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The effect of rezonings on property values : a theoretical and empirical examination of the taxation… Tunnicliffe, Kenneth William 1975

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THE EFFECT OF REZONINGS ON PROPERTY VALUES A t h e o r e t i c a l and empirical examination of the taxation of land value increments a t t r i b u t a b l e to rezonings i n the C i t y of Vancouver, B.C. by KENNETH WILLIAM TUNNICLIFFE B.A., U n i v e r s i t y of B r i t i s h Columbia, 1970 A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE i n Business Administration in the Fac u l t y of Commerce and Business Administration We accept t h i s t h e s i s as conforming to the required standard THE UNIVERSITY OF BRITISH COLUMBIA February, 1975 In p r e s e n t i n g t h i s t h e s i s in p a r t i a l f u l f i l m e n t o f the r e q u i r e m e n t s f o r an advanced degree at the U n i v e r s i t y o f B r i t i s h C o l u m b i a , I a g r e e that the L i b r a r y s h a l l make i t f r e e l y a v a i l a b l e f o r r e f e r e n c e and s t u d y . I f u r t h e r agree t h a t p e r m i s s i o n f o r e x t e n s i v e c o p y i n g o f t h i s t h e s i s f o r s c h o l a r l y p u r p o s e s may be g r a n t e d by the Head o f my Department o r by h i s r e p r e s e n t a t i v e s . It i s u n d e r s t o o d tha t c o p y i n g o r p u b l i c a t i o n o f t h i s t h e s i s f o r f i n a n c i a l g a i n s h a l l not be a l l o w e d w i t h o u t my w r i t t e n p e r m i s s i o n . - , Commerce and B u s i n e s s A d m i n i s t r a t i o n Department o f _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ The U n i v e r s i t y o f B r i t i s h Co lumbia V ancouver 8, Canada Date F e b r u a r y 28, 1975 ABSTRACT In any well-developed urban area where bu i l d i n g s i t e s are i n r e l a t i v e I n e l a s t i c supply, rezonlngs from one type of permitted land use to another become an Important f a c t o r In the supply of urban s i t e s . As a r e s u l t , rezonings can favorably or adversely a f f e c t land values depending upon the type of rezoning. Aside from Federal c a p i t a l gains l e g i s l a t i o n , no other taxation l e g i s l a t i o n attempts to tax away property value increases that r e s u l t from rezonings, the Increases accruing to property owners or developers, not n e c e s s a r i l y through any d i r e c t a ction of t h e i r own. Since, In Vancouver, the power to rezone i s at the d i s c r e t i o n of the Vancouver C i t y Council, t h i s increase i n value i s a r e s u l t of p u b l i c p o l i c y and could therefore be taxed accord-i n g l y . I t i s the purpose of t h i s thesis to examine the t h e o r e t i c a l , h i s t o r i c a l , and empirical aspects of the taxation of land value i n c r e -i ments that r e s u l t from rezonings. The term which i s used throughout the thesis to denote such a taxation scheme i s "betterment levy", a term consistent with much of the l i t e r a t u r e on the subject, e s p e c i a l l y that of B r i t i s h o r i g i n . Based upon a background of urban land theory and the p r a c t i c a l l e g i s l a t i v e experiences of other areas, notably the United Kingdom, an empirical analysis i s c a r r i e d out on the e f f e c t s of rezoning on land values i n the Cit y of Vancouver. A t o t a l of 529 properties were selected f o r study which represent 267 properties of various types which were rezoned during the period 1966-1972 and, as a con t r o l group, 262 properties which were not affected by rezonings during the same i i time period. Assessed values, using the general r o l l , which are a v a i l a b l e f o r each property and which are adjusted to r e f l e c t non-arm'r; length property transactions were used as the value base. "The s t a t i s t i -c a l technique employed f o r data analysis was regression a n a l y s i s . E s s e n t i a l l y three analyses were undertaken: to determine the r e l a t i o n s h i p between assessed and market values, to determine the over-a l l e f f e c t s of rezoning on property values, and to determine the e f f e c t of s p e c i f i c types of rezoning on value. B a s i c a l l y , the r e s u l t s showed a close r e l a t i o n s h i p between assessed and market values, the o v e r a l l importance of rezonings on property value, and, most s i g n i f i c a n t l y , the importance of the s p e c i f i c type of rezoning on value. F i n a l l y , the implications of these f i n d i n g s and the recommendations and l i m i t a t i o n s derived therefrom are presented as a guide to policy-makers i n applying the r e s u l t s to p o s s i b l e p o l i c y d ecisions. i i i TABLE OF CONTENTS Chapter I. Introduction 1 A. Authorization and J u s t i f i c a t i o n 1 B. The Nature of Value 3 C. The P r i n c i p l e of Betterment 8 D. Outline of Remaining Procedures 13 Footnotes 15 Chapter I I . H i s t o r i c a l and Contemporary Economic Theory: Methodology 16 A. H i s t o r i c a l Perspective of the Theory of Rent 17 B. Economic Rent i n a Contemporary Setting 19 C. S i t e Value Taxation and Betterment 23 D. Welfare Economics and Marginal Cost P r i c i n g 29 E. The Incidence of Taxation 33 F. Conclusion 36 Footnotes 37 Chapter I I I . Experience with Betterment L e g i s l a t i o n A. B r i t i s h Experience - Past and Present B. Johannesburg's Betterment Levy C. Betterment Experience i n Vermont and Hawaii, U.S.A. D. Recent Ontario L e g i s l a t i o n E. Land Use Contracts F. Conclusion Footnotes ~ 39 39 45 46 47 48 49 51 i v Chapter IV. Empirical Analysis 52 A. I n i t i a l S election of Study Properties 52 B. Assessment Pra c t i c e s 54 C. S t a t i s t i c a l Technique - Regression Analysis 57 D. The Assessed Value and Market Value Relationship 62 E. E f f e c t s of Rezonings on Property Values 63 F. Rel a t i v e E f f e c t of Rezoning by Type 65 G. Conclusion 68 Footnotes 