i v e s to r e h a b i l i t a t e , tax r e l i e f must come through f r e e z i n g the assessments of a l l designated privately-owned 356 s t r u c t u r e s . The Assessment A u t h o r i t y kvt and the Re Corpor"557 a t i o n of the C i t y of V i c t o r i a - ^ d e c i s i o n make i t impossible f o r a m u n i c i p a l i t y to implement such a scheme. However, an 358 amendment to the Assessment Act for  c r e a t i n g a separate  h e r i t a g e p r o p e r t i e s could provide  class  t h a t improvements made  112  to  the s t r u c t u r e s w i l l not be assessed  time. roll,  f o r a c e r t a i n period of  To i n s u r e there w i l l never be a net l o s s to the tax the h e r i t a g e p r o p e r t i e s ' o r i g i n a l assessment should  s u b j e c t to t r e n d i n g to keep up with i n f l a t i o n .  T h i s would  provide p r o t e c t i o n to the owner while  at l e a s t a  spreading  p o r t i o n of the c o s t o f p r e s e r v a t i o n over a l l other taxpayers 5.  property  i n the m u n i c i p a l i t y .  C o n s i d e r a t i o n o f the Economic P r o t e c t i o n f o r the property  sation.  be  The property  Consequences  of D e s i g n a t i o n  owner need not be by compen-  owner can be p r o t e c t e d by c o n s i d e r a t i o n  of the economic consequences of the d e s i g n a t i o n and by the opportunity  to have the b u i l d i n g de-designated  once the r e -  s t r i c t i o n s make the b u i l d i n g no longer economically T h i s s a f e t y valve i s perhaps i n d i c a t i v e of American ordinances  viable. landmark  while Canadian h e r i t a g e s t a t u t e s r a r e l y i n c l u d e i t .  This i s l i k e l y  because o f the U n i t e d S t a t e s C o n s t i t u t i o n ' s  359 r e c o g n i t i o n of the r i g h t to  property.  S e c t i o n 367A of the C i t y o f S t . John's A c t ^  6 0  provides  that  the C i t y C o u n c i l must c o n s i d e r the " c o s t s and b e n e f i t s of  361 p r e s e r v a t i o n " before  designating a structure  of the s e c t i o n p r o v i d e s owner.  little  .  The wording  p r o t e c t i o n f o r the property  I t i s u n c l e a r i f "the c o s t s of p r e s e r v a t i o n " are the  c o s t s to the owner, to the c i t y , or to both. no r i g h t to have h i s property the property restrictions.  de-designated  The owner has  upon proof  that  cannot remain v i a b l e with the burden of h e r i t a g e The C o u n c i l i s only r e q u i r e d to c o n s i d e r c o s t s .  113  I t i s not r e q u i r e d to make a d e c i s i o n i n a c e r t a i n way proof of economic hardship be presented. little  p r o t e c t i o n to requirements  The  should  s e c t i o n adds  i n other p r o v i n c e s t h a t  a l l o w an owner to o b j e c t to a d e s i g n a t i o n and have a p u b l i c hearingvwhere he may  present p r o o f of the economic e f f e c t  him expected  by the designation"^  American ordinances  provide much more comprehensive  c l e a r p r o t e c t i o n f o r a property owner who financially  on  p  •2 C  because of a d e s i g n a t i o n .  i s unable  The New  and  to s u r v i v e  York C i t y l a n d -  363 mark Ordinance  j p r o v i d e s the most d e t a i l e d p r o t e c t i o n and  been the s u b j e c t of a great d e a l of l i t i g a t i o n .  The  has  ordinance  allows an owner of a designated property to apply f o r a c e r t i f i c a t e of a p p r o p r i a t e n e s s from the landmark commission that would permit him  to demolish  of " i n s u f f i c i e n t r e t u r n " ^ " . 4  the s t r u c t u r e on. the ground  The  owner i s e n t i t l e d to t h i s  c e r t i f i c a t e i f he can e s t a b l i s h the property i s not capable e a r n i n g a reasonable  return.  I f he wants to demolish  of  the  s t r u c t u r e , he must a l s o show t h a t he seeks the c e r t i f i c a t e i n good f a i t h so t h a t he may facility  with reasonable  c o n s t r u c t a new promptness.  income-producing  Or he mustishow t h a t he  r e q u i r e s the c e r t i f i c a t e f o r the purpose of t e r m i n a t i n g the e x i s t i n g o p e r a t i o n at a l o s s .  The  same proof i s necessary i f  the owner wants to make a l t e r a t i o n s which would destroy  the  i n t e g r i t y o f the designated . s t r u c t u r e . I f such p r o o f i s presented,  the landmark commission i s  o b l i g e d to make a p r e l i m i n a r y f i n d i n g of i n s u f f i c i e n t r e t u r n . The  commission may  then devise a p l a n whereby the s t r u c t u r e would  114  be preserved  and made capable of a reasonable r e t u r n .  This  p l a n could i n c l u d e a p a r t i a l or complete tax exemption or a u t h o r i z a t i o n of a l t e r a t i o n s . the c i t y c o u n c i l may  I f the  owner r e j e c t s t h i s  plan,  condemn or purchase the s t r u c t u r e or  a purchaser sympathetic to p r e s e r v a t i o n . must grant  the  the c e r t i f i c a t e ,  I f not,  de-designate the  the  find  city  structure  and  a l l o w the proposed work to proceed promptly. Obviously,  an important i s s u e i n v o l v e d i n t h i s process  i s what c o n s t i t u t e s a reasonable r e t u r n . d e f i n e s reasonable r e t u r n as being  The  New  " s i x percent  York ordinance  on the  current  365  assessed v a l u a t i o n e s t a b l i s h e d by the c i t y . " purposes of t h i s t h e s i s , s i x percent reasonable to provide Professor  Costonis  w i l l be assumed to  questioned the use .  be  owner.  He  argued t h a t a f i x e d  work where a rent c o n t r o l scheme imposed a  t h a t reasonable r e t u r n should and not  be  of a f i x e d amount as  reasonable r a t e of r e t u r n on a b u i l d i n g .  only  the  s u f f i c i e n t income f o r the property  i n d i c a t i o n of reasonable r e t u r n ^ amount would only  For  Instead,  act as a standard  as a measure of value.  I t should  subject to p r e c i s e c a l c u l a t i o n but  should  be  he  submitted  of f a i r n e s s therefore  not  determined  by the "community's v a l u e s " .  T h i s p r o p o s i t i o n appears to  vagueness to the process but,  i n p r a c t i c e , the  had  little  trouble  figure i s given.  add  j u d i c i a r y has  i s o l a t i n g reasonable r e t u r n where no  precise •2(1 rj  In f a c t , the Supreme Court i n Penn C e n t r a l  never addressed whether or not  Grand C e n t r a l Terminal was  r e t u r n i n g s i x percent  The  yearly.  j e c t i v e means t h a t there  was  indeed  Court found by more sub-  a reasonable r e t u r n .  115  The Washington, D.C.  Landmark Ordinance  allows  d e s i g n a t i o n where the r e s t r i c t i o n s have r e s u l t e d i n economic hardship to the owner." the ordinance.  The  de-  "unreasonable  term i s not d e f i n e d by  In 900 G. S t r e e t A s s o c i a t e s v. Department of  369 Housing and Community Development  , the D i s t r i c t of Columbia  Court of Appeal, r e s o r t i n g to American zoning d e f i n e d unreasonable reasonable  principles,  economic h a r d s h i p as being where no  economic use f o r the property remained.  case, the owner wanted to demolish redevelop the p r o p e r t y .  In t h i s  the designated b u i l d i n g  But because the b u i l d i n g c o u l d be  r e n t e d out i n i t s present s t a t e and feeturn a p r o f i t , much l e s s than what the new use was  available.  The  although  development would y i e l d , an economic  r e s t r i c t i o n o f a h i g h e r and b e t t e r use  d i d not c o n s t i t u t e an unreasonable The Washington ordinance submitted  and  economic h a r d s h i p .  specifically  as proof of unreasonable  l i s t s what must be "570  economic hardship-^  .  The  owner must submit the date of purchase and the amount p a i d , the assessed value, the taxes, a l l a p p r a i s a l s obtained years of a p p l i c a t i o n , the a s k i n g p r i c e and any where the property has  within^two  offers received  been l i s t e d f o r s a l e , the annual  income and o p e r a t i n g expenses and any  gross  c o n s i d e r a t i o n the owner  has made as to p r o f i t a b l e adaptive uses f o r the p r o p e r t y . C l e a r l y , from a l l these submissions,  a c o u r t should be able to 371  determine the p r o f i t a b i l i t y o f a s t r u c t u r e . the Court would only c o n s i d e r t h i s l i s t  of f a c t o r s .  to c o n s i d e r o t h e r t h i n g s such as expected development on the p r o p e r t y .  In 900 G. S t r e e t It refused  p r o f i t s from a  new  ,  116  In New  York where the ordinance does not l i s t  any  necessary  submissions, the c o u r t s have found much more s t r i n g e n t ments f o r p r o v i n g economic h a r d s h i p .  There must be  require-  substantial  evidence of h a r d s h i p to support a f i n d i n g of i n s u f f i c i e n t •xno  return-^  .  The  Court of Appeal d e c i s i o n i n Penn C e n t r a l  w e l l beyond the c r i t e r i a f o l l o w e d by the D i s t r i c t  of  "57"5  went  Columbia  "574court i n 900 G-. S t r e e t ^  .  Mr.  J u s t i c e B r e i t e l c o n s i d e r e d the  f i n a n c i a l e f f e c t of Grand C e n t r a l Terminal on the surrounding p r o p e r t i e s owned by the same person.  The  justice also held  that any p u b l i c i n c e n t i v e s granted to the Terminal i n the past should a l s o be c o n s i d e r e d i n determining a reasonable The  return.  court f u r t h e r h e l d t h a t i f the owner mismanaged h i s  property or f a i l e d to use h i s best e f f o r t s to o b t a i n a reasonable r e t u r n , he was not e n t i t l e d to c l a i m an unreasonable hardship.  Such s t r i n g e n t requirements may  economic  make i t impossible  f o r an owner to ever prove an economic h a r d s h i p from d e s i g n a t i o n and thus, the p r o p e r t y owner i s g i v e n . ' l i t t l e The  approach  of the Washington, D.C.  protection.  court and ordinance pro-  vide a much more d e f i n i t e and u s e f u l means f o r the owner to have the h e r i t a g e burden a l l e v i a t e d or removed where economic h a r d s h i p has  resulted.  Most of the r a r e instancesswhere economic h a r d s h i p e x i s t s under the New  c o u r t s have found  that  York ordinance have  been cases i n v o l v i n g churches or c h a r i t a b l e o r g a n i z a t i o n s . The measure of reasonable r e t u r n i s a l i e n to n o n - p r o f i t o r g a n i z a t i o n s and thus they are not covered by the economic s a f e t y v a l v e .  ordinance's  In T r u s t e e s of S a i l o r ' s Snug  Harbor  117  v. P l a t l r  , i t was h e l d t h a t a c h a r i t a b l e o r g a n i z a t i o n must  prove t h a t p r e s e r v a t i o n o f the b u i l d i n g would s e r i o u s l y i n t e r f e r e with the present use o f the b u i l d i n g and t h a t to a u s e f u l purpose would be impossible costs.  The New York Court  without  conversion  excessive  o f Appeal found such a s i t u a t i o n i n  Lutheran Church i n America v. New York C i t y ~ ^ .  An o f f i c e  b u i l d i n g owned by the church had been designated  under the  c i t y ' s landmark ordinance.  The church proved t h a t the b u i l d i n g ' s  s t r u c t u r e was so inadequate f o r i t s purposes t h a t the enforcement' of the landmark r e s t r i c t i o n would r e s u l t i n the end o f i t s charitable a c t i v i t i e s . designate  The Court  thus f o r c e d the c i t y to de-  the s t r u c t u r e a l l o w i n g the church to b u i l d a l a r g e r  b u i l d i n g on the s i t e .  