69 Chapter V. Conclusions and Implications 70 A. Summary of Empirical Analysis 71 B. Taxation Incidence 72 C. Implementation Procedures 74 D. Compensation 76 E. Legal and Administrative A p p l i c a t i o n 78 F. Limitations of the Study 80 G. Summary of Findings and Recommendations 81 Footnotes 82 Bibliography 83 V Appendixes 90 Appendix to Chapter I 91 Appendix to Chapter IV 93 A. Hypothesis Testing by Regression Analysis 93 B. The Dummy Variable 94 C. Analysis of Variance (ANOVA) 95 D. Combined E f f e c t s of Type and Zoning 97 E. Pertinent Zoning Regulations - Excerpts from Zoning and Development By-Law No. 3575 99 F. Printouts f o r Rezoning Types 144 0 v i LIST OF TABLES Table I. Vancouver - Population and Taxable Assessment -1890 - 1915 27 I I . Matrix of I n i t i a l Pre and Past Rezoning Types 53 I I I . Revised Matrix of Pre and Post Rezoning Types 61 IV. Regression of Assessed Value on Market Value 63 V. O v e r a l l E f f e c t s of Rezoning 64 VI. Rezonings by Type 64 VII. E f f e c t of the Type of Rezoning 65 VIII. Relative Importance of Rezoning by Type, 1965 - 1974 66 IX. Average Yearly Percentage Change i n Value, 1965 - 1974 67 v i i LIST OF FIGURES Figure 1. Consumer Surplus 20 2. Incidence of a Fixed Tax 21 3. Incidence of a S i t e Value Tax Under Conditions of Perfect I n e l a s t i c i t y 24 4. S i t e Values and Outlay 28 5. Substitution and Income E f f e c t s i n the Case of a P r i c e Rise 31 6. The E l a s t i c i t y of Demand 34 7. The E l a s t i c i t y of Supply 35 8. Properties of Linear Regression Line 58 ACKNOWLEDGEMENT Throughout the preparation of t h i s thesis I have become indebted to many people, a debt which can only be repaid by my gratitude f o r t h e i r e f f o r t s on my behalf. In p a r t i c u l a r , thanks are extended to the s t a f f members of the various departments o l the Cit y of Vancouver with which I had contact: Finance, Planning, Assessment (which has since become a P r o v i n c i a l concern), and the Cit y of Vancouver Archives. Special thanks are extended to Mr. P i e r r e Windal f o r his valuable assistance with the s t a t i s t i c a l a n a l y sis. F i n a l l y , I would l i k e to acknowledge the assistance and guidance I received from my advisor, Dr. M.A. Goldberg. CHAPTER I INTRODUCTION A. Authorization and J u s t i f i c a t i o n * On Thursday, October 11, 1973, i n a memorandum to the Finance Committee of Vancouver C i t y Council, Alderman Jack V o i r i c h proposed that an "added value" tax be l e v i e d on the increase i n property values that have resulted from the rezoning of property to a higher use. " I t i s a well-known f a c t that such rezonings often r e s u l t i n an increase to the market value of the land which i s twice, three times or four times the o r i g i n a l value. This increase i n value i s created by the com-munity. In f a c t , rezoning to a higher use i s the greatest g i f t that the C i t y can give to an owner or developer. The only portion of the increased value that accrues to the com-munity i s that obtained through increased property taxes, which usually does not o f f s e t the other costs to the community that have resu l t e d because of the rezoning, such as increased d e n s i t i e s , transportation I n i t i a l l y , i t was hoped to include i n t h i s study other types of p u b l i c a c t i v i t i e s which could give r i s e to increases i n property values such as curbing and paving schemes, street l i g h t i n g , playground f a c i l i t i e s , etc. Depending upon the s p e c i f i c case, such i n f r a s t r u c t u r e placement can have an impact on property values. How-ever, an i n t e r n a l report, no longer a v a i l a b l e , prepared f o r the Assessment Department of the C i t y of Vancouver i n the early 1960's, showed that i n b u i l t up areas such as Vancouver which have been served to at l e a s t minimally accepted urban standards (paved s t r e e t s , l i g h t i n g , sewers, e t c . ) , the upgrading of these f a c i l i t i e s (e.g. new pavement) has a generally n e g l i g i b l e e f f e c t on property values and since that time, and therefore throughout the duration considered i n t h i s study, such factors have not been included i n property assessment values. Also, the C i t y has not engaged i n any major i n f r a s t r u c t u r e development (freeways, rapid t r a n s i t , etc.) except f o r some b e a u t i f i c a -t i o n projects which have l e d to higher taxes f o r the s p e c i f i c properties benefited. 2 problems, and other needed p u b l i c f a c i l i t i e s . With regard to the areas that have been downzoned, Alderman V o l r i c h suggested that compensation need not be considered when such actions are i n the i n t e r e s t s of the community although downzonings undertaken with any other motive than public i n t e r e s t i n mind may give r i s e to claims f o r compensation. The recommendation was made f o r the Director of Finance to report on the implications of an "added value" tax and i t i s from t h i s recommendation which t h i s report comes. The term that w i l l be used i n the remainder of t h i s thesis to s i g n i f y the "added value" tax w i l l be "betterment levy". While "added value" tax tends to be associated, with a form or turnover of sales tax, and usually r e f e r s to a tax on f i n a l consumer expenditure, the "betterment levy" term i s more consistent with the l i t e r a t u r e on the subject, e s p e c i a l l y that of B r i t i s h o r i g i n . While other terms such as land value increment tax have been used to denote the same thing, the betterment levy seems to more c l e a r l y define the meaning at hand. The term betterment has been used i n several ways. "In the narrow sense, betterment means the increase i n the value of neighbouring property brought about by a p a r t i c u l a r improvement, such as the 2 construction of a new s t r e e t . " The Uthwatt Committee i n Great B r i t a i n , whose task i t was to report on the various aspects of compensation and betterment, used the broader sense " to mean any increase i n the value of land (including the buildings thereon) a r i s i n g from c e n t r a l or l o c a l government actio n , whether p o s i t i v e , e.g., by the execution of p u b l i c works or improvements, or negative, e.g., by the imposition of 3 r e s t r i c t i o n s on other land." Whatever d e f i n i t i o n i s used, the p r i n c i p l e 3 remains the same and i t i s the p r i n c i p l e that gives r i s e to the hypothesis f o r t h i s thesis that: "Since the power to rezone i s at the d i s c r e t i o n of the Vancouver Ci t y Council, any increases i n property value that r e s u l t from a d e c i s i o n to rezone should accrue to the C i t y . " This hypothesis implies two things: 1. that rezonings do i n f a c t have an influence on property values and 2. that the City i s j u s t i f i e d i n i t s claim to any increased values that have resulted from rezoning decisions. I t w i l l be an aim of t h i s thesis to examine these assumptions. B. The Nature of Value ' v-Already, the term "value" has been used a great deal throughout t h i s discussion and yet no d e f i n i t i o n has been attempted. Value means many things to many people. "...both the concepts of value and the technique of i t s proof are decidedly influenced by the s p e c i f i c purpose 4 f o r which the v a l u a t i o n i s made." When an a s s e t . i s purchased, i t s purchase p r i c e becomes a matter of record and depreciation may be deducted to determine book value (with the p o s s i b l e exception of land). S i m i l a r l y , the sales p r i c e of an asset i s of importance. For insurance purposes, perhaps the replacement cost of the asset would be considered. Assessed values are used f o r taxation purposes while to the i n d i v i d u a l homeowner, value might be indicated by the money paid i n compensation f o r the loss of h i s property or the p r i c e h i s property might bring i f offered for sale on the open market, two concepts which are not n e c e s s a r i l y r e l a t e d . Value has long been synonymous with the term 4 "market value" which i s taken to mean, at l e a s t i n appraisal terms, that p r i c e estimated i n terms of money that a property w i l l bring between a w i l l i n g buyer and a w i l l i n g s e l l e r dealing at arms length, and allowing an adequate time f o r market exposure. However, even t h i s d e f i n i t i o n i s fraught with such ambiguities as what i s " w i l l i n g " and how long i s "adequate?" Even the term value i s questionable f o r , as R a t c l i f f has pointed out, to determine what a property w i l l bring on the market, one i s not r e a l l y concerned "...with some abstraction c a l l e d "value" but with a transaction p r i c e - the number of d o l l a r s which a buyer would pay to a s e l l e r to acquire t i t l e to the property. Thus when we say market value, we r e a l l y mean market p r i c e . . . . Wendt has suggested that: " I t i s generally agreed that the value of urban land r e s u l t s from the discounting of future net incomes a t t r i b u t a b l e to urban land by v i r t u e of i t s l o c a t i o n . " ^ The theory of urban land, he f e e l s , may be simply stated but i s d i f f i c u l t to apply i n that property y i e l d s are the r e s u l t of combinations of labor, c a p i t a l , •'; and entrepreneural services and therefore problems of Imputation a r i s e . In what way i s one component r e l a t e d to the others and of what importance i s each component i n r e l a t i o n to theeothers? Since l o c a t i o n i s of such c r i t i c a l importance i n the dec i s i o n of what type of improve-ment to place on a p a r t i c u l a r s i t e , the dec i s i o n made w i l l be based upon maximizing the s i t e ' s net returns a f t e r some allowance " f o r a return on and amortization of the investment i n improvements."^ The expectation of r i g h t s to future returns of whatever form, a process of discounting since future returns are not worth as much as i f they were currently a v a i l a b l e , i s fundamental to the understanding of market values of urban s i t e s . 5 To further i l l u s t r a t e his theories on urban land value, Wendt presents a t h e o r e t i c a l model taking into consideration and d i s t i n g u i s h i n g between factors which a f f e c t the value of i n d i v i d u a l s i t e s and those which a f f e c t aggregate values w i t h i n a c i t y as a whole. I t should also be recognized that s p e c i f i c f a c t o r s may vary depending upon the c l a s s i -f i c a t i o n of urban land, a point which implicates the e f f e c t of zoning on land values. In the aggregate, land values are represented by average future expected aggregate net annual urban land rent divided by some c a p i t a l i -zation rate (this model i s formulated i n the appendix to chapter 1). In other words, the numerator represents a r e s i d u a l net income a f t e r allowances for various costs. Expected revenues are broken down into various components which could have an e f f e c t such as investors' expectations as to population, average amount of incomes spent f o r urban servi c e s , the competitive p u l l of the urban area, the supply of competitive urban land, and the prospective investment i n p u b l i c improve-ments. I t must be remembered that these revenue components have been generalized to a l l urban areas and these f a c t o r s may vary i n importance. S i m i l a r l y , cost expectations may include the sum of a l l l o c a l property taxes, operating costs, i n t e r e s t on c a p i t a l invested i n present and future improvements, and depreciation allowances on present and future improvements. The c a p i t a l i z a t i o n r a t e , the denominator, i s influenced by i n t e r e s t r a t e s , allowances f o r expected r i s k and expectations