T h i s i s s u e i s o f importance to Vancouver  where e i g h t o f the f i f t y - s e v e n s t r u c t u r e s designated Heritage The  under the  By-Law are owned by church o r g a n i z a t i o n s . economic s a f e t y valve could only be adapted f o r use  by B r i t i s h Columbia m u n i c i p a l i t i e s with c o n s i d e r a b l e  amendments  A p r o v i s i o n s i m i l a r to s. 20 o f the Saskatchewan;";  to the s t a t u t e .  377  Heritage Property  Act^'  Columbia by s t a t u t e .  c o u l d be i n c o r p o r a t e d i n B r i t i s h  T h i s p r o v i s i o n allows an owner to apply  to c o u n c i l ; t o have a d e s i g n a t i o n by-law r e p e a l e d s i x months a f t e r i t i s passed.  S i x months should a l l o w a  reasonable  p e r i o d to assess the economic e f f e c t o f the d e s i g n a t i o n on the p r o p e r t y .  Like the Saskatchewan p r o v i s i o n s , the owner  should be allowed months.  to r e - a p p l y  I f the property  leaves h i s property  f o r de-designation  every  twelve  owner could prove the d e s i g n a t i o n  without  any reasonable  economic use,  118  c o u n c i l would have three a l t e r n a t i v e s . purchase or e x p r o p r i a t e the p r o p e r t y .  The  m u n i c i p a l i t y could  I t could devise a p l a n  through which other p r o t e c t i v e measures could make the structure viable. The  HOA  existing  Or i t could r e p e a l the d e s i g n a t i n g by-law.  does not e x p r e s s l y give the power to de-designate  s t r u c t u r e but by s. 2 7 ( 4 ) of the I n t e r p r e t a t i o n A c t - ^ ,  a muni-  8  c i p a l i t i e s already have the power to r e p e a l or amend any i t makes.  This would i n c l u d e a by-law o r i g i n a l l y  structure.  6.  designating a  T h i s s a f e t y v a l v e , i f p r o p e r l y aimplemented,! could  provide e x c e l l e n t p r o t e c t i o n f o r the property truly  by-law  owner when he i s  burdened e x c e s s i v e l y by a d e s i g n a t i o n .  Income Tax  Incentives  In the United S t a t e s , tremendous success has i n r e h a b i l i t a t i o n of h e r i t a g e property  been  achieved  through i n c e n t i v e s  built  •57Q  i n t o the I n t e r n a l Revenue Code t h a t h i s t o r i c p r e s e r v a t i o n was was  .  A u t h o r i t i e s determined  an important  l a r g e l y dependent on the use  n a t i o n a l goal t h a t  of p r i v a t e funds.  a t i o n s were known to have an important  consider-  bearing on whether the  p r i v a t e i n t e r e s t s were w i l l i n g to maintain  and  rehabilitate'  h i s t o r i c s t r u c t u r e s or allow them to d e t e r i o r a t e estimate  Tax  .  Experts  t h a t the i n c e n t i v e s have l e d to between f i v e hundred  m i l l i o n and  two  b i l l i o n d o l l a r s of p r i v a t e money being used f o r  r e h a b i l i t a t i o n of landmarks.  The  s i z e s of the p r o j e c t s v a r i e d  from r e s t o r i n g a s m a l l house worth 30,000 d o l l a r s to the  twenty-  f i v e m i l l i o n d o l l a r r e s t o r a t i o n of the a r t deco C h r y s l e r B u i l d i n g i n New was  York C i t y .  Oldham estimated  only twenty-five  t h a t the l o s s to the  m i l l i o n d o l l a r s f o r the f i r s t  Treasury  twelve hundred  119  a p p l i c a t i o n s worth f i v e hundred m i l l i o n d o l l a r s i n 's Q  Con-  -1  struction^ The  C a n a d i a n income t a x s y s t e m p r o v i d e s no  c e n t i v e s t o owners o f h e r i t a g e p r o p e r t i e s .  special i n -  I n many c a s e s ,  the  382  Income Tax  Act^  a c t s as a d i s i n c e n t i v e t o p r e s e r v e .  d o u b t f u l t h a t the Act w i l l i n c e n t i v e s because the  s o o n be  changed to a l l o w  It is  greater  c u r r e n t f i n a n c e m i n i s t e r i s on  record  383  as  being  property and  opposed^  .  is primarily a provincial  Civil Rights"^  little  Furthermore, the p r e s e r v a t i o n of  8 4  and  thus,  heritage  j u r i s d i c t i o n under  "Property  the f e d e r a l government  has  i n c e n t i v e t o amend i t s income t a x p r o v i s i o n s f o r . t h i s  purpose!  Perhaps the  great  success  of the American i n c e n t i v e s  t h a t b o o s t e d t h e economy as w e l l as p r e s e r v a t i o n e f f o r t s  may  l e a d t o a change i n t h e  combin-  f e d e r a l government's p o l i c y .  a t i o n w i t h o t h e r p r e s e r v a t i o n and Income Tax for  t h a t w o u l d no  longer  The  ductibility  of the  contribution.  to  our  system.  possibly unprofitable  income p r o d u c i n g  a burden to the be  commodities  owner. classified  d i s i n c e n t i v e s to demolish  value  of r e s t r i c t i v e  ' I . w i l l examine the  a r e a s and  incentive  into  i n c e n t i v e s d e a l w i t h the d e d u c t i b i l i t y  c o s t s of r e n o v a t i o n ,  three  be  viable,  U n i t e d S t a t e s i n c e n t i v e s can  categories.  a valuable  t h e i r p r o t e c t e d and  s t r u c t u r e s t u r n i n g them i n t o  The  c o m p e n s a t i o n programmes,  A c t amendments c o u l d p r o v i d e  owners t o r e n o v a t e  In  and  the  three of  the  de-  c o v e n a n t s as a c h a r i t a b l e  c u r r e n t Canadian law  w h e t h e r t h e A m e r i c a n amendments a r e  in  these  adaptable  120 a) The D e d u c t i b i l i t y o f Renovation  Posts  In g e n e r a l , the owner o f a h e r i t a g e property to deduct any expenses i n c u r r e d i n e a r n i n g property.  Since r e n o v a t i o n s  i s entitled  income from t h a t  and p r e s e r v a t i o n c o s t s are pre-  sumably i n c u r r e d to improve the s t r u c t u r e i n order to i n c r e a s e income from the p r o p e r t y , deductible. any  they should  logically  be f u l l y  But s e c t i o n 18(1)(b) o f the Income Tax Act d i s a l l o w s  deduction  for:  an o u t l a y , l o s s or replacement o f c a p i t a l , a payment on. account o f c a p i t a l or an allowance i n r e s p e c t o f d e p r e c i a t i o n , obsolescence o r d e p l e t i o n except as e x p r e s s l y permitted by t h i s Part.385 An expense d i s a l l o w e d  by the s e c t i o n cannot be deducted from  current expenses but are i n s t e a d added to the c a p i t a l the p r o p e r t y .  The only r e l e v a n t deduction  expressly  cost.of allowed  from t h i s c a p i t a l account i s d e p r e c i a t i o n r e f e r r e d to by the Act as the c a p i t a l c o s t allowance  .  maximum amount o f d e p r e c i a t i o n allowed  F o r a b u i l d i n g , the to be deducted i n one 3 D  year i s f i v e percent or t e n percent  o f the undepreciated  o f the p r o p e r t y ^  i f the b u i l d i n g i s o f frame c o n s t r u c t i o n ^  C l e a r l y , the a b i l i t y  ... J  to deduct the e n t i r e amount o f the expense  i n one year, o r even over a few years over deducting  value  only f i v e percent  i s g r e a t l y advantageous  o f the expense as a c a p i t a l  outlay. Whether a r e n o v a t i o n  expense i s a c u r r e n t expense o r a  c a p i t a l outlay i s f r e q u e n t l y debated by the tax a u t h o r i t i e s and  courts.  the A c t .  Some c o s t s are s p e c i f i c a l l y  deemed c a p i t a l under  " S o f t c o s t s " such as i n t e r e s t on loans and l e g a l  121  expenses i n c u r r e d d u r i n g c o n s t r u c t i o n o r r e n o v a t i o n  of a  b u i l d i n g are s p e c i f i c a l l y deemed to be c a p i t a l expenses and added to the c a p i t a l c o s t o f l a n d or the building-^  .  Other  expenses have been d e a l t with by the c o u r t s . In B r i t i s h I n s u l a t e d & Helsby Gable L t d . v. At*ierton^ the House o f Lords formulated  ,  the t e s t as f o l l o w s :  When an expenditure i s made, not only once and f o r a l l but with a view to b r i n g i n t o e x i s t e n c e an a s s e t or an . advantage f o r the enduring b e n e f i t o f a trade, I t h i n k that there i s very good reason . . . f o r t r e a t i n g such an expenditure as p r o p e r l y a t t r i b u t a b l e not to revenue but to c a p i t a l . Canadian c o u r t s have n o t always found t h a t the c o s t s o f r e p a i r s and  renovations  are expenses made with a view to c r e a t i n g a  lasting benefit.  Ordinary  r e p a i r c o s t s have been accepted as 391  a v a l i d l y d e d u c t i b l e c u r r e n t expense are merely to preserve  the u s e f u l n e s s  .  So long as the r e p a i r s  o f the b u i l d i n g , they are  c u r r e n t expenses.  But i f they m a t e r i a l l y i n c r e a s e the value o f 392 the b u i l d i n g or i t s u s e f u l l i f e , they are c a p i t a l o u t l a y s . The replacement o f worn components such as f l o o r s or w a l l s 393 394 would be a c u r r e n t c o s t ^ even i f i t i s a s u b s t a n t i a l p r o j e c t < But  i f the p a r t i s a separate  p a r t i n i t s e l f i n s t e a d of an  i n t e g r a l p a r t o f the l a r g e r s t r u c t u r e , i t s replacement i s a capital outlay. principle^^.  New h e a t i n g u n i t s would be covered by t h i s S i m i l a r l y , i f the replacement p a r t i s l a r g e r or 396  adds g r e a t e r e f f i c i e n c y , i t w i l l be a c a p i t a l outlay 397 r e c e n t case, Shabro Investments  J  . A  h e l d t h a t r e p a i r s are not  d i s q u a l i f i e d as c u r r e n t expenses merely because they are c a r r i e d out i n l i g h t o f technology not known when the s t r u c t u r e was o r i g i n a l l y  built.  122  With a h e r i t a g e s t r u c t u r e , i t i s l i k e l y  t h a t any r e p a i r s  w i l l be major i n t h a t they would be designed to r e h a b i l i t a t e the s t r u c t u r e and make i t v i a b l e e c o n o m i c a l l y . the costs o f these r e n o v a t i o n s  are l i k e l y  Therefore,  to be considered  c a p i t a l o u t l a y s and thus t h e i r d e d u c t i b i l i t y w i l l be s e v e r e l y limited.  Despite  •2QQ  the L e v i n t e r d e c i s i o n ^  major r e p a i r s to be c a p i t a l .  , courts usually  find  In Graham v. The M i n i s t e r o f  •zqq  N a t i o n a l Revenue  , the c o s t s o f r e h a b i l i t a t i n g a condemned  apartment b u i l d i n g i n t o an o f f i c e  b u i l d i n g were h e l d to be a  c a p i t a l outlay because the work s i g n i f i c a n t l y value  o f the s t r u c t u r e .  Most h e r i t a g e property  would be t r e a t e d s i m i l a r l y . National R e v e n u e  t  added to the restorations  In NoI 709 v. The M i n i s t e r o f  the Tax Appeal Board d e a l t with the cost  of improving the h e a t i n g  system and i n s t a l l i n g a i r c o n d i t i o n i n g .  These are two p r o j e c t s probable i n any h e r i t a g e r e s t o r a t i o n . Even though much o f the work was undertaken to comply  with  new L i q u o r Board and Hydro Commission r e g u l a t i o n s , the c o s t s were c a p i t a l The  outlays.  Americans have changed t h e i r tax code to p r o v i d e  g r e a t e r deductions f o r r e n o v a t i o n s ownership and r e n o v a t i o n States, renovation Firstly, allowed  and thus the code encourages  of heritage p r o p e r t i e s .  I n the United  c o s t s were d e a l t with i n three ways.  s e c t i o n 191 o f the I n t e r n a l Revenue Code  r e h a b i l i t a t i o n c o s t s to be amortized  instead of regular depreciation.  over f i v e  This i s c l e a r l y  superior  to the Canadian system where such c o s t s may never be deducted even a f t e r twenty y e a r s .  years  completely  The i n c e n t i v e was to cover  123  expensives f o r r e n o v a t i o n s and make i t competitive  t h a t would modernize the s t r u c t u r e  with newer b u i l d i n g s ^ . 