concerning c a p i t a l gains, again depending upon the i n d i v i d u a l case at hand. In may cases these components are beyond the manipulation of the investor. For example, i n the C i t y of Vancouver, land i s always valued 6 to r e f l e c t i t s highest and best use as permitted by zoning, so that i n the case of a rezoning, the land component would r e f l e c t the change i n use even i f the improvement represented a non-conforming use a f t e r the rezoning. Taxes i n general may r e f l e c t other s o c i a l , p o l i t i c a l , or economic trends beyond immediate influence. Wendt's model does not attempt to Isolate any one fac t o r i n recognition, no doubt, of the interdependence of a number of d i f f e r e n t forces,.and does not specif f i c a l l y mention zoning as being one of the v a r i a b l e s . This f a c t does not negate the usefulness of the model f o r t h i s study but, on the contrary, by inference of the importance of l o c a t i o n d i r e c t l y involves the concept of the zoning by-law. In the past, the zoning by-law has served several purposes, but two p r i n c i p a l r o l e s emerge: 1. to protect established areas from unwanted land uses and 2. as a regulatory instrument, to guide or control the development of pos s i b l e future established areas. The l e g a l power to pass zoning by-laws i s outlined i n Part XXVII of the Vancouver Charter e n t i t l e d "Planning and Development." I t seems l i k e l y that such by-laws had t h e i r o r i g i n p a r t l y i n the common law of nuisance and were formulated for the protection of e x i s t i n g property values. It has been suggested that the value of land depends d i r e c t l y upon the use permitted by the l o c a l authority. "What land i s worth depends upon what use may be made of i t , and t h i s depends upon the g planners." "Planners", i n the sense used here, should not be taken too l i t e r a l l y but could include a l l those p u b l i c o f f i c i a l s engaged a c t i v e l y i n the zoning process. The im p l i c a t i o n of t h i s statement i s that p u b l i c o f f i c i a l s have the only voice i n determining land value and t h i s , of 7 course, i s erroneous. Many p r i v a t e decisions also a f f e c t land value, and the p r o p o s i t i o n i s not simply " e i t h e r - o r " : e i t h e r development i s allowed or i t i s not. However, the point to consider i s that without proper zoning, at l e a s t as f a r as the developer i s concerned, an i n d i v i d u a l s i t e cannot achieve i t s peak value. Therefore, larger gains could be expected from property which has the proper zoning necessary fo r whatever type of development i s desired. The supply of competitive urban land i s included i n Wendt's t h e o r e t i c a l model of land value, and bears b r i e f mention. Within urban areas, the supply of vacant land a v a i l a b l e f o r development i s l i m i t e d and declines each year. Therefore, the demolition of e x i s t i n g b u i l d i n g s , e i t h e r f o r redevelopment i n the same use with a more modern structure or fo r redevelopment of a d i f f e r e n t use r e q u i r i n g a change i n zoning, becomes an important f a c t o r i n the supply of s i t e s . The concept of e l a s t i c i t y w i l l be discussed i n chapter 2, but s u f f i c e i t to say f o r now that, i n general, the supply of urban land i s f a i r l y i n e l a s t i c , that i s , the response to a change i n p r i c e does not e l i c i t a large change i n the supply of land, an understandable response given the long l i f e of r e a l property r e l a t i v e to other commodities. However, i f land supply i s i n e l a s t i c , land ser v i c e s , such as the permitted use of the land, become more e l a s t i c as pressure f o r rezoning b u i l d s . Zoning., therefore, becomes a service i n the sense that permission to rezone becomes another fa c t o r i n determining the supply of urban s i t e s f o r development and w i l l a f f e c t e l a s t i c i t y . Value, as a concept, has been shown to be a very complex term, not e a s i l y categorized. As Wendt's model i n d i c a t e s , value i s comprised 8 of a number of components which would vary i n importance depending upon the goals and expectations of the i n d i v i d u a l investor as w e l l as the s o c i a l , economic, and p o l i t i c a l trends a f f e c t i n g an area i n aggregate. Value i s e x t r i n s i c to the object, that i s , i n the minds of people, of the society. Less abstract i n i t s a p p l i c a t i o n , but important i n i t s own e f f e c t on land value, i s the zoning by-law as administered by the elected and delegated o f f i c i a l s of a community. Although t h i s discussion i s s p e c i f i c a l l y concerned with rezonings and the e f f e c t on land values, the concept i s s t i l l of s o c i a l proportions, i n the broad sense, and i t i s upon the p r i n c i p l e of the s o c i a l e f f e c t on land value upon which the concept of the betterment levy i s based1. C. The P r i n c i p l e of Betterment Betterment was previously defined to r e f l e c t two d i f f e r e n t con-texts: the narrower meaning to r e f l e c t property value increases due to a s p e c i f i c improvement and the broader meaning to r e f l e c t any a c t i v i t y decided upon by some ce n t r a l authority to a f f e c t property values. The meaning of betterment has not remained the same over time, e s p e c i a l l y with regard to the B r i t i s h experience, but the above two d e f i n i t i o n s i n no way c o n f l i c t with the past evolution of betterment. O r i g i n a l l y the term was used to describe increased values a t t r i b u t a b l e to public works such as str e e t improvements, creation of parks, etc., where a levy was imposed on the owners of s p e c i f i c s i t e s which would b e n e f i t . This scheme of taxation was based upon the p r i n c i p l e that i f