4  2  These reno-  v a t i o n s i n c l u d e d modern plumbing, e l e c t r i c a l w i r i n g and f i x t u r e s , heating,  a i r c o n d i t i o n i n g , e l e v a t o r s , e s c a l a t o r s and other  improvements r e q u i r e d  by b u i l d i n g codes.  Furniture,  carpeting,  drapes and o f f i c e i e q u i p m e n t  were not i n c l u d e d .  new a d d i t i o n s , p a r k i n g g l o t s  and surrounding e n t i t i e s were a l s o  excluded. ation.  The expenses were only d e d u c t i b l e  On allowable  renovation  The cost o f  as normal d e p r e c i -  expenses, there  was no monetary  limit. The  programme's p o p u l a r i t y meant t h a t care had to be taken  to insure t h a t only owners o f s i g n i f i c a n t s t r u c t u r e s were e l i g i b l e f o r the i n c e n t i v e s .  To be e l i g i b l e , a b u i l d i n g must  have been l i s t e d i n the N a t i o n a l R e g i s t e r or be l o c a t e d i n a registered historic d i s t r i c t o f the I n t e r i o r " ^ . 4  designating  t h a t was c e r t i f i e d by the Secretary  A h i s t o r i c d i s t r i c t was c e r t i f i e d  s t a t u t e contained  c r i t e r i a that would " s u b s t a n t i a l l y  achieve the purpose o f p r e s e r v i n g of h i s t o r i c s i g n i f i c a n c e . "  i f its  and r e h a b i l i t a t i n g  buildings  The s t a t u t e a l s o had to s u b s t a n t i a l l y  meet the requirements f o r N a t i o n a l R e g i s t e r d e s i g n a t i o n . N a t i o n a l R e g i s t e r was c r e a t e d Preservation  by the 1 9 6 6 N a t i o n a l H i s t o r i c  Act "^ " to designate 4  4  historically  s i g n i f i c a n t , privately-owned s t r u c t u r e s . " s i g n i f i c a n t " i s very on i n c l u s i o n ^ . 4  listing  general  The  and a r c h i t e c t u r a l l y  The d e f i n i t i o n o f  and leads to a s u b j e c t i v e  The only p r o t e c t i o n a property  r e c e i v e s from  i s a review p r o c e s s f o r a l l f e d e r a l l y - f u n d e d  that could a f f e c t the p r o p e r t y .  decision  undertakings  124  The  tax r e l i e f was a v a i l a b l e only where the r e h a b i l i t a t i o n  was c e r t i f i e d by the S e c r e t a r y o f the I n t e r i o r as being c o n s i s t e n t with the h i s t o r i c The  c h a r a c t e r o f the p r o p e r t y ^ . 4 0  b u i l d i n g s had to be income producing as r e n t a l  o f f i c e b u i l d i n g s or h o t e l s " . 4  0 7  A long-term  housing,  l e s s e e , as w e l l as  the owner,could c l a i m the d e d u c t i o n . In l i e u o f t h i s scheme, a landmark owner c o u l d have taken accelerated depreciation of a l l r e h a b i l i t a t i o n c o s t s Eligibility  was the same as i n s e c t i o n 191.  4 0 8  .  Without a c c e l e r a t e d  d e p r e c i a t i o n , the owner would be f o r c e d to d e p r e c i a t e on a much longer, s t r a i g h t - l i n e b a s i s . These two programmes were r e p l a c e d i n 1981 by the Economic Recovery Tax A c t for  4 0  ^ which p r o v i d e d an investment  r e h a b i l i t a t i o n expenditures.  tax c r e d i t  Under the programme, up to  twenty-five percent o f the amount o f the investment c r e d i t e d a g a i n s t income tax payable. much g r e a t e r b e n e f i t f o r the owner.  c o u l d be  T h i s tax c r e d i t  provided  A c c o r d i n g to Dworsky  ,  a d o l l a r of tax c r e d i t j w a s a d o l l a r o f taxes saved while the value o f a d o l l a r o f d e p r e c i a t i o n depended on the tax bracket of  the owner and the e f f e c t o f r e c a p t u r e .  of  d e p r e c i a t i o n deduction saved the owner only seventy  The two.  eligibility  At best, a d o l l a r  f o r t h i s programme was broader  cents.  than the p r e v i o u s  A " Q u a l i f i e d R e h a b i l i t a t e d B u i l d i n g " had to be one i n  which at l e a s t s e v e n t y - f i v e percent o f the e x i s t i n g w a l l s was r e t a i n e d i n the r e h a b i l i t a t i o n p r o c e s s .  exterior The b u i l d i n g  had to be i n s e r v i c e before the beginning o f the r e h a b i l i t a t i o n . There was no requirement  t h a t the b u i l d i n g be e l i g i b l e f o r  125  i n c l u s i o n i n the N a t i o n a l R e g i s t e r or to have been l o c a l l y designated.  But designated h i s t o r i c p r o p e r t i e s were e l i g i b l e  f o r an a d d i t i o n a l f i v e percent i n tax c r e d i t s " . 4 1  requirement f o r other b u i l d i n g s was  The  only  age  t h a t at l e a s t twenty years  must have elapsed s i n c e c o n s t r u c t i o n of the b u i l d i n g s or the last rehabilitation. were excluded.  Non-historic r e s i d e n t i a l rental properties  E l i g i b l e r e h a b i l i t a t i o n expenses were any  amounts p r o p e r l y chargeable property.  to the c a p i t a l account f o r the  S p e c i f i c e x c l u s i o n s were c o s t s of a c q u i s i t i o n o f  the s t r u c t u r e , e n l a r g i n g the s t r u c t u r e and any f o r which the s. 191  renovations  expense a m o r t i z a t i o n p r o v i s i o n s had  been  4.12 taken^"  .  To i n s u r e the i n t e g r i t y  of a h e r i t a g e property  not destroyed by the r e h a b i l i t a t i o n , the r e n o v a t i o n s had  was to  be c e r t i f i e d as a p p r o p r i a t e f o r any h i s t o r i c s t r u c t u r e u s i n g 4-1 *5 the same d e f i n i t i o n used i n s. 191  .  b) Treatment of D e m o l i t i o n According to D e n h e z ^ , the Canadian t a x a t i o n system!s^ 4  treatment of d e m o l i t i o n may preservation.  4  a c t u a l l y provide a d i s i n c e n t i v e f o r  To understand t h i s d i s i n c e n t i v e , the concept of  recapture must f i r s t  be e x p l a i n e d .  When an owner of property  o v e r - d e p r e c i a t e s h i s p r o p e r t y , the proceeds of a s a l e of t h a t property are a p p l i e d a g a i n s t the u n d e p r e c i a t e d c a p i t a l c o s t 4.15 and the r e s u l t i s a n e g a t i v e f i g u r e  .  If this  negative  f i g u r e e x i s t s at the end of the t a x a t i o n year, the amount by which the property was  o v e r - d e p r e c i a t e d w i l l be " r e c a p t u r e d " 4-16 and c o n s i d e r e d as income f o r the year . C l e a r l y , a taxpayer  126  wants to a v o i d t h i s e x t r a taxable income and thus w i l l being.put  i n a recapture s i t u a t i o n .  Recapture can only  4.17 i f there has been some d i s p o s i t i o n of the a s s e t ^ . one method i n which r e c a p t u r e may  avoid occur  Therefore,  be avoided with a b u i l d i n g i s 418  to  simply destroy the s t r u c t u r e .  A c c o r d i n g to Denhez  , demo-  l i t i o n i s not c o n s i d e r e d a d i s p o s i t i o n under the Act and f o r e , no recapture w i l l depreciated.  be d e t e c t e d where the o-wner has  The Revenue Department d i s a g r e e s as one 419  interpretation bulletins  thereover-  of i t s  i n d i c a t e s that a d i s p o s i t i o n  occurs  even where a c a p i t a l property i s destroyed and there i s no e n t i t l e m e n t to compensation.  Even i f there i s a d i s p o s i t i o n ,  recapture w i l l be avoided because the "proceeds of the position" will  be c o n s i d e r e d n i l  4  2  0  .  Since the  the  dis-  undepreciated  c a p i t a l c o s t of the property can never be l e s s than zero, there will  be no r e c a p t u r e d e t e c t a b l e and thus no income.  In f a c t , i f  the taxpayer/owner has no other d e p r e c i a b l e property of the same 421 class^"  , he w i l l  the undepreciated  be able to w r i t e o f f any  remaining  c a p i t a l c o s t as a t e r m i n a l l o s s .  amount of the t e r m i n a l l o s s may  be deducted  amount of The  entire  from other property  and business income as a c u r r e n t e x p e n s e ^ . 4  2  S e v e r a l cases have h e l d t h a t where o l d e r b u i l d i n g s have no a t t r a c t i o n to an i n v e s t o r , they have a zero value so t h a t the 42*5 l a n d on which they s i t y w o u l d be worth more vacant  .  The  zero  value of the b u i l d i n g when destroyed can a v o i d a l a r g e amount i n recapture income.  In Audrey Gold Storage  capture of 262,000 d o l l a r s was s t r u c t u r e and consequently,  avoided  v. R . f , a r e 2 4  by demolishing  the  the owners were able to deduct  127  t h a t e n t i r e amount as a t e r m i n a l l o s s .  In Emco L t d . v.  The  425 M i n i s t e r of N a t i o n a l Revenue  , the Exchequer Court went so  f a r as to h o l d that where land values best and most p r o f i t a b l e use destroy  of the property  i t s b u i l d i n g s and use  a more p r o f i t a b l e s t r u c t u r e . heritage  Therefore,  designation  by a v o i d i n g  the  would be  i t f o r a parking  b u i l d i n g , an owner c o u l d not  of h i s property  are i n c r e a s i n g ,  to  l o t or to e r e c t  by l e v e l l i n g a p o t e n t i a l  only  increase  the  value  the r e s t r i c t i o n s of a subsequent  but a l s o g r e a t l y b e n e f i t under the tax system with  an a d d i t i o n a l  deduction.  A s o l u t i o n to t h i s problem i s not evident  because of  the  w e l l e s t a b l i s h e d c a p i t a l cost p r o v i s i o n s of the Canadian Income Tax  Act.  The  United  States  I n t e r n a l Revenue Code attempted  to deal with the problem by p r o v i d i n g d i s i n c e n t i v e s to demolish historic structures.  Section  167(n) of the Code  precluded  a c c e l e r a t e d d e p r e c i a t i o n f o r s t r u c t u r e s b u i l t on the where a c e r t i f i e d h i s t o r i c Since  s t r u c t u r e has  the Canadian a c t does not  contain  site  been d e m o l i s h e d ^ . 42  b e n e f i t s s i m i l a r to  the  Americans' generous a c c e l e r a t e d d e p r e c i a t i o n p r o v i s i o n s f o r  new  c o n s t r u c t i o n , t h i s d i s i n c e n t i v e to d e m o l i t i o n the c u r r e n t The  does not  solve  problem.  second American d i s i n c e n t i v e i s to deny any  f o r d e m o l i t i o n expenses and  deductions  the u n d e p r e c i a t e d b a s i s of  demolished h i s t o r i c b u i l d i n g  4 2 7  .  The  demolition  costs  the and  u n d e p r e c i a t e d c a p i t a l cost are added to the c a p i t a l c o s t . o f land.  Currently  i n Canada, d e m o l i t i o n  expenses are  the  likely  a t t r i b u t a b l e to the c a p i t a l cost of the land because they  are  128  i n c u r r e d to i n c r e a s e the land's of the undepreciated  value  A 28  .  But  the  allocation  c a p i t a l cost of the b u i l d i n g to the  cost  of the land c o u l d g r e a t l y help p r e s e r v a t i o n e f f o r t s i n Canada because the t e r m i n a l l o s s advantage would be removed. more, the Income Tax depreciable destroyed  Further-  Act r e g u l a t i o n s i n d i c a t e l a n d i s never  so t h a t the undepreciated  s t r u c t u r e c o u l d never  c a p i t a l cost of the  be recovered  through the  tax  4.2°/ systenr  .  Even i f t h i s p l a n was  implemented, i t would not  prevent the avoidance of the recapture still  and  there would thus  remain a powerful i n c e n t i v e to demolish o l d e r and  po-  t e n t i a l l y worthy s t r u c t u r e s . c) P r e s e r v a t i o n Easements as C h a r i t a b l e Deductions The  U.S.  Code has  been amended so as to allow the  of an easement f o r c o n s e r v a t i o n as a c h a r i t a b l e e x p e n s e ^ . 4  0  purposes to be v a l i d l y  The  b u i l d i n g ' s market v a l u e .  be i n p e r p e t u i t y .  