government performs some s p e c i f i c service from which the community as a whole receives n e g l i g i b l e b e n e f i t , there i s no j u s t reason f o r the community as a whole to contribute to i t . This i s perhaps the l e a s t objectionable 9 a p p l i c a t i o n of the betterment levy. The remaining forms of betterment of h i s t o r i c a l i n t e r e s t tend to be more abstract and more c o n t r o v e r s i a l . The f i r s t of these was brought to l i g h t i n nineteenth century England as i n d u s t r i a l growth and rapid population increases caused s i t e values to increase through no a c t i v i t y of property owners, and which was considered unearned. I t was f e l t . t h a t these increases could be taxed away without harm to the economy. One of the main proponents of such a tax was Henry George who advocated a si n g l e tax on s i t e values, a t o p i c which w i l l be discussed i n a l a t e r section. In a sense, i t i s unfortunate that s i t e value taxation has been associated with the betterment levy i n that the emotion.surrounding s i t e value taxation as a base f o r l o c a l taxation tends to cloud the main issue: that the betterment levy i s u s u a l l y proposed as a supplement to the current tax base and does not intend to replace i t and stand on i t s own. The second of the more c o n t r o v e r s i a l a p p l i c a t i o n s of betterment was that considered by the aforementioned Uthwatt Committee i n the U.K., and which w i l l be discussed i n f u r t h e r d e t a i l i n the t h i r d chapter. It had become more and more evident that.land values were increasing simply as a r e s u l t of planning permission. In recognition of the new development p o t e n t i a l , t h i s permission would favorably a f f e c t the value of a l l properties included i n the planning scheme, no matter what t h e i r l e v e l s of development at the time. The argument f o r taxing away the unearned increment r e a l i z e d through planning permission i s analagous to that used f o r the c o l l e c t i o n of betterment as a r e s u l t of zoning changes. The authority given to proceed with a development i s not a 10 certainty merely given upon a p p l i c a t i o n f o r permission, but-usually e n t a i l s c a r e f u l s c r u t i n i z a t i o n to ensure that the project i s i n the best i n t e r e s t s of the community and i n accordance with o v e r a l l planning goals. In Vancouver, a change of zoning requires an a p p l i c a t i o n i n wri t i n g to the Di r e c t o r of Planning and the proposal i s reviewed by the Planning Department, the Vancouver C i t y Planning Commission, and f i n a l l y by City Council. Any of these groups may turn down the a p p l i c a t i o n . I f the a p p l i c a t i o n passes, i t must s t i l l be r a t i f i e d at a pu b l i c hearing, and u n t i l such time as the zoning i s changed, any increase i n value due to the p o t e n t i a l development must by nature be speculative. In the U.K., planning permission takes on a broader, more na t i o n a l appearance so that permission to develop i s of importance not only i n one s p e c i f i c area of a c i t y but also throughout the country. Neverthe-l e s s , the p r i n c i p l e i s the same: i n the c i t y , the change of zoning (and therefore'the development) may or may not be allowed, while n a t i o n a l l y , development may occur on one piece of land or on another ei t h e r now, i n f i v e years, or i n twenty-five years. "The present value at any time of the p o t e n t i a l value of a piece of land i s obtained by estimating whether and when development i s l i k e l y to take place, i n c l u d -ing an estimate of the r i s k that other competing land may secure p r i o r turn." This p o t e n t i a l development value was termed a " f l o a t i n g value" because of the i m p o s s i b i l i t y of p r e d i c t i n g with ce r t a i n t y when i t w i l l s e t t l e . Although the increase i n value w i l l never occur on some land, the p o t e n t i a l i s s i i l l p p r e s e n t and many land values r e f l e c t the expectations of i n d i v i d u a l owners. As long as the p u b l i c controls land use through zoning and c e r t a i n planning schemes, value may be s h i f t e d among various properties and may increase or decrease but i s not 11 destroyed. " I f , f o r instance, part of the land on the f r i n g e of a town i s taken out of the market f o r b u i l d i n g purposes by the p r o h i b i t i o n of development upon i t , the p o t e n t i a l b u i l d i n g value i s merely s h i f t e d to other land and aggre-gate values are not s u b s t a n t i a l l y a f f e c t e d , i f at a l l . Nevertheless, the loss to the owner of the land prohibited from development i s obvious, and he w i l l claim compensation for the f u l l p o t e n t i a l development value of h i s land on the footing that, but f o r the act i o n of the pub l i c authority i n deciding that development should not be permitted upon i t , i t would i n f a c t have been used for development."10 As indi c a t e d by the above quotation from the Uthwatt Report, the c o l l e c t i o n of betterment r a i s e s another consideration, that of compensa-t i o n . I t would appear that the j u s t i f i c a t i o n f o r the betterment charge i s the t h e o r e t i c a l inverse of compensation. • "Where values go up we may speak of "betterment"; where they go down we may speak of "worsement". These are changes i n values caused by the regulatory and constructional a c t i v i t i e s of the p u b l i c a u t h o r i t i e s . The problem i s whether, when and how a share of betterment should be secured by the au t h o r i t i e s and a share of worsement borne by them i n the form of compensation."11 It was suggested i n the i n i t i a l proposal that no compensation should be paid f o r downzonings that are i n the p u b l i c i n t e r e s t , but where does one draw