The  appears to  e f f e c t i v e n e s s of u s i n g  4 5 1  be  conservation  easements as a method of h e r i t a g e p r e s e r v a t i o n i n the States  owner  of the covenant reduces the  T h i s tax deduction  c r u c i a l to the. i n c r e a s e and  deducted  easement must be donated to a  c e r t i f i e d h e r i t a g e o r g a n i z a t i o n and must prove t h a t the donation  value  United  .  In Canada, the Income Tax  Act allows the deduction  of  g i f t s to c h a r i t a b l e o r g a n i z a t i o n s or tbf? the Crown under s. 110(1)(a) and  (b).  G i f t s to a Canadian m u n i c i p a l i t y  are  532 e x p r e s s l y made d e d u c t i b l e ^ p r e s e r v a t i o n easement.  J  The  .  T h i s might i n c l u d e a g i f t  only l i m i t a t i o n i s t h a t the  of a gift  129  must be proven by an o f f i c i a l r e c e i p t . of t h i s g i f t would be very d i f f i c u l t 2.2  P r a c t i c a l l y , the  to determine  .  value  Subsection  p r o v i d e s r u l e s f o r a s s e s s i n g the value of t a n g i b l e c a p i t a l  property  but i t i s d o u b t f u l t h a t an easement would be  tangible.  considered  R e g u l a t i o n 3501(1)(e.1) i m p l i e s t h a t an a p p r a i s a l of  that market value would be s u f f i c i e n t as evidence f o r the o f f i c i a l  of the  value  receipt.  A second problem would be t h a t e l i g i b i l i t y  should  be  l i m i t e d to a v o i d over use and abuse of t h i s deduction.  Any  c l a r i f i c a t i o n to the Income Tax Act with r e g a r d to the  validity  of the deduction should i n c l u d e r u l e s l i m i t i n g the deduction to owners of designated p r o p e r t i e s . d) C o n c l u s i o n The  p o l i c y of the c u r r e n t f e d e r a l government i s i n c e n t i v e s  l i k e those i n the U.S.  I n t e r n a l Revenue Code w i l l not  be  implemented i n Canada because there are too many d i f f e r e n c e s i n the two  t a x a t i o n systems.  suggested ^ 4  The M i n i s t e r of Finance r e c e n t l y  that our system i s fundamentally  d i f f e r e n t from the  American system because the Canadian taxpayer may c l a i m d e p r e c i a t i o n deductions at a l a t e r date.  e l e c t to  or c a r r y them forward  f o r deduction  In the U n i t e d S t a t e s , the deduction must be  claimed even i f i t c r e a t e s a tax l o s s t h a t w i l l e x p i r e . p o i n t may  This  be v a l i d i f an a c c e l e r a t e d d e p r e c i a t i o n scheme i s  implemented.  But i f r e n o v a t i o n expenses are merely  considered  as c u r r e n t n o n - c a p i t a l expenses amortizable over a s e t p e r i o d , such as f i v e y e a r s , the c o s t s would be completely  removed from  130  the d e p r e c i a t i o n p r o v i s i o n s . be s i m i l a r l y  Tax  i s o l a t e d from any  A more persuasive  c r e d i t s f o r investment would  depreciation provisions.  argument submitted by the government  concerns the e l i g i b i l i t y  f o r s p e c i a l treatment as  heritage  4-35 properties'"^;  Criteria for e l i g i b i l i t y  to insure t h a t only bonafide  h e r i t a g e property  tax b e n e f i t s thus l i m i t i n g any incentive.  Eligibility  These standards and  thus a l l Canadians would not r e c e i v e equal Act.  owners o b t a i n  l o s s i n revenues caused by  vary g r e a t l y among the v a r i o u s  the Income Tax  importance  would have to be determined by  and p r o v i n c i a l standards. designations  i s of v i t a l  the  the  municipal  the number of  jurisdictions  and  a p p l i c a t i o n under  A s o l u t i o n c o u l d be to p l a c e the onus on  the taxpayer to;jprove the worthiness of h i s s t r u c t u r e f o l l o w i n g very general g u i d e l i n e s t h a t f e d e r a l o f f i c i a l s could Heritage  devise.  Canada r e j e c t e d Wilson's argument because under the  American system c e r t i f i c a t i o n of an e l i g i b l e property p r a c t i c a l l y approved by s t a t e l e v e l o f f i c e r s and been no problem with v a r y i n g  is  there  has  standards ^. 4  Because of the f e d e r a l j u r i s d i c t i o n of the income tax system and  the multitude  of c o m p l i c a t i o n s  Act, the Income Tax Act may  already p l a g u i n g  be a poor means by which to  adequate compensation to h e r i t a g e property  owners.  the  provide  However,  i n c e n t i v e s such as a tax c r e d i t could be implemented f o r h e r i t a g e property  owners without e l i m i n a t i n g s i g n i f i c a n t ;'  government^revenues.  An American commentator i n d i c a t e d t h a t  the most v a l u a b l e r e s u l t of the income tax i n c e n t i v e s was i n c r e a s e d awareness and  the  i n t e r e s t i n the p r e s e r v a t i o n of e x i s t i n g  131  structures "^ . 4  Thus, the r e a l value o f a Canadian tax i n c e n t i v e  7  would not be to compensate the owner but to encourage him to become e l i g i b l e f o r the i n c e n t i v e by v o l u n t a r i l y d e s i g n a t i o n without municipalities.  demanding f u l l ,  seeking  d i r e c t compensation from  T h i s would encourage him to r e s t o r e h i s  s t r u c t u r e p r o v i d i n g immediate jobs and once the r e s t o r a t i o n i s complete, g r e a t e r economic v i a b i l i t y 7.  f o r the s t r u c t u r e .  Grants Where m u n i c i p a l i t i e s have not implemented any other  compensation scheme, they f r e q u e n t l y provide grants to owners of h e r i t a g e b u i l d i n g s . vation Act '' 4  S e c t i o n 1 1 ( 4 ) o f the Heritage Conser- -  p r o v i d e s t h a t m u n i c i p a l i t i e s may compensate owners  8  with g r a n t s .  The M u n i c i p a l A c t f u r t h e r p r o v i d e s t h a t a c o u n c i l  may, by by-law, make a grant to "an o r g a n i z a t i o n considered by c o u n c i l to be c o n t r i b u t i n g to the g e n e r a l i n t e r e s t and advantage 4.39  of the m u n i c i p a l i t y . "  The Vancouver C h a r t e r i n c l u d e s a  power to make grants to "any o r g a n i z a t i o n deemed by the C o u n c i l to.be  c o n t r i b u t i n g to the c u l t u r e , b e a u t i f i c a t i o n , h e a l t h o r  welfare o f the c i t y . ' , ! " 44  0  Presumably, these two s e c t i o n s would  i n c l u d e an owner p r e s e r v i n g h i s h e r i t a g e b u i l d i n g f o r the public's benefit.  In Vancouver, grants are a major i n c e n t i v e  under the c i t y ' s H e r i t a g e C o n s e r v a t i o n P r o g r a m m e  441  .  Victoria  uses i t s powers to p r o v i d e d i r e c t grants i n l i e u o f property tax r e l i e f  4 4 2  .  Grants  s a t i o n f o r two reasons.  are i n f e r i o r t o other forms o f compenF i r s t l y , they do not n e c e s s a r i l y  insure t h a t the funds w i l l be used f o r p r e s e r v a t i o n  4 4  .  532  Secondly,  the g r a n t s  are u n l i k e l y  s a t i o n f o r t h e owner. not will  afford to provide be i n s u f f i c i e n t l y  nation.  to provide  With l i m i t e d funds, large  grants  protected  so t h a t  adequate  compen-  municipalities a landmark  from the burdens o f  can-  owner desig-  133  IV. RECOMMENDATIONS AND The  present  system of d e s i g n a t i o n  under the Heritage objectives.  The  CONCLUSION  Conservation  and mandatory compensation  Act has  f a i l e d to achieve i t s  Act seeks to achieve a balance between p r o -  t e c t i o n of the p u b l i c ' s i n t e r e s t i n m a i n t a i n i n g b u i l d i n g s and building.  p r o t e c t i n g the owner's property  But  r i g h t s i n that  the compensation measure i n s t i t u t e d to  p r o t e c t i o n to the owner has designation  outstanding  provide  been such a massive d e t e r r e n t  t h a t the s t a t u t e upsets the balance by p r o v i d i n g  much p r o t e c t i o n f o r the owner and none s.t or the m u n i c i p a l i t i e s ignore  the s t a t u t e and  building.  n e g o t i a t i o n and  the use  provide  of zoning  bonuses and  f i c i e n t powers under m u n i c i p a l And,  consent i n d i c a t e s there the s t r u c t u r e . law to provide  enabling  This  development  w i l l be no  not have suf-  s t a t u t e s to  more i m p o r t a n t l y ,  provide  r e l i a n c e on the owner's  safe, d e f i n i t e protection f o r  Thus, major changes must be made to the  present  greater protection f o r heritage properties  to r e p l a c e the HCA's p o o r l y  and  designed compensation measures.  i d e a behind compensation as p r o t e c t i o n f o r the property a worthy and  Thus,  more f l e x i b i l i t y • i n p r o t e c t i o n than d e s i g -  n a t i o n but B r i t i s h Columbia m u n i c i p a l i t i e s may  the f l e x i b i l i t y .  too  i n s t e a d seek protection...  by the u n c e r t a i n means of n e g o t i a t i o n with the owner.  permits may  to  admirable i d e a but  to l i m i t i t s d e t e r r e n t  The  owner i s effect,  a d i f f e r e n t and p o t e n t i a l l y cheaper form of p r o t e c t i o n must  be  instituted. The  present  system of p r o t e c t i n g the  d e s i g n a t i o n might provide  b u i l d i n g s through  adequate p r o t e c t i o n but  improvements  134  could be added.  Some f e a t u r e s , notably  measures, are e x c e l l e n t and u n t i l de-designation  the p r o v i s i o n of blanket  coverage  i s a much more e f f e c t i v e scheme than the  Ontario scheme's p r o t e c t i o n by d e l a y . use  the i n t e r i m c o n t r o l  But m u n i c i p a l i t i e s c o u l d  g r e a t e r powers to p r o t e c t a l l the worthy f e a t u r e s of h e r i t a g e  properties.  M u n i c i p a l p r o t e c t i o n should be expanded to  cover  the i n t e r i o r s of s t r u c t u r e s where the p a r t i c u l a r f e a t u r e s are commonly seen- by the p u b l i c and the d e s i g n a t i o n by-law.  are s p e c i f i c a l l y o u t l i n e d i n  To i n s u r e the h e r i t a g e property  remains  a s i g n i f i c a n t s t r u c t u r e ; the m u n i c i p a l i t y must have the power to  impose a f f i r m a t i v e maintenance c o n t r o l s on the property  before the b u i l d i n g d e t e r i o r a t e s .  The  m u n i c i p a l i t y should  owners also  have the power to r e l a x b u i l d i n g code r e g u l a t i o n s when they as o b s t a c l e s to p r e s e r v a t i o n p r o j e c t s . cipality  preserve  thus have a powerful  Such a power must of course  the requirement o f f u l l the e x p r o p r i a t e d  weapon with which  be accompanied  property.  other amendments are a l s o needed to provide  Conservation against t i t l e  F i r s t l y , the  sufficient  Heritage  Act should r e q u i r e t h a t a d e s i g n a t i o n be r e g i s t e r e d i n the l a n d t i t l e s o f f i c e .  T h i s would provide  n o t i c e of the h e r i t a g e r e s t r i c t i o n to a l l who And  with  and f a i r compensation f o r the owner o f  p r o t e c t i o n to h e r i t a g e p r o p e r t i e s .  land.  the muni-  the community's most s i g n i f i c a n t s t r u c t u r e s when  threatened.  Two  finally,  should be given the r i g h t to e x p r o p r i a t e f o r h e r i t a g e  c o n s e r v a t i o n purposes and to  And  act  secondly,  the Act's p e n a l t i e s .  d e a l with  the  there must be a s u b s t a n t i a l i n c r e a s e i n F i n e s of at l e a s t a hundred thousand  135  d o l l a r s w i l l provide much g r e a t e r d e t e r r e n t s to developers o f multi-million dollar properties. As s t a t e d , a b e t t e r compensation scheme should be implemented.  T h i s system c o u l d not only provide p r o t e c t i o n f o r the  property owner but a c t as an i n c e n t i v e to the owner to voluntarily  seek d e s i g n a t i o n .  T h i s new form o f compensation should  only be a v a i l a b l e where the b u i l d i n g i s f o r m a l l y designated and thus s a f e l y p r o t e c t e d . Of the compensation methods surveyed, meets these requirements of  the one t h a t best  i s property t a x r e l i e f .  The assessments  designated h e r i t a g e p r o p e r t i e s should be f r o z e n so t h a t  provements necessary a relatively sufficient  to r e h a b i l i t a t e the s t r u c t u r e w i l l  im-  provide  inexpensive method o f compensation y e t provide  i n c e n t i v e f o r an owner to r e h a b i l i t a t e h i s s t r u c t u r e  and make i t economically  v i a b l e thus l e s s e n i n g the burden o f  heritage designation. Although  t h i s system would decrease  the h e r i t a g e property  owner's expenses, i t would c l e a r l y not compensate .-the owner (  ;  completely  where d e s i g n a t i o n decreases  the value o f the p r o p e r t y .  T h e r e f o r e , an a d d i t i o n a l means o f p r o t e c t i n g the owner should be a v a i l a b l e .  Methods such as the t r a n s f e r o f development  r i g h t s and r e v o l v i n g funds have l i m i t e d a p p l i c a t i o n and thus would not provide comprehensive p r o t e c t i o n f o r h e r i t a g e property owners.  Instead, a h e r i t a g e s t a t u t e should provide an economic  s a f e t y valve to owners.  A f t e r d e s i g n a t i o n , the owner should  have the s t a t u t o r y r i g h t to a h e a r i n g where he can prove the h e r i t a g e r e s t r i c t i o n even with the property tax r e l i e f has  136  c r e a t e d an economic h a r d s h i p .  An economic hardship would e x i s t  where the property does not y i e l d a reasonable  return.  I f the  owner can prove economic h a r d s h i p , the onus w i l l be on  council  to o f f e r f u r t h e r i n c e n t i v e s , e x p r o p r i a t e the s t r u c t u r e i f i t i s truly  important  to a community, or de-designate.  This safety  valve thus p r o v i d e s complete p r o t e c t i o n f o r an owner where he i s s e v e r e l y burdened by the  restriction.  At present, the Heritage Conservation A c t ' s compensation measures are designed logically  designed,  to p r o t e c t the property owner.  But i f  a compensation p r o v i s i o n could go  beyond  that purpose and give g r e a t e r s t r e n g t h to p r e s e r v a t i o n of h e r i ^ tage p r o p e r t i e s and  improve the s t a t e of the property owner.  By a c t i n g as an i n c e n t i v e , h e r i t a g e measures c o u l d make d e s i g n a t i o n a t t r a c t i v e to the owner so t h a t i f he seeks the r e s t r i c t i o n v o l u n t a r i l y and r e h a b i l i t a t e s h i s b u i l d i n g , h e r i t a g e property w i l l become economically  viable.  the  The  building  w i l l thus become a l i v i n g , f u n c t i o n i n g p a r t of a community t h a t i n c i d e n t a l l y p r o v i d e s a e s t h e t i c pleasure and evidence community's p a s t .  of the  With s i g n i f i c a n t amendments to present  l e g i s l a t i o n and the a d d i t i o n of a l o g i c a l l y system, the c r u c i a l balance  designed i n c e n t i v e  between the owner's property  rights  and the p u b l i c ' s r i g h t to p r o t e c t the b u i l d i n g c o u l d be b e t t e r achieved.  In t h i s way,  most of the c o n f l i c t s  surrounding  c u r r e n t h e r i t a g e p r e s e r v a t i o n attempts c o u l d be e l i m i n a t e d and we may  a l l begin to enjoy  the c o n t r i b u t i o n s to the past g i v e n  us by our b u i l t environment.'  137  Footnotes 1. P e n n C e n t r a l T r a n s p o r t a t i o n Co. v . C i t y o f New Y o r k ( 1 9 7 8 ) , 438 U.S. 104 (U.S.S.C.; a f f i r m i n g ( 1 9 7 7 ) , 366 N.E. ( 2 d ) 1271 ( N . Y . C . A . ) . 2. C.Rose, " P r e s e r v a t i o n a n d Community: New D i r e c t i o n s i n t h e Law o f H i s t o r i c P r e s e r v a t i o n " ( 1 9 8 1 ) , 33 S t a n . L.R. 4 7 3 . 3. R.S.B.C. 1979,  c. 195.  4. See A. F a l k n e r , W i t h o u t O u r P a s t ? 5. R.S.B.C. 1979,  (1977) a t p. 10.  c. 165.  6. R.S.B.C. 1 9 6 0 , c . 1 5 . 7. S.B.C. 1 9 7 2 , c . 4. 8. R.S.B.C. 1 9 6 0 , c . 2 5 5 , s . 7 H A c. 5 9 , s . 19.  a s amended by S.B.C.  9. S.B.C. 1 9 5 3 , c 55 a s amended by t h e V a n c o u v e r Amendment A c t , S.B.C. 1 9 7 4 , c . 104, s. 4 5 . 10. S.B.C. 1 9 5 3 , c c. 104, s . 4 5 .  1973,  Charter  5 5 , s . 5 6 4 A ( 1 ) a s amended by S.B.C. 1974,  11. I b i d , s . 5 6 4 A ( 7 ) ( a ) . 12.  Ibid,  s. 5 6 4 A ( 7 ) ( b ) .  13.  H e r i t a g e By-Law No. 4 8 3 7 (December 17, 1 9 7 4 ) .  14. R.S.B.C. 1 9 6 0 , c . 2 5 5 , s . 7 H A c. 5 9 , s. 19. 15.  R.S.B.C. 1979,  a s amended by S.B.C.  1973,  c. 290.  16. See K e n t D i s t r i c t 306 ( B . C . S . C . ) .  v . S t o r g o f f ( 1 9 6 2 ) , 41 W.W.R. 301 a t <  17. C i t y o f V i c t o r i a H e r i t a g e B u i l d i n g s P r o t e c t i o n By-Law 1976 No. 6 9 8 8 ( J u l y 15, 1976) r e f e r r e d t o i n E & J Murphy L t d . v. C o r p o r a t i o n o f t h e C i t y o f V i c t o r i a ( 1 9 7 6 ) , 1 M.P.L.R. 166 ( B . C . S . C ) . 18.  Ibid.  19. E g . , Re L a c e w o o d D e v e l o p m e n t Co. a n d t h e C i t y ( 1 9 7 5 ) , 58 D.L.R. ( 3 d ) 383 ( N . S . C . A . ) .  of Halifax  20. R.S.B.C. 1 9 7 9 , c. 165 p r o c l a i m e d S e p t e m b e r 2 2 , 1977 by B.C. R e g 4 0 2 / 7 7 .  138  2 1 . S.B.C. 1972, c . 4. 22.  R.S.B.C. 1960, c . 2 5 5 , s . 7 H A a s amended by S.B.C. 1973, c 5 9 , s . 19.  2 3 . S.B.C. 1953, c . 55 a s amended by S.B.C. 1974, 24. R.S.B.C. 1979, c . 25.  c . 104, s . 4 5 .  165.  S.B.C. 1972, c . 4 .  26. R.S.B.C. 1979, c . 3 0 6 . 27. I b i d ,  s . 1.  28. R.S.B.C. 1960, c . 29. A s s e s s m e n t  15.  A p p e a l B o a r d D e c i s i o n s , May 2 8 ,  30.  S.B.C. 1972, c . 4 .  31.  Ibid.  1981.  32. R.S.B.C. 1960, c . 2 5 5 , s . 7 H A a s amended by S.B.C. 1973, c. 5 9 , s . 1 9 . 33.  S.B.C. 1953, c . 5 5 , 104, s . 4 5 .  34. S u p r a , n o t e 35.  (1982),  36.  R.S.O.  37. I b i d , 38.  s . 564A a s amended by S.B.C. 1974, c .  17.  20 M.P.L.R. 121  (S.C.C.).  1980, c . 3 3 7 . s. 33.  R e p o r t e d a t ( 1 9 8 0 ) , 12 M.P.L.R. 2 4 1 .  39. R e p o r t e d a t ( 1 9 8 0 ) , H  M.P.L.R. 5 1 .  40. S u p r a , n o t e 3 5 . 41.  R.S.O.  1980, c . 219,  42.  (1924)  1 D.L.R. 4 4 0 .  43.  Gray  44.  R i c h a r d s , "Harsh R e s u l t s f o r M u n i c i p a l i t i e s : S t . P e t e r ' s E v a n g e l i c a l L u t h e r a n C h u r c h a n d C o s t e l l o " ( 1 9 8 4 ) , 6 S.C.L.R. 401.  v. K e r s l a k e ,  s.  (1958)  10.  S.C.R. 3 .  4 5 . R.S.B.C. 1979, c . 1 6 5 , s s . 4, 1 1 .  139  46.  E g . , s . 29 o f t h e O n t a r i o H e r i t a g e A c t , R.S.O. 1 9 8 0 , c . 337 o n l y a l l o w s d e s i g n a t i o n o f p r o p e r t y o f " h i s t o r i c o r a r c h i t e c t u r a l value o r i n t e r e s t . "  47.  S.B.C. 1 9 5 3 , c . 5 5 , s. 564A a s amended by S.B.C. 1 9 7 4 , c. 104, s . 4 5 .  48. R.S.B.C. 1960, c . 2 5 5 , s . 7 H A a s amended by S.B.C. 1973, c. 5 9 , . s . 1 9 . 49.  S e a t t l e , W a s h i n g t o n L a n d m a r k s O r d i n a n c e No. 102229, s . 6 f o u n d i n A Handbook o n H i s t o r i c P r e s e r v a t i o n Law ( D u e r k s o n , ed., 1983; a t p. A37.  5 0 . D u e r k s o n , " L o c a l P r e s e r v a t i o n Law" i n A Handbook o n H i s t o r i c P r e s e r v a t i o n Law ( D u e r k s o n , e d . , 1 9 8 3 ) a t p . 8 3 . 51.  See T e x a s A n t i q u i t i e s C o m m i s s i o n v . D a l l a s Community D i s t r i c t ( 1 9 7 7 ) , 554 S.W. T?aT"924 ( T e x a s S . C ) .  52.  See D i G r e g o r i o  53.  ( 1 9 7 8 ) , 6 M.P.L.R. 2 2 6 .  54.  See a l s o M a n h a t t a n C l u b v . L a n d m a r k s P r e s e r v a t i o n C o m m i s s i o n o f t h e C i t y o f New Y o r k ( 1 9 b b ; , 273 N.Y.S. ( 2 d ) 8 4 8 (N.Y.S. C.) f o r a s i m i l a r r e s u l t .  55.  See t h e O n t a r i o H e r i t a g e A c t , R.S.O. 29(4)(b):  56.  See t h e H e r i t a g e P r o p e r t y A c t , S.N.S. 1 9 8 0 , c . 8, s . 1 3 ( 2 ) .  57.  See t h e H e r i t a g e P r o p e r t y A c t , S.S. 1979-80, c . H-2.2, s . 1 2 .  v . Town o f A n c a s t e r  (1979),  College  10 O.M.B.R. 1 6 1 .  1980, c. 337, s.  58. R.S.B.C. 1979, c 1 6 5 . 59.  Ibid,  s . 5.  60. I b i d ,  s. 6 ( b ) , ( c ) , ( d ) .  61. I b i d ,  s s . 10-15.  62. F o r eg., i n Saskatchewan, the Heritage Property A c t , S.S. 1979-80, c. H-2.2, s. 11(2) r e q u i r e s t h i r t y days n o t i c e . The A l b e r t a H i s t o r i c a l Resources A c t , R.S.A. 1980, c. H-8, s. 22(2) r e q u i r e s s i x t y days n o t i c e . 63. R.S.B.C. 1979, c  165, s. 1 1 ( 2 ) ( b ) .  64. I b i d , s. 12. 65.  S.B.C. 1 9 5 3 , c 5 5 , s . 564A a s amended by S.B.C. 1 9 7 4 , c. 1 0 4 , s . 4 5 .  HO  66.  See f o o t n o t e s 24-33 a n d a c c o m p a n y i n g  67.  See t h e C o n s t i t u t i o n A c t , 1 8 6 7 , s . 9 1 ( 1 A ) ; a n d R e x , v . R o s s , ( 1 3 2 6 ) 4 D.L.R. 894 ( N . B . C . A . ) ; O t t a w a v.~SHore^& H o r w i t z C o n s t r u c t i o n ( 1 9 6 0 ) , 22 D.L.R. ( 2 d ) 247 ( O n t . H. C ) ; D e l t a v . A z t e c A v i a t i o n Grout) ( 1 9 8 5 ) , 28 M.P.L.R.  215  text.  (B.C.S.C.yT  68.  See d i s c u s s i o n o n R a i l w a y  Station Designation, infra,  69.  R.S.B.C. 1979,  70.  S.S. 1979-80, c . H-2.2, s . 8 0 .  p. 39.  c. 306, s. 1 4 ( 1 ) .  7 1 . S.N.S. 1 9 8 0 , c . 8, s . 2 5 . 72. R.S.B.C. 1 9 7 9 , c . 1 6 5 , s . 12. 73.  See R e g i n a v. P r i d e C l e a n e r s & D y e r s L t d . ( 1 9 6 5 ) , 49 D.L.R. ( 2 d ) 7 5 2 ; a n d R. v . H o r b a c k ( 1 9 6 7 ) , 64 D.L.R. ( 2 d ) 17 ( B . C . S.C). :  74. R.S.A. 1 9 8 0 , c . H-8. 75.  S.S. 1979-80, c . H-2.2.  76. R.S.O. 1 9 8 0 , c . 3 3 7 . 77.  F o r f a c t s , s e e E & J Murphy L t d . v . The C o r p o r a t i o n o f t h e C i t y o f V i c t o r i a , s u p r a , n o t e 17.  78.  S.B.C. 1 9 5 3 , c . 5 5 , s . 564A a s amended by S . B . C 104, s . 4 5 .  79.  S.S. 1979-80, c . H-2.2, s . 2 8 ( 1 ) ( e ) .  1974, c .  8 0 . R.S.A. 1 9 8 0 , c . H-8, s . 2 2 ( 8 ) . 8 1 . R.S.O. 1 9 8 0 , c . 3 3 7 , s . 2 9 ( 3 ) ( a ) . 82.  See t h e H e r i t a g e C o n s e r v a t i o n A c t , R . S . B . C s. 5 ( 1 ) .  1979,  c. 165,  8 3 . E g . , A l b e r t a H i s t o r i c a l R e s o u r c e s A c t , R.S.A. 1 9 8 0 , c. H-8, s s . 15, 16; H e r i t a g e P r o p e r t y A c t , S.S. 1979-80, c . H-2.2, s . 4 4 . 84. R.S.B.C  1979,  c. 165, s. 12.  8 5 . R.S.O. 1980, c. 3 3 7 . 86.  T h i s n o t i c e p r o v i s i o n must be s t r i c t l y f o l l o w e d . See S t . P e t e r ' s E v a n g e l i c a l L u t h e r a n C h u r c h v . The C i t y o f O t t a w a ,  141  supra, note 35. 87.  Ibid.  88.  (1984),  12 D.L.R. (4th) 396 (Ont. D i v . C t . ) .  89. S.S. 1979-80, c. H-2.'2, as amended by S.S. 1983-84, c. 3 9 , s. 20. 90. P e t t i t , " T e e t e r i n g on the P a c i f i c Rim" (1986), Heritage 14.  12:2 Cdn  91. Eg., A l b e r t a H i s t o r i c a l Resources Act, R.S.A.1980, c. H-8, s. 22(6); H e r i t a g e Property A c t , S.S. 1979-80, c. H-2.2, s. 23; O n t a r i o H e r i t a g e A c t , R.S."0. 1980, c. 337, s . 33. 92. Heritage Property A c t , S.S. 1979-80, c. H-2.2, s. 2 3 ( 3 ) . 93. V/innipeg, Manitoba By-Law no. 1474/77 No. 2032/78 as d e s c r i b e d by Regelous, i n Manitoba: The New C i t y o f Winnipeg P i t b l a d o L e c t u r e s on C o n t i n u i n g L e g a l at p. 209.  as amended by By-Law "Heritage P r e s e r v a t i o n By-Laws" i n Isaac E d u c a t i o n , (1980)  94. The term was used by Duerkson, supra, note 50 a t pp. 108112. 