the line? What are the c r i t e r i a to be used i n determining the meaning of " i n the p u b l i c i n t e r e s t " as r a t i o n a l i z a t i o n f o r the payment or non-payment of compensation? The main problem faced by many betterment schemes i n the past, and one that was handled d i f f e r e n t l y to compensate f o r t h i s by the Uthwatt Committee, was i n determining with any.degree of ce r t a i n t y which properties had increased i n value as a r e s u l t of government a c t i v i t y , and i f that could be determined, how much of the value increase was a t t r i b u t a b l e to t h i s action. While t h i s question w i l l be considered 12 i n the empirical analysis, another r e l a t e d problem a r i s e s : that of government con t r o l over the a l l o c a t i o n of resources i n the market. Except i n a completely c e n t r a l i z e d economy, the market works as a r a t i o n -ing device, a l l o c a t i n g resources among competing uses. In t h i s case there i s a c o n f l i c t of, on the one hand, taxing away increases i n property value, and, on the other hand, keeping the market working. Ofecourse, should a government decide on a "no-growth" p o l i c y , the implications of the betterment levy may at once be seen. Land w i l l only be sold f o r development i f the owner can r e a l i z e more i n return f o r another use than i t brings with i t s present use. I f the increased value r e a l i z e d upon a change of use i s taxed completely away, i t i s u n l i k e l y that land w i l l be made a v a i l a b l e . To.suggest that the market currently operates f r e e l y would be erroneous. Because of a perceived divergence between s o c i a l and p r i v a t e costs, decisions regarding land use are to a large extent decided by p o l i c i e s of the l o c a l government, hence the use of zoning and planning controls to attempt to minimize s o c i a l costs. P r i v a t e property r i g h t s have gradually been eroded as p u b l i c c o n t r o l over land use has been extended. The market has f o r some time been operating w i t h i n l i m i t s i n s e l e c t i n g the most p r o f i t a b l e scheme a v a i l a b l e so there i s l i t t l e j u s t i f i c a t i o n f o r regarding the present market system as opera-t i n g within a t o t a l l y l a i s s e z - f a i r e atmosphere. The problem facing l o c a l o f f i c i a l s i s not whether they are i n f r i n g i n g upon market forces, that has already been done, but rather how much importance i s to be placed on market workings. C l e a r l y a d i f f e r e n t s o l u t i o n or emphasis w i l l be made depending on the answer. While the objective i s e s s e n t i a l l y p o l i t i c a l , 13 obviously the mechanism f o r s o l u t i o n should not be. To repeat, the betterment levy i s seen as a supplement to the ex i s t i n g tax base. Taxation provides a powerful means f o r influ e n c i n g the nature of development and, i n the case of the betterment levy, the rates l e v i e d w i l l a f f e c t land use decisions. The other question which occurs i s when to levy the charge: p e r i o d i c a l l y throughout the l i f e of the property, at transfer of the property, or some other a l t e r n a t i v e . I f l e v i e d at the time of tra n s f e r , the burden.would probably f a l l no more heavily on land which was held over many years and land which was transferred more frequently, but t h i s i s s t i l l uncertain. New schemes, whether f o r taxation or f o r other purposes, often r a i s e more questions than they answer and, i n f a c t , the betterment levy has already done so -questions that w i l l be considered throughout the study. D. Outline of Remaining Procedures To t h i s point, the attempt was made to set the betterment levy i n context: by es t a b l i s h i n g that there may be j u s t i f i c a t i o n f o r c o l l e c t i n g betterment from s o c i a l l y created values and by reviewing some of the past d e f i n i t i o n s of betterment and the questions they r a i s e . The second chapter w i l l focus on,some economic considerations of value and taxation such as the theory of economic rent, work i n s i t e value taxation and marginal cost p r i c i n g , and the concept of e l a s t i c i t y i n r e l a t i o n to the incidence of taxation (can the e f f e c t s of a tax be s h i f t e d elsewhere and, i f so, by how much and to whom?). The t h i r d chapter w i l l review r e l a t e d l e g i s l a t i o n both i n other countries, notably Great B r i t a i n , and i n other areas of Canada, such as Ontario's speculation tax. The fourth chapter centres on the empirical analysis i n r e l a t i o n to the concept of betterment of s p e c i f i c concern to t h i s study: the ' e f f e c t of rezonings on property values i n Vancouver. Two types of properties w i l l be studies: those af f e c t e d by rezonings during the period 1966 - 1972 and a co n t r o l group, unaffected by rezoning during the same period, which w i l l allow an estimation of the secular, or ongoing, trend i n property values within the c i t y . The f i n a l chapter w i l l summarize the p r i n c i p a l f i n d i n g s of the empirical study. From these f i n d i n g s , a serie s of recommendations w i l l be presented, not only through the t h e o r e t i c a l j u s t i f i c a t i o n but also through the appropriate i n s t i t u t i o n a l s e t t i n g f o r t h e i r proper admin-i s t r a t i o n . • In conclusion, the weaknesses of the study w i l l be presented to allow p o l i c y makers to i d e n t i f y where, and how much, judgement they must exercise i n applying the r e s u l t s to actual p o l i c y decisions. 15 Chapter I Footnotes 1. Jack V o l r i c h , Memorandum to the Finance Committee, October 3, 1973, Vancouver, B.C. 2. Ralph Turvey. The Economics of Real Property. (London: George A l l a n & Unwin, 1957) p. 103. 