95. See "King George S c h o o l " (1977), 1:4 Heritage West 10; "A Shame and a,Scandal" (1978), 2:1 Heritage West 8. 96. See the M u n i c i p a l Act, R.S.B.C. 1979, c. 290, s. 936(1). The C i t y o f Vancouver has s i m i l a r powers under the Vancouver C h a r t e r , S.B.C. 1953, c. 55, s. 306(q) as amended. 97. R.S.O. 1980, c. 337, s. 6 9 ( 5 ) ( a ) . 98. R.S.A. 1980, c. H-8, s.  19.  99. S.S. 1979-80, c. H-2.2, s s . 30(1). Amendments (S.S. 198384, c. 39, s s . 11, 15) p r o v i d e t h a t i f an owner o b j e c t s to the order, he i s e n t i t l e d to a h e a r i n g . 100.  I b i d , s. 30(2).  101.  T h i s c o u l d be accomplished i n much the same way the C i t y of Vancouver was allowed to delegate the powers to a m u n i c i p a l o f f i c i a l to s e t s a f e t y i n s p e c t i o n standards f o r vehicles. See the Vancouver C h a r t e r , S.B.C. 1953, c. 55, s. 3 1 7 ( p ) ( i i ) as amended by S.B.C. 1968, c. 71, s. 15.  102.  Supra, note 50 a t p. 53.  103.  R.S.A. 1980, c. H-8, s. 47(1).  142  104. S . S . 1 9 7 9 - 8 0 , c . H-2.2, s . 7 6 . 105.  T h e V a n c o u v e r C h a r t e r , S . B . C . 1953, c . 5 5 , s . 5 6 5 A ( e ) a s a m e n d e d by S . B . C . 1 9 6 4 , c . 7 2 , s . 18; S . B . C . 1 9 6 6 , c . 6 9 , s. 23; S.B.C. 1978, c . 41, s . 3 1 .  106. R.S.B.C. 1979, c 2 9 0 . 1 0 7 . I b i d , a s a m e n d e d by B i l l 6 2 ( P r o c l a i m e d D e c . 3 1 , 1 9 8 5 ) . For t h e C i t y o f Vancouver's zoning powers, see i n f r a , notes 116TT120 a n d a c c o m p a n y i n g t e x t . 108. I b i d , s . 9 6 7 . 109. See t h e P l a n n i n g A c t , R.S.A. 1980, c . P - 9 , s . 6 9 ( 3 ) . 1 1 0 . R ^ S . B . C . 1979, c . 2 9 0 . s . 9 7 6 a s a m e n d e d by B i l l 6 2 ( P r o c l a i m e d D e c . 31, 1985). 110A. I b i d , s s . 9 4 5 ( 4 ) ,  976.  110B. I b i d , s . 9 4 5 ( 4 ) ( f ) , ( g ) . 1 1 1 . S.M. 1 9 7 1 , c . 105, s . 5 7 3 ( e . 1 ) a s a m e n d e d by S.M. 1977, c. 64, s . 6 5 . O t h e r M a n i t o b a m u n i c i p a l i t i e s have a s i m i l a r duty t o c o n s i d e r p r e s e r v a t i o n under the P l a n n i n g A c t , S.M. 1975, c 2 9 , s . 2 7 ( 4 ) ( v ) . 111A. 112.  113.  R . S . B . C . 1979, c (Proclaimed Dec. (1979)  (Alta.  S.C.R. C.A.).  1  98  290, s . 9 4 5 ( 4 ) 31, 1985).  affirming  a s a m e n d e d by B i l l  (1977),  81 D . L . R .  62  (3d) 543  See t h e P l a n n i n g A c t , R.S.A. 1970, c . 276, s . 106.  114.  R.S.A. 1980, c .  H-8.  115.  S i m i l a r l y , a n A m e r i c a n c a s e , Rebman v . The C i t y o f S p r i n g f i e l d ( 1 9 6 9 ) , 250 N . E . ( 2 d ) 28"2 h e l d t h a t t h e r e m u s t be express l e g i s l a t i v e r e c o g n i t i o n that p r e s e r v a t i o n advances t h e g e n e r a l w e l f a r e o f a c o m m u n i t y b e f o r e z o n i n g c a n be used f o r preservation.  1 1 6 . " Y a l e t o w n R e z o n e d f o r H e r i t a g e " , V a n c o u v e r S u n , May 9 , 1986 a t p . A 3 . 117.  S . B . C . 1953, c 55 a s a m e n d e d by S . B . C . 1959, 20; S . B . C . 1964, c . 2, s . 1 7 .  118. E m p h a s i s 119.  c . 107, s .  added.  S e e t h e V a n c o u v e r C h a r t e r , S . B . C . 1953, a m e n d e d by S . B . C . 1963, c . 6 0 , s . 8 .  c . 5 5 , s . 304 a s  143  1 2  °*  Supra, note 112.  121. Zoning and Development By-law No. 3575, 122.  R.S.B.C. 1979,  c. 290.  123. I b i d , s s . 9 6 2 ( 2 ) , 124. R.S.B.C. 1979, 125.  s. 3 . 3 . 4 ( d ) .  974.  c. 3 0 5 .  Heritage By-law No. 4837,  s. 4 (December  17, 1 9 7 4 ) .  126. See "Schoolhouse D e m o l i t i o n Sparks Row i n Langley", Vancouver Sun, May 21, 1986 a t p. A 1 1 . 127.  R.S.A. 1980, c. H-8,  s. 4 8 .  128. R.S.O. 1980, c. 337,  s. 69.  129.  S.S. 1979-80, c. H - 2 . 2 ,  130.  I b i d , s. 7 3 ( 1 ) ( b ) .  131.  See the R e c r e a t i o n Development A c t , P.E.I.R.S. R-9, s. W.  132.  See the H i s t o r i c O b j e c t s and S i t e s Act, S.N. 1973, s. 3 9 .  133.  R.S.M. 1970,  135.  137.  c. 8 5 ,  s. 6 9 ( 5 ) .  S.S. 1979-80, c. H - 2 . 2 ,  136. R.S.A. 1980, c. H-8,  1974, c.  s. 2 0 .  c. H-70,  134. R.S.O. 1980, c. 337,  s. 7 3 ( l ) ( a ) .  s. 7 3 ( 2 ) .  s. 4 8 ( 3 ) .  R.S.B.C. 1979,  c  165,  s. 7 ( 3 ) .  138. R.S.B.C. 1979,  c  290,  s. 3 1 0 .  139.  S.B.C. 1953,  c. 5 5 , s. 306(h) as amended.  140.  Unreported, December 1,  141.  To determine whether o r not an i n t e r e s t e d group would have s t a n d i n g , see Re Saanich I n l e t P r e s e r v a t i o n S o c i e t y and Cowichan V a l l e y R e g i o n a l D i s t r i c t ( 1 9 8 3 ) , 147 D.L.R. (3d) 174 (B.C.C.A.); Re Sunshine H i l l s Property Owners Associ». a t i o n and the M u n i c i p a l i t y o f D e l t a ( 1 9 7 7 ) , 80 D.L.R. ( 3 d ) 692 ( B . C . S . C ) ; A s s o c i a t i o n des P r o p r i e t a i r e s des J a r d i n s Tache I n c . e t a l v. Les E n t e r p r i s e s Dasken I n c . e t a l ( 1 9 7 1 ) , 26 D.L.R. ( 3 d ) 79 (S.C.C.).  1981 (B.C.S.C. No. 08151.74).  144  142. The F e d e r a t i o n of Canadian M u n i c i p a l i t i e s R e s o l u t i o n No. IX - 9006, " P r o t e c t i o n of H e r i t a g e Railway B u i l d i n g s " ( 1 9 8 5 ) . 143. See Murphy, "Canada's T r a i n S t a t i o n s : D e s t i n a t i o n O b l i v i o n or P r o t e c t i o n " (1985), 11:3 Cdn H e r i t a g e 28. 144.  (1984), 26 M.P.L.R. 245  145.  R.S.C. 1970,  c. R-2,  (Sask. Q.B.).  s. 6 ( 1 ) ( c ) .  146. Eg., C.P.R. v. A.G.B.C., (1950) 1 W.W.R. 220 (P,C.); C.N.R. v. Nor-Min S u p p l i e s L t d . , (1977) 1 S.C.R. 322. 147.  See MacFie v. C a l l a n d e r and Oban Railway Company, (1898) A.C. 270 a t 287 (H.L.).  148. For f a c t s , see Murphy, supra, note 149.  R.S.C. 1970,  c. R-2,  s.  143.  119.  150. See C.P.R. v. C . T . C , (1985) 1 F.C.  554.  151. Leave to appeal denied February 25,  1985.  152. Supra, note  143.  153.  R.S.C. 1970,  154.  (1977)^366 N.E. (2d) 1271 104 (U.S.S.C.).  154A.  c.  H-6. a f f i r m e d by (1978), 438  See B i l l C-253, 2nd S e s s i o n , 32nd P a r l i a m e n t , 1983-84.  154B. R.S.C. 1970,  c. H-6,  s s . 4-6.  154C.  For eg., see A.G. Nova S c o t i a v. A.G. d e l e g a t i o n Case), (1951) S.C.R. yT.  154D.  R.S.B.C. 1979,  c.  Canada ( I n t e r -  165.  155. See the A l b e r t a H i s t o r i c a l Resources Act, R.S.A. c. H-8, s. 16. 156. S.S.  1979-80, c. H-2.2, s s . 13, U ,  40,  1980,  42.  57.  I b i d , s s . 20,  158.  (1970), 14 D.L.R. (3d)  159.  S.M. Makuch, Canadian M u n i c i p a l And P l a n n i n g Law, at pp. 267-269~I  160.  (1965) S.C.R.  1  U.S.  54.  512.  228  (Alta.  C.A.). (1983)  H5  13 M.P.L.R. 234  161.  (1980),  (S.C.C.).  162.  See "High Rise Tudor Tower Approved" re Dick B u i l d i n g , Vancouver Sun, March 1 2 , 1986 a t p. A3; Fenton e t a l , Heritage P r e s e r v a t i o n i n Vancouver, ( 1 9 7 7 ) .  163.  R.S.B.C. 1 9 7 9 , c. 290, s s . 3 1 3 - 3 1 9 .  164.  R.S.B.C. 1979, c. 209.  1 6 5 . See f o r eg., H e r i t a g e Property A c t , S.S. 1979-80, c. H-2.2, s s . 3(1 ) ( j ) ; 2 8 ( 1 ) ( a ) ; H i s t o r i c S i t e s and Objects A c t , R.S.M. 1970, c. H-70, s. 8 ( 1 ) ; O n t a r i o H e r i t a g e Act, R.S.O. c. 3 3 7 , s. 3 9 ( 1 ) ; Heritage Property A c t , SI.N.S. 19cT0, c. 8, s. 24(1')(d); H i s t o r i c Objects and S i t e s Act, R.S.N.' 1 9 7 3 , c. 8 5 , s. TS: 166.  S e c t i o n 24 o f the A l b e r t a H i s t o r i c a l Resources Act, R.S.A. 1980, c. H-8 makes compensation mandatory f o r m u n i c i p a l d e s i g n a t i o n by the p r o v i n c i a l government.  1 6 7 . R.S.B.C. 1 9 7 9 , c.  165.  168. R.S.B.C. 1 9 7 9 , c.  117.  1 6 9 . I b i d , s. 2 3 . 170. R.S.B.C. 1 9 7 9 , c. 290. An i d e n t i c a l p r o v i s i o n e x i s t s f o r the C i t y o f Vancouver under the Vancouver Charter, S.B.C. 1953, c. 5 5 , s. 5 4 1 . 171'• See the M u n i c i p a l Act, R.S.B.C. 1979, c. 290, s. 555; Vancouver C h a r t e r , S.B.C. 1953, c. 5 5 , s. 544. 172.  See R i c k e t v. M e t r o p o l i t a n Railway Co., (1867) I.R. 2 H.l. 175.  1 7 3 . R.S.C. 1970, c. A - 3 , s. 6 ( 1 ) ( j ) , ( 1 0 ) . 174.  (1982),  24 L.C.R. 266 (B.C.C.A.).  175.  (1985),  17 D.L.R. (4th)  1.  176. R.S.B.C. 1979, c. 290, s. 544. 177.  See Huot, "Compensation f o r D e s i g n a t i o n " (198C1), 5 Heritage West 1 5 . See a l s o Denhez, "What P r i c e H e r i t a g e ? " (1981), 21 P l a n Canada 5.  178.  F u r t h e r proof o f the i n j u r i o u s e f f e c t o f a d e s i g n a t i o n comes from other p r o v i n c e s ' h e r i t a g e l e g i s l a t i o n t h a t s p e c i f i c a l l y exclude l i a b i l i t y f o r the i n j u r i o u s a f f e c t i o n caused by d e s i g n a t i o n . F o r eg., see the Heritage Property  146  Act, S.S.  1979-80, c. H-2.2, s. 75.  1 7 9 . See Vancouver H e r i t a g e Advisory Committee, "Towards a Second Century" (1982). See a l s o P e t t i t , " T e e t e r i n g on the P a c i f i c Rim", supra, note 90. 180. Denhez, supra, note  177.  181. Space A d r i f t : Landmark P r e s e r v a t i o n and the Marketplace  TT974) at p. 10.  182. See "Vancouver T r y i n g to Put a P r i c e on H i s t o r y " , Vancouver Sun, November 4, 1985 at p. A18; "Facade Tower P l a n Fought", Vancouver Sun, March 4, 1986 at p. A 3 . 183. Supra, note  177.  184. See Penn C e n t r a l T r a n s p o r t a t i o n Co. v. C i t y of New supra, note 1. 1 8 5 . (1959), 18 D.L.R. (2d) 161 186. Supra, note  York,  (S.C.C.).  1.  187. For eg., see Commonwealth H i s t o r i c Resource Management L t d . , L i s t i n g o f P o t e n t i a l H e r i t a g e B u i l d i n g s , prepared f o r the C i t y of Vancouver (1985); C i t y of Regina P l a n n i n g Department, "A H e r i t a g e Program f o r Downtown" (1983). 188. See the d i s c u s s i o n on the need f o r maintenance supra, notes 94-101 and accompanying t e x t . 189. "What P r i c e H e r i t a g e ? " , supra, note  standards,  177.  190. See E & J Murphy L t d . v. The C o r p o r a t i o n o f the C i t y o f V i c t o r i a , supra, note 17. 191. UI-S. v. Causby (1946), 328 U.S.  256.  192. See Marcus, "Mandatory Development R i g h t s and the Taking Clause" (1975), 24 B u f f L.R. 77. 193.  (1980) F.C.  128  (T.D.).  194. U.S.  v. D i c k i n s o n ( 1 9 4 7 ) , 3 3 1 U.S.  195. U.S.  Const;, Amend. V.  745  196. See R. v. Tener, supra, note 175; A.G. HoteT~Ltd., (1920) A.C. 508 at 542.  at  748.  v. Dekeyser's  197. See f o r eg., the M u n i c i p a l Act, R.S.B.C. 1979, s. 972(1) as amended.  c.  Royal  290,  147  198.  Supra, note  177.  199.  J.H. Baker, An I n t r o d u c t i o n to E n g l i s h L e g a l H i s t o r y  200.  See The P i t y o f Ottawa v. Boyd B u i l d e r s L t d . , (1965) S.C.R. 408."  (1979) at p.-TST:  201. H a r t e l Holdings Po. v. Palgary C i t y C o u n c i l , (1984) 4 W.W.R. 193 (S.P.C.). 202. For eg., see the M u n i c i p a l Act, R.S.B.C. 1979, 972(1) as amended by B i l l 62 (Proclaimed Dec. 203.  Supra, note  204.  The Heritage C o n s e r v a t i o n Act, R.S.B.C. 1979, ss. 4(2), ! l ( 4 ) .  c. 290, s. 31, 1985).  1. c.  165,  :  205. R.S.B.C. 1979,  c. 290 as amended.  206.  See Denhez, supra, note  207.  (1981), 430 A.  208.  Supra, note  209.  Code C i v i l de l a P r o v i n c e de Quebec, A r t i c l e  210.  See H a r t e l Holdings, supra, note 201, where Madame J u s t i c e Wilson i n d i c a t e s t h a t p r i v a t e property r i g h t s are subs e r v i e n t where they c o n f l i c t with the p u b l i c i n t e r e s t .  211.  The Heritage C o n s e r v a t i o n Act does not s p e c i f i c a l l y empower the d e s i g n a t i o n of a h i s t o r i c d i s t r i c t but the d e f i n i t i o n of a h e r i t a g e s i t e i s broad enough to apply to i n c l u d e areas as w e l l as i n d i v i d u a l b u i l d i n g s .  212.  See L i s t o k i n , Landmarks P r e s e r v a t i o n and the Property Tax (1982) at pp. 43-44.  213.  Huot, supra, note  214.  Pettit,  215.  P i t y of Vancouver By-Laws No. 5291 (Oct. 30, 1979), 5300 (Dec. 4, 1979), 5353 (June 17, 1980), 5354 (June 17, 1980), 5355 (June 17, 1980) amending the H e r i t a g e By-Law No. 4837.  (2d) 1387  177 among o t h e r s . (D.C.C.A.).  177.  supra, note  177. 90.  216. M. Denhez, Heritage F i g h t s Back (1978) at p. 217.  13.  162.  See Vancouver H e r i t a g e Advisory Pommittee, "Towards a Second Pentury (1982).  148  218.  The C i t y o f V i c t o r i a h a s a s i m i l a r p o l i c y u s i n g d e s i g n a t i o n o n l y a s a " l a s t r e s o r t " a n d i n t h e most e x c e p t i o n a l c i r cumstances. See S t a r k , " I t S t a r t e d i n B a s t i o n S q u a r e " ( 1 9 8 4 ) 10:1 Cdn H e r i t a g e 2 6 .  219.  " F a c a d e Tower P l a n F o u g h t y , s u p r a , n o t e 1 8 2 . The c o s t o f m a i n t a i n i n g t h e f a c a d e a l o n e i s 1.3 m i l l i o n d o l l a r s .  220.  " V a n c o u v e r T r y i n g t o P u t a P r i c e on H i s t o r y " , s u p r a , 182.  221.  C i t y o f V a n c o u v e r P l a n n i n g D e p a r t m e n t R e p o r t t o C o u n c i l on Tudor Manor, r e f e r r e d t o i n "Tudor Manor's F a t e A w a i t e d " , V a n c o u v e r S u n , F e b r u a r y 1, 1986 a t p . A 3 . A s e c o n d e x a m p l e o f t h e c i t y u s i n g a z o n i n g bonus a s l e v e r a g e t o p r e s e r v e a h e r i t a g e s t r u c t u r e i s t h e Model S c h o o l d e v e l o p m e n t where t h e f l o o r s p a c e r a t i o f o r t h e l o t was i n c r e a s e d f r o m 0.75 t o 2.0 i n r e t u r n f o r c o n s e n t t o d e s i g n a t e t h e s t r u c t u r e . See " S c h o o l M o v i n g Up i n S t a t u s " , V a n c o u v e r C o u r i e r , November 2 7 , 1985 a t p . 8: " H e r i t a g e D e s i g n a t i o n P r o p o s e d f o r S c h o o l " , V a n c o u v e r S u n , November 19, 1 9 8 5 .  222.  See P e t t i t ,  223.  See A l b e r t a H i s t o r i c a l R e s o u r c e s A c t , R.S.A. 1 9 8 0 , c . H-8, s. 24.  224.  (1981),  225.  See Cowan, "How T h e y ' r e S a v i n g 10:3 Cdn H e r i t a g e jl.3t  226.  N a t i o n a l H i s t o r i c P r e s e r v a t i o n A c t , 16 U.S.C. s . 470 (1976 & s s . 1 0 6 ( a ) ( 6 ) o f 1980 amendments. More f r e q u e n t l y , m u n i c i p a l i t i e s i m p l e m e n t a n i n f o r m a l p o l i c y whereby b u i l d i n g s w i l l n o t be d e s i g n a t e d where t h e owner o b j e c t s . See f o r e g . , t h e C i t y o f R e g i n a ' s p o l i c y r e f e r r e d t o i n "150 P r o p e r t i e s i n R e g i n a on H e r i t a g e L i s t " , R e g i n a L e a d e r P o s t , J u n e 1 0 , 1986 a t p. A 3 .  227:  See O n t a r i o  228.  See R o s e , s u p r a ,  229.  See C o s t o n i s ,  230.  Ibid. See a l s o C o s t o n i s , '^Development R i g h t s T r a n s f e r : An E x p l o r a t o r y E s s a y " ( 1 9 7 3 ) , 83 Y a l e L . J . 7 5 .  231.  S u p r a , n o t e 1.  232.  See S i e d e l , "Landmark P r e s e r v a t i o n A f t e r P e n n C e n t r a l " ( 1 9 8 2 ) , 17 R e a l P r o p , P r o b a n d T r J . 3 4 0 ; D u e r k s o n , s u p r a , n o t e 50  supra,  note'l  note 90.  32 A.R. 336 ( Q . B . ) ;  Heritage  Alberta's Past",  (1984),  A c t , R.S.O. 1980, c . 3 3 7 , s . 3 4 .  n o t e 2.  supra,  note  181 a t p . 14.  149  at p. 42; C o s t o n i s , "The D i s p a r i t y Issue: a Context f o r the Grand C e n t r a l Terminal D e c i s i o n " (1977), 91 Harv l.R. 402. 233.  See Rose, supra, note 2.  234.  See Campbell v. The M u n i c i p a l i t y of Sydney, (1925) 1 W.W.R. 660.  235. R.S.A. 1970, c. 175, s. 39. 236.  See R i t c h i e v. C i t y o f Edmonton (1980), ( A l t a . Q.B.).  20 L.C.R. 29  237.  See Ontario Heritage Act, R.S.O. 1980, c. 337, s. 36. T h i s e x p r o p r i a t i o n power i s v i t a l to Ontario m u n i c i p a l i t i e s who l a c k the power to i n d e f i n i t e l y prevent the d e m o l i t i o n of a designated s t r u c t u r e .  238. Heritage Property Act, S.N.S. 1980, c. 8, s. 27(9). 239.  Heritage Property Act, S.S. 1979-80, c. H-2.2, s. 26 r e p e a l e d by S.S. 1983-84, c. 39, s. 10.  240. Eg., The M u n i c i p a l Government Act, R.S.A. 1980, c. M-26, s. 12 and the Muncipal E x p r o p r i a t i o n Act, R.S.S. 1978, c. M-27, s. 3 combined with the Heritage Property Act, i b i d , s. 28(1)(g) should be wide to a l l o w m u n i c i p a l i t i e s i n A l b e r t a and Saskatchewan to e x p r o p r i a t e h e r i t a g e buildings. 241.  S.B.C. 1953, c. 55 as amended by S.B.C. 1958, c. 72, s. 28.  242. RSS.B.C. 1979, c. 290. 243.  See C o s t o n i s , "The Chicago P l a n : I n c e n t i v e Zoning and the P r e s e r v a t i o n of Urban Landmarks" (1972), 85 Harv L.R. 574 at 584.  244.  Penn C e n t r a l T r a n s p o r t a t i o n Co. v. The C i t y o f New York, supra, note 1.  245.  Ibid.  23>6. See Netherton, " R e s t r i c t i v e Agreements f o r H i s t o r i c v a t i o n " (1980), 12 Urban Law 54.  Preser-  247.  The Heritage T r u s t i s a c o r p o r a t i o n c r e a t e d by s s . 16-26 o f the Heritage C o n s e r v a t i o n Act to "support, encourage and f a c i l i t a t e the c o n s e r v a t i o n , maintenance and r e s t o r a t i o n o f h e r i t a g e p r o p e r t y " i n B r i t i s h Columbia.  248.  A l b e r t a H i s t o r i c a l Resources Act, R.S.A. 1980, c. H-8, s . 25; Heritage Property Act, S.S. 1979-80, c. H-2.2, s. 59;  150  O n t a r i o H e r i t a g e A c t , R.S.O. 1 9 8 0 , c . 3 3 7 , s . 3 7 ; H i s t o r i c S i t e s P r o t e c t i o n A c t , R.S.N.B. 1 9 7 3 , c . H-6 , s . 2.1: ( 1 ) ; H e r i t a g e P r o p e r t y A c t , S.N.S. 1980, c . 8, s . 18; Museum A c t , STP.E.I. 1978, c. 34, s. 1 0 ( 1 ) ; H i s t o r i c O b j e c t s and S r E e s A c t , S.N. 1 9 7 3 , c . 8 5 , s . 20A. 249.  Eg. A l b e r t a H i s t o r i c a l Resources A c t , i b i d , s. 2 5 ( 1 ) ( d ) ; H i s t o r i c S i t e s P r o t e c t i o n A c t , R.S.N.B. 1 9 7 3 , c . H-6, s . 2.1 a s amended by S.N.B. 1 9 7 7 , c . 2 7 .  250.  F o r f a c t s , see B r i n k , "Experience o f the Galveston H i s t o r i c a l Foundation i n Using Legal Tools t o Support H i s t o r i c P r e s e r v a t i o n " ( 1 9 8 0 ) , 12 U r b a n Law 7 4 .  251.  Ibid.  252.  G a l v e s t o n H i s t o r i c F o u n d a t i o n , " P r o p o s e d Deed C o v e n a n t s " f o u n d in. H i s t o r i c P r e s e r v a t i o n Law ( R o b i n s o n , e d . , 1 9 7 9 ) .  253.  Brink,  254.  Ibid.  255.  Ibid.  256.  See t h e d i s c u s s i o n o n Income T a x I n c e n t i v e s , i n f r a , p p . 118-131. I n " P r i v a t e L a n d Use C o n t r o l s U s e f u l f o r H i s t o r i c P r e s e r v a t i o n " a t p . 327 o f H i s t o r i c P r e s e r v a t i o n Law (Robinson, ed., 1979), Jahns i m p l i e d t h a t t h e d e d u c t i b i l i t y of the value o f t h e c o n s e r v a t i o n easements and covenants i s e s s e n t i a l t o t h e s u c c e s s f u l use o f c o n s e r v a t i o n easements.  257.  R.S.B.C. 1 9 7 9 , c . 2 9 0 .  258.  The V a n c o u v e r C h a r t e r , S.B.C. 1953, c . 5 5 , s . 2 0 6 ( j ) a s amended by S.B.C. 1963, c . 6 0 , s . 4 p r o v i d e s a s i m i l a r power t o t h e C i t y o f V a n c o u v e r .  259.  See t h e M u n i c i p a l  260.  Ibid,  261.  See C o s t o n i s ,  262.  See R i c h a r d s , "The New Y o r k P l a n : T r a n s f e r s t o A d j a c e n t P r o p e r t i e s " i n T r a n s f e r o f Development R i g h t s ( J . Rose, e d . , 1975) a t p . 123":  263.  "Whoever h a s l a n d p o s s e s s e s a l l s p a c e u p w a r d s t o a n i n d e f i nite extent."  264.  See S c h n i d m a n a n d R o b e r t s , " M u n i c i p a l A i r R i g h t s : New Y o r k ' a C i t y P r o p o s a l t o S e l l A i r R i g h t s Over P u b l i c B u i l d i n g s and  supra,  note 250.  A c t , R.S.B.C. 1 9 7 9 , c . 2 9 0 , P t . V I I I .  s. 537(2). supra,  note  181 a t p . x v i .  151  P u b l i c Spaces"  (1983), 15 Urban Law 347.  265. See the M i n e r a l Act, R.S.B.C. 1 9 7 9 , c. 259. 266. Eg., Saskatchewan Telecommunications c. S-34, s. 12(2). 267. For d e t a i l s ,  Act, R.S.S. 1978,  see Penton e t a l , supra, note 162.  268. See "The Moody Gem on a Dreary Corner", Vancouver Sun, February 1, 1986 at p. D 3 . 269. Supra, note 262. 270. New York, N.Y. Zoning R e s o l u t i o n A r t i c l e V I I , c. 4, s s . 74-792 (1971). 2 7 1 . For d e t a i l s , see E l i o t and Marcus, "From E u c l i d to Ramapo: New D i r e c t i o n s i n Land Development C o n t r o l s " i n T r a n s f e r of Development R i g h t s , (^J.prRose, ed., 1 9 7 5 ) at p . 1 5 7 ; Marcus, supra, note 1 9 2 ; R i c h a r d s , supra, note 262. 272. See R i c h a r d s , i b i d at p. 135. 273. C o s t o n i s , supra, note  181 at p. 5 5 .  274. New York Zoning R e s o l u t i o n A r t i c l e V I I , c. 4, s. 74-79 as quoted i n R i c h a r d s , supra, note 262 at p. 134. 275. Penn C e n t r a l T r a n s p o r t a t i o n Co. v. New York C i t y , supra, note 1. 276.  Ibid.  277. See R i c h a r d s , supra, note 262 at p. 132. 278. Supra, note 264. 279. F o r d e t a i l s , 140.  see R i c h a r d s , supra, note 262 at pp. 137-  280. F r e d F. French I n v e s t i n g Co. v. C i t y o f New York 350 N.E. (2d) 381 (N.Y.C.A.).  (1976),  281. See Marcus, supra, note 192. 282. See S i e d e l , supra, note 232. 283. See Re Columbia E s t a t e s and the D i s t r i c t o f Burnaby (1974), 49 D.L.R. (3d) 123 (B.C.S.C77; Re C o r p o r a t i o n o f the D i s t r i c t of North Vancouver Zoning By-Law 4 2 7 T 7 " [ 1 9 7 3 ) ; 2 W.W.R. 260 (B.C•S.C.)•  152  284. See H o s k i n s , " P o l i c e P o w e r a n d C o m p e n s a b l e T a k i n g s : A l a n d m a r k D e c i s i o n C l a r i f i e s t h e R u l e " ( 1 9 7 9 ) , 11 Conn L.R. 2 7 3 ; D e l a n e y e t a l , "TDR R e d u x : A S e c o n d G e n e r a t i o n o f P r a c t i c a l L e g a l C o n c e r n s " ( 1 9 8 3 ) , 15 U r b a n Law 5 9 3 ; S i e d e l , supra, note 232. 285. See C o s t o n i s , s u p r a , n o t e 181 a t p p . 55-59. 286. I b i d , p p . 4 8 - 5 2 . 287. See C o s t o n i s , s u p r a , n o t e 2 3 0 , p . 8 6 . 288. C o s t o n i s , s u p r a , n o t e 1 8 1 , p p . 5 2 - 5 4 . 289. S u p r a , n o t e 2 3 0 , p . 8 7 . 290. C o s t o n i s , s u p r a , n o t e 1 8 1 , p p . 5 2 - 5 4 . 2 9 1 . I b i d , p p . 53-54. 292. D u e r k s o n ,  s u p r a , note 50, p. 7 3 .  293. M a r c u s , supra,:;note 1 9 2 . 294. See Makuch, s u p r a , n o t e 159,  p. 262.  295. S u p r a , n o t e 284. 296. S u p r a , n o t e 2 6 2 . 297.  Ibid.  298. S.B.C. 1 9 5 3 , c 5 5 , s . 5 6 5 ( f ) a s amended by S.B.C. 1 9 5 9 , c. 107, s . 2 0 ; S.B.C. 1964, c . 7 2 , s . 1 7 . 299.  Ibid.  300. R.S.B.C. 1 9 7 9 , c . 290 a s amended. 301. I b i d ,  s. 956.  302. I b i d ,  s. 702A(3).  303. I b i d , s . 9 7 6 ( 3 ) . 304. See L i s t o k i n ,  s u p r a , note 212, p. x x i i i .  3 0 5 . R.S.B.C. 1 9 7 9 , c . 1 6 5 , s . 1 1 ( 4 ) . 306. The A l b e r t a H i s t o r i c a l R e s o u r c e s A c t , R.S.A. 1 9 8 0 , c . H-8, s. 2 4 ( 4 ) a l l o w s c o m p e n s a t i o n may be by t a x r e l i e f where t h e owner a g r e e s . 307. See H e r i t a g e P r o p e r t y A c t , S.S. 1 9 7 9 - 8 0 , c . H-2.2, s . 28(1)(a).  153 308. See the C u l t u r a l Property A c t , R.S.Q. 1977, c. B-4, s. 33. 309. R.S.B.C. 1979, c. 290. 310. Conn. Gen. S t a t . Ann. s. 12-127a. 311.  N.C. Gen. S t a t .  312.  SeeSStipe, "State and L o c a l Tax I n c e n t i v e s f o r H i s t o r i c P r e s e r v a t i o n " i n Tax I n c e n t i v e s f o r H i s t o r i c P r e s e r v a t i o n , Revised E d i t i o n (Andrews, ed., 1981) at p. 91/  313.  