3. Report of the Expert Committee on Compensation and Betterment (Uthwatt Report), Cmd. 6386, H.M.S.O., 1942. para. 260, p. 105. 4. James C. Bonbright. The Valuation of Property, 2 v o l s . (New York: McGraw-Hill, 1937), 1:45. 5. Richard U. R a t c l i f f . Valuation f o r Real Estate Decisions. (Santa Cruz: Democrat Press, 1972), p. 11. 6. Paul F. Wendt. "Theory of Urban Land Values." Land Economics, v o l . XXXIII, No. 3, August 1957. p. 229. 7. Ibid, p. 230. 8. Ralph Turvey. "The Rationale of Rising Property Values." Lloyds  Bank Review, No. 63, January, 1962, p. 34. 9. Uthwatt Report. Para. 23, p. 14. 10. Ibid. Para. 26, pp. 15-16. 11. Turvey. "The Rationale of Rising Property Values," p. 35. 16 CHAPTER II HISTORICAL AND CONTEMPORARY ECONOMIC THEORY: METHODOLOGY A topic of s u f f i c i e n t importance to be included in.conjunction with i t s r e l a t i o n s h i p to betterment i s that of the distinctionnbetween two d i f f e r e n t concepts of rent: annual property rent and economic rent. Annual property rents are simply f a c t o r payments f o r the use of land and constitute the d e f i n i t i o n of rent that would most quickly come to mind. In Great B r i t a i n , the property tax i s based upon the income, expressed i n annual r e n t a l terms, obtained from the property. Economic rent i s a term which i s les s often considered but which i s perhaps of much greater importance. "More p r e c i s e l y , economic rent i s defined i n one of two ways: I t i s either the return received by a fact o r i n excess of what i t would receive i n i t s second-best employment, or i t i s income received by a productive resource i n excess of the payment required to keep i t i n i t s present use.""'" In the case at hand, either d e f i n i t i o n could be re l a t e d to land but t h i s need.not always be so and, i n f a c t , the concept of economic rent can be generalized to include a l l f a c t o r s of production i n i n e l a s t i c supply. Based upon the above d e f i n i t i o n , i f the fa c t o r ' s supply were not i n e l a s t i c , that i s , i f the fa c t o r had a l t e r n a t i v e uses, the owner could change the quantity offered i f part of the r e n t a l return were captured through taxation. The taxation of economic rent i n cases of les s than perfect i n e l a s t i c i t y of supply, w i l l adversely a f f e c t the a l l o c a t i o n of resources. For a l l intents and purposes, the supply of urban land i s i n e l a s t i c , i f e l a s t i c i t y of supply can be defined as the degree of responsiveness of the amount of a good supplied (in percentage terms), such as land, to a given percentage change i n the competitive p r i c e . Due to the nature of r e a l property, i f property taxes are increased, s i t e s w i l l not be withdrawn from the market since the tax l i a b i l i t y of the landowners would not be affected by doing so. Economic rent, then, i s an important concept which w i l l be shown to a f f e c t the incentives f o r the organization of production and thereby the entrepreneurial returns. This may or may not be considered a worthwhile objective. A b r i e f discussion, notwithstanding the extensive l i t e r a t u r e , of economic rent covering both h i s t o r i c a l and contemporary viewpoints w i l l be presented to both follow the evolution of the subject and to show further relevance to betterment taxation. A. H i s t o r i c a l Perspective of the Theory of. Rent The theory of land rent has had a considerable h i s t o r y , so that by the end of the eighteenth century, many of the e s s e n t i a l features of the subject had been drawn. Adam Smith extended the works of e a r l i e r t h e o r i s t s into a general synthesis and was the f i r s t to r e l a t e rent and economic growth. He viewed land "rent as a surplus above a l l other costs, the s i z e depending j o i n t l y upon the demand f o r a g r i c u l t u r a l products and the various costs of production as a f f e c t e d by s o i l f e r t i l i t y and l o c a t i o n a l advantages. To Smith, t h i s surplus or unearned income,represented a means of r a i s i n g p u b l i c revenue through the taxation on the rent of the land. Because of the nature of the economy at the time, which was l a r g e l y a g r i c u l t u r a l , discussions of land rent and the taxation of t h i s "surplus" income tend to be centred on a g r i c u l t u r a l land. 18 Perhaps the name most c l o s e l y associated with the theory of land rent was that of David Ricardo (1772-1823). Again, Ricardo's system centres around an a g r i c u l t u r a l base. To Ricardo, land had two important c h a r a c t e r i s t i c s which d i f f e r e d from other factors of production: i t ; i s l i m i t e d i n quantity and i t i s a.free g i f t of nature, therefore any rent derived from the land i s a surplus. "Rent i s that portion of the produce of the earth which i s paid to the landlord f o r the use of the 2 o r i g i n a l and i d e s t r u c t i b l e powers of the s o i l . " To set the context for hi s theory, Ricardo suggested that no rent would be paid for land upon the f i r s t s e t t l i n g of a country i n which there i s no s c a r c i t y of land, for no one would pay rent on land i f other equally desirable land was a v a i l a b l e . I t i s only when i n f e r i o r land i s brought into production that rent i s paid on the land of f i r s t q u a l i t y . " I t i s only, then, because land i s not unlimited i n quantity and uniform i n q u a l i t y , and because, i n the progress of population, land of an i n f e r i o r q u a l i t y , or less advanta-geoulsy situated i s c a l l e d i n t o c u l t i v a t i o n , that rent i s ever paid for the use of i t . . . . With every step i n the progress of population, which s h a l l oblige a country to have recourse to land of a worse q u a l i t y , to enable i t to r a i s e i t s supply of food, rent, on a l l the more f e r t i l e land, w i l l r i s e . " ^ The rent obtained would be calculated