N.M. S t a t . Ann. 18-6-13 (Michie 1978).  3H.  Md. Ann. Code, A r t . 81, s. 12G (Supp 1978).  315.  R.S.Q. 1977,  105-278.  c. B-4, s. 33.  316. Winnipeg, Man. Taxation By-law r e f e r r e d to i n K r o t z , "No Boom Was a Boon" (1985), 11:4 Odn Heritage 22, and i n "Winnipeg Tax Freeze a Boon to H e r i t a g e " (1986), 12:2 Cdn Heritage 10. 317. Krotz,  ibid.  318. R.S.B.C. 1979, c 319.  290, s. 4 0 0 ( 2 ) ( a ) .  I b i d , s. 400(1).  320. See L i s t o k i n , supra, note 212, p. 170. 321. Or. Rev. S t a t . s s . 358.475-.565 (Supp 1977); Or. Laws, c. 514, s. 15 (1975). 322. I b i d , s. 358.480(1). 323. I b i d , s. 358.515. 324. See note 311  and accompanying t e x t .  325. See "Impact o f Property Tax Exemptions on the Average Homeowner", submitted by the Budget D i v i s i o n , Bureau o f Management and Budget to the Mayor and Commissioners o f P o r t l a n d , Oregon (December 31, 1975), r e f e r r e d to i n Powers, "Tax I n c e n t i v e s f o r H i s t o r i c P r e s e r v a t i o n " (1980), 12 Urban Law 103. 326. B i l l 265, Oregon L e g i s l a t i v e Assembly, 1979, r e f e r r e d to i n Powers, i b i d . 327. I b i d , pp. 126-127. 328. I b i d , p. 123.  154 329. See Roddewig, " P r e s e r v a t i o n Law and Economics" i n A Handbook on P r e s e r v a t i o n Law, (Duerkson, ed., 1983) at pp. 427, 451-452. 330. See Powers, "State H i s t o r i c P r e s e r v a t i o n Tax S t a t u t e s : Three Case S t u d i e s " i n Tax I n c e n t i v e s f o r H i s t o r i c P r e s e r v a t i o n , (Andrews, ed., 1981) at p. 108. 331.  R.S.B.C. 1979,  c. 165, s. 11(4).  332. Re C o r p o r a t i o n o f the C i t y of V i c t o r i a (1979), 15 B.C.L.R. 254 (S.C.). 333. R.S.B.C. 1979, c  22.  334. See Vancouver H e r i t a g e Advisory Committee, supra, note 335. Supra, note  179.  212.  336. For eg., C a l . Rev. Code s. 439.2 (West Supp 1979); C a l . Pub. Res. Code s. 5031 (West Supp 1979); Washington, D.C. Code E n c y c l . s. 47-652 (West Supp 1979). 337. See McGee, "State and L o c a l T a x a t i o n : Current P r a c t i c e s , Procedures and E f f e c t s " i n Tax I n c e n t i v e s f o r H i s t o r i c P r e s e r v a t i o n (Andrews, ed., 1981), at p. 102. 338. R.S.B.C. 1979, c. 11, s. 16.  c. 21, s. 26(3) as amended by S.B.C. 1984,  339. See Almy, " C o n s i d e r a t i o n s i n C r e a t i n g Property Tax R e l i e f f o r H i s t o r i c P r e s e r v a t i o n ? i n Tax I n c e n t i v e s f o r H i s t o r i c P r e s e r v a t i o n (Andrews, ed., 1981), at p. 125. 340. See Vancouver Club v. A s s e s s o r o f Area 09-Vancouver, Assessment Appeal Board, Sept. 20, 1978 and June 14, 341.  Assessment Appeal Board, June  12,  1978.  342. Assessment Appeal Board, Oct. 18,  1983.  343. Assessment Appeal Board, J u l y 22,  1981.  1979.  344. Captain's Palace Restaurant Inc. v. A s s e s s o r o f Area 02C a p i t a l , Assessment Appeal Board, J u l y . 30, 1982. 345. Elworthy v. A s s e s s o r of Area 0 2 - C a p i t a l , Assessment Board, Sept. 28, 1982. 346. Assessment  Appeal Board, May  347. Assessment  Appeal Board, Aug.  28, 1981, 15,  1978.  Appeal  supra, note 29.  155  348.  C o n s o l i d a t e d S h e l t e r C o r p o r a t i o n v. R u r a l M u n i c i p a l i t y F o r t G a r r y ( 1 9 6 8 ) , 49 D.L.R. ( 2 d ) 565 (Man. C . A . ) .  349.  Supra,  350.  See S t i p e , s u p r a , n o t e  351.  A c c o r d i n g t o "Nelson: A P r o p o s a l f o r Urban H e r i t a g e C o n s e r v a t i o n " , s u b m i t t e d by t h e M i n i s t r y o f P r o v i n c i a l S e c r e t a r y and G o v e r n m e n t S e r v i c e s , P r o v i n c e o f B r i t i s h C o l u m b i a , N e l s o n , d e s p i t e a p o p u l a t i o n o f o n l y 9500 p e o p l e , h a s t h e h i g h e s t number o f h e r i t a g e s t r u c t u r e s o f any B r i t i s h C o l u m b i a community o t h e r t h a n V a n c o u v e r and Victoria.  352.  Supra,  note  312.  353.  Supfa,  nojbe  325.  note  354. See S t i p e ,  of  339.  supra, note  312.  312.  355.  R.S.B.C. 1979, c . 2 1 .  356.  R.S.B.C. 1979, e.  357.  Supra,  358.  R.S.B.C. 1979, c. 2 1 .  359.  U.S.  360.  R.S.N. 1970, c. 40 as amended by S.N. 9.  361.  The V a n c o u v e r C h a r t e r ' s h e r i t a g e p r o v i s i o n ( S . B . C . 1974, c. 104, s . 4 5 ) , r e p e a l e d by t h e HCA, h a d a s i m i l a r p r o v i s i o n .  362.  E g . , t h e H e r i t a g e P r o p e r t y A c t , S.S. s s . 13, 14, 4 0 , 4 2 .  363.  N.Y.C. A d m i n . Code, c. 8-A,  note  Const.,  22.  332.  Amend. V, X I V . 1975-76, c. 7 2 , s .  1979-80, c. H-2.2,  s . 205-1.0 e t s e q  (1976).  364. I b i d ,  s. 2 0 7 - 8 . 0 .  365.  Ibid,  s. 2 0 7 - 1 . 0 .  366.  See C o s t o n i s , s u p r a , n o t e  367.  Supra,  368.  H i s t o r i c Landmark and t h e H i s t o r i c D i s t r i c t P r o t e c t i v e A c t o f 1978, D.C. Code s. 5-821 e t s e q . (Supp 1 9 8 0 ) .  note  232.  184.  156  3 6 9 . Supna, n o t e 2 0 7 . 3 7 0 . D.G. Code s . 5 - 8 2 4 ( g ) 371.  (1980 Supp).  Supra, note 207.  3 7 2 . See M a n h a t t a n C l u b v . Landmark C i t y , supra, note 54.  C o m m i s s i o n o f New Y o r k  3 7 3 . Supra;? n o t e 1. 374. S u p r a , n o t e 207. 3 7 5 . ( 1 9 6 8 ) , 288 N.Y.S. ( 2 d ) 3 U 376.  ( 1 9 7 4 ) , 316 N.E. ( 2 d ) 305  3 7 7 . S.S. 1979-80,  (S.C.A.D.). (N.Y.G.A.).  c . H-2/2, s . 2 0 .  378. R.S.B.C. 1 9 7 9 , c . 2 0 6 , s . 2 7 ( 4 ) . 3 7 9 . I.R.C. Code, s . 191 a s amended by T a x R e f o r m A c t o f 1 9 7 6 ; I.R.C. o f 1954, s . 1 6 7 ( d ) . 3 8 0 . See Oldham, " F e d e r a l Tax P r o v i s i o n s a n d t h e F e d e r a l F r a m e work f o r H i s t o r i c P r e s e r v a t i o n " ( 1 9 8 0 ) , 12 U r b a n Law 6 6 . 381.  Ibid.  3 8 2 . R.S.C. 1 9 5 2 , c . 148 a s amended. 3 8 3 . See " A p p r o v a l W i t h h e l d o n Tax P o l i c y : ( 1 9 8 5 ) , 11:5 Cdn H e r i t a g e 1 1 .  Michael  Wilson"  384. The C o n s t i t u t i o n A c t , 1 8 6 7 , s . 9 2 ( 1 3 ) . 3 8 5 . R.S.C. 1 9 5 2 , c . 1 4 8 , s . 1 8 ( 1 ) ( b ) . 386. I b i d ,  s. 2 0 ( 1 ) ( a ) .  3 8 7 . Income T a x R e g u l a t i o n s , S c h e d u l e I I I , C l a s s 3, S.O.R. Cons/78, c. 945. 388. I b i d ,  C l a s s 6.  3 8 9 . Income T a x A c t , R.S.C. 1 9 5 2 , c . 1 4 8 , s . 1 8 ( 3 . 1 ) a s a d d e d by S.C. 1 9 8 0 - 8 1 - 8 2 - 8 3 , c . 1 4 0 . 390.  ( 1 9 2 6 ) , 10 T.C. 188 ( H . L . ) .  391.  See C a n a d a S t e a m s h i p L i n e s v . M . N . R . , ( 1 9 6 6 ) 0 . T . C . 2 5 5 ( E x c h . C t ) ; The Queen v . S h a b r o I n v e s t m e n t s , TT9~79) C.T.C. 125 ( F e d . C.A.).  157  392.  See M o n t s h i p L i n e s v . M.N.R. ( 1 9 5 4 ) , 5 4 D.T.C. 1 1 5 7 ( S . C . C . ) . See a l s o H a r r i s , C a n a d i a n Income T a x a t i o n ( 3 d e d . ) 1 9 8 3 ) a t p p . 183-189.  393.  See C a n a d a S t e a m s h i p s  394.  See L e v i n t e r v . M.N.R. Appeal Board).  395.  See C a n a d a S t e a m s h i p s  396.  See L e v i n t e r v . M.N.R., s u p r a , n o t e 3 9 4 .  397.  Supra, note 3 9 1 .  398.  Supra, note 3 9 4 .  399.  (1965),  400.  (1960),  65  D.T.C.  684  L t d . v . M.N.R., s u p r a , n o t e 3 9 1 . (1951).  5  D.T.C.  359  (Income T a x  L t d . v . M.N.R., s u p r a , n o t e 3 9 1 .  (T.A.B.).  60 D.T.C. 3 1 8 ( T . A . B . ) .  401.  I;R.C. Code s . 191 ( 1 9 7 6 ) r e p e a l e d by E c o n o m i c R e c o v e r y T a x A c t , P u b . L. No. 9 7 - 3 4 ; 9 5 S t a t 2 3 9 ( 1 9 8 1 ) .  402.  See T i e d t , e t a t , " H i s t o r i c P r e s e r v a t i o n P r o v i s i o n s o f t h e I n t e r n a l R e v e n u e Code" i n H i s t o r i c P r e s e r v a t i o n Law ( R o b i n son, e d . 1 9 7 9 ) a t p. 3 7 9 .  403.  I.R.C. Code s . 191 (a()'(n)(B) ( 1 9 7 6 ) r e p e a l e d by E c o n o m i c R e c o v e r y T a x A c t , P u b . L. No. 9 7 - 3 4 ; 9 5 S t a t . 2 3 9 ( 1 9 8 1 ) .  404.  16 U.S.C. s . 4 7 0 e t s e q . ( 1 9 7 4 & 1982 S u p p . ) .  405.  3 6 Code o f F e d e r a l R e g u l a t i o n s s . 60.2 ( 1 9 8 1 ) a n d s e e Dworsky e t a t , "An O v e r v i e w o f F e d e r a l P r e s e r v a t i o n Law" i n A Handbook o n P r e s e r v a t i o n s l a w ( D u e r k s o n , e d , , 1 9 8 3 ) a t p. 4 9 .  406.  I.R.C. Code s . 1 9 1 ( a ) ( 4 ) ( 1 9 7 6 ) r e p e a l e d by E c o n o m i c R e c o v e r y T a x A c t , P u b . L . No. 9 7 - 3 4 ; 9 5 S t a t . 2 3 9 ( 1 9 8 1 ) .  407.  See T i e d t ,  408.  31.R.C. Code s . 1 6 7 ( o ) ( 1 9 7 8 ) r e p e a l e d by E c o n o m i c Tax A c t , P u b . L. No. 9 7 - 3 4 ; 9 5 S t a t . 2 3 9 ( 1 9 8 1 ) .  409.  26VU.S.C. s . 4 8 e t s e q . ( 1 9 8 1 ) .  410.  Dworsky, s u p r a , note 405/  411.  26 U.S.C. s . 4 8 ( g ) ( 2 ) ( C ) ( 1 9 8 1 S u p p ) . Non-historic buildings were e l i g i b l e f o r a maximum t a x c r e d i t o f t w e n t y p e r c e n t o f the r e h a b i l i t a t i o n c o s t s .  supra, note 4 0 2 . Recovery  158  412.  I.R.C. Code s . 191 ( 1 9 7 6 ) r e p e a l e d by E c o n o m i c R e c o v e r y Tax A c t , P u b . L . No. 97-34; 95 S t a t . 238 (1981).'.  413.  Ibid,  414.  H e r i t a g e F i g h t s B a c k , s u p r a , n o t e 216, p . 150. See a l s o Denhez7 P r o t e c t i n g 7he B u i l t E n v i r o n m e n t ( 1 9 8 0 ) .  415.  A s d e f i n e d by Income T a x A c t , R.S.C.1952, c . 148, s . if3 (21)(f).  416.  I b i d , s. 13(1).  417.  I b i d , s. 1 3 ( 2 1 ) ( f ) ( i i i ) - ( v i i i ) . noTe 3 9 1 , p . 2 1 6 .  418.  H e r i t a g e F i g h t s Back, supra, note  419.  I T - 4 6 0 , " D i s p o s i t i o n s - A b s e n c e o f C o n s i d e r a t i o n " ( O c t . 6, 1980).  420.  F o r eg., see IU v. Malloney's 206 ( S . C . C . ) .  s. 1 9 1 ( a ) ( 4 ) .  See a l s o H a r r i s ,  supra,  236, p . 150.  S t u d i o L t d . , (1979) C.T.C.  421. With b u i l d i n g s , e i t h e r C l a s s 3 o r 6 o f Schedule Tax R e g u l a t i o n s , S.O.R. C o n s / 7 8 , c . 9 4 5 .  I I , Income  422.  Income Tax A c t , R.S.C. 1952, c . 148, s . 2 0 ( 1 6 ) .  423.  See M.N.R. v . S t e e n R e a l t y , ( 1 9 6 4 ) C.T.C. 133 ( E x c h . C t . ) .  424.  (1976) C.T.C. 665 ( F . C . T . D . ) .  425.  ( 1 9 6 8 ) C.T.C. 4 5 7 ( E x c h . C t . ) .  426.  I.R.C. Code s . 1 6 7 ( n ) ( 1 9 7 6 ) r e p e a l e d by E c o n o m i c Tax A c t , P u b . L . No. 9 7 - 3 4 ; 95 S t a t . 238 ( 1 9 8 1 ) .  Recovery  427.  I.R.C. Code s . 280B ( 1 9 7 6 ) . The s e c t i o n r e m a i n e d under t h e Economic Recovery Tax A c t , s . 2 1 2 ( d ) .  i n effect  428.  E g . , s e e C o o p e r B l o c k L t d . v . M.N.R. ( 1 9 6 3 ) , 62.  429.  Income T a x R e g u l a t i o n  430.  I.R.C. Code s . 1 7 0 ( f ) ( 3 ) ( B ) ( 1 9 8 0 ) .  431.  See D w o r s k y , s u p r a , note44'05, p p . 4 8 5 - 4 9 9 ; J a h n s , note256.  432.  Income T a x A c t , R.S.C. 1952, c . 148, s . 1 1 0 ( 1 ) ( a ) ( i v ) . G i f t s t o a m u n i c i p a l i t y , l i k e those t o c h a r i t a b l e o r g a n i -  33 T a x A.B.C.  1102(2).  supra,  159  z a t i o n , are l i m i t e d to twenty percent of the t a x p a y e r ' s income w i t h p r o v i s i o n s t o c a r r y t h e d e d u c t i o n f o r w a r d , T h i s l i m i t a t i o n d o e s n o t a p p l y t o g i f t s made t o t h e f e d e r a l o r p r o v i n c i a l Crown u n d e r s. 1 1 0 ( 1 ) ( b ) . 4 3 3 . See  Dworsky, s u p r a , note  434.  See  "Approval Withheld  435.  Ibid.  436.  Ibid.  4 3 7 . See  Oldham, s u p r a , n o t e  4 3 8 . R.S.B.C. 1 9 7 9 ,  c.  4 3 9 . R.S.B.C. 1 9 7 9 ,  c. 2 9 0 ,  440.  S.B.C. 1 9 5 3 , c c. 6 0 , s. 4.  4 4 1 . See 442.  405,  on Tax  380,  pp.  Policy",  pp.  supra, note  383.  66-67.  165. s.  269(n).  5 5 , s. 2 0 6 ( j ) a s amended by  27,  "Value i n Those O l d B o a r d s " , 1985, p . 1 0 .  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