upon the d i f f e r e n c e of the produc-t i v e capacity of the land of the highest q u a l i t y and each succeeding type of marginal, or i n f e r i o r , land. Since marginal land i s of poorer q u a l i t y , more labor would be required to bring i t into production. The value of the produce, i n terms of p r i c e , i s r a i s e d because of the increase i n labor costs, on t h i s type of land. Ricardo recognized that beyond a c e r t a i n point, the introduction of another unit of labor would not add to the productive capacity of the land but rather r e s u l t e d i n diminishing returns as each extra u n i t was applied. In a crude way, Ricardo introduced the p r i n c i p l e of marginal p r o d u c t i v i t y to land. Ricardo's r a t h e r r i g i d t h e o r i e s of h i s o v e r a l l model opened him to much c r i t i c i s m and some m o d i f i c a t i o n of h i s b a s i c t h e o r i e s by such notables as John Stuart M i l l . Land rent was no longer considered s o l e l y the r e s u l t of s o i l f e r t i l i t y and p r o d u c t i v i t y , becoming l e s s important i n the p r o d u c t i v e process as n o n - a g r i c u l t u r a l f o r c e s began to exert themselves i n the economy of the day. Ricardo's assumption of h i s t o r i c a l l y d i m i n i s h i n g r e t u r n s to l a b o r was discarded as e m p i r i c a l evidence to the c o n t r a r y was produced. B. Economic Rent i n a Contemporary S e t t i n g Modern t h e o r i s t s have begun to consider unearned income as a question of e t h i c s - the r i g h t to enjoy income as a r e s u l t of unforeseen and u s u a l l y u n i n i t i a t e d developments. A l s o considered i n contemporary thought i s the long-run adjustment of resources to changes i n demand where p r i c e equals average cos t s . However, costs are r e f l e c t e d by the a l t e r n a t i v e uses, as governed by demand, to which resources may be put. "In making h i s d e c i s i o n the developer i s faced w i t h a l t e r n a t i v e p o s s i b l e uses which he can provide and a l t e r n a t i v e ways of p r o v i d i n g f o r them and w i l l employ the concepts of p r o p o r t i o n i n g the f a c t o r s of p r o d u c t i o n , of 4 s u b s t i t u t i o n , c a p a c i t y and e f f i c i e n c y . " I n d i v i d u a l developers are r a r e l y considered to the e x c l u s i o n of other developers and i n f a c t tend to be aggregated. In c o n s i d e r i n g the r e s u l t s of s p e c i f i c p o l i c y d e c i s i o n s the o v e r a l l e f f e c t o f , f o r example, the supply of land o f f e r e d f o r a p a r t i c u l a r use would be g e n e r a l i z e d and the a l t e r n a t i v e uses f o r the resource would be fewer i n number, as a r e s u l t of t h i s g e n e r a l i z a -t i o n . To analyze a surplus c o n d i t i o n , the use of economic rent should ( 20 r e a l l y be c l o s e l y r e l a t e d to the s p e c i f i c problem at hand. "In contemporary theory, economic r e n t , no longer iden-c\*f.,3.T\wtical w i t h l a n d - r e n t , i s viewed in, a number of d i f f e r e n t ways and the amount v a r i e s a c c o r d i n g l y . The payment f o r the use of land r e c e i v e d by the owner which i s i n excess of the amount which would be re c e i v e d i n i t s next-best use i s economic r e n t , or a l t e r n a t i v e l y , the excess over that r e q u i r e d to keep the land i n i t s present employment. From the p e r s p e c t i v e of the i n d i v i d u a l f i r m or user of la n d , the f u l l payment i s r e q u i r e d to keep the land away from competition and there i s no economic r e n t . " 5 A concept which Ricardo probably would soon have grasped i s that of consumer s u r p l u s , surpluses being c l o s e l y a s s o c i a t e d w i t h economic r e n t . E s s e n t i a l l y , consumer surplus i s defined as the d i f f e r e n c e between the amount the consumer would be w i l l i n g to pay f o r a p a r t i c u l a r good and the amount he a c t u a l l y pays. This concept i s presented i n Figure 1, where OABC represents the consumer's o u t l a y , or t o t a l revenue of the producer, and CBD the su r p l u s . Each successive u n i t that the consumer purchases costs only as much as the l a s t u n i t , the e a r l i e r u n i t s being worth more than the l a s t , under c o n d i t i o n s of di m i n i s h i n g marginal u t i l i t y . The surplus r e s t s on the e a r l i e r u n i t s which the consumer values more. When the consumer no longer r e c e i v e s a s u r p l u s , he stops buying. The t r i a n g l e CBD, then, represents t r . Figure 1 Consumer Surplus p n C . S . X . c v. T. R. A Q the t o t a l amount the consumer would be w i l l i n g to pay i f forced to do so on an a l l or nothing ba s i s . The lower the p r i c e , the greater the consumer's surplus - the consumer i s able to buy a greater array of goods at lower p r i c e s . The reverse s i t u a t i o n works i n favor of the producer who l o g i c a l l y would t r y to r a i s e p r i c e s enough to bring out the l a s t (marginal).unit, creating f o r him a surplus on the f a c t o r s already i n use f o r production. The e f f e c t of taxation p o l i c i e s on both consumer and producers surpluses can e a s i l y be diagrammed, as i n JBigure 2^, which represents the market f o r some commodity. A tax i s imposed, but to s i m p l i f y the de s c r i p t i o n and to i s o l a t e the e f f e c t s of the tax, i t i s assumed there i s no concurrent s h i f t i n demand and nothing else a l t e r s the supply curve. Figure 2 Incidence of a Fixed Tax The i n i t i a l demand curve i s represented by DD and the i n i t i a l supply curve SS, with equilibrium at point A. With a tax imposed on the s e l l e r s , the supply curve w i l l s h i f t to the l e f t as the s e l l e r s attempt to pass the tax to the consumers, the new supply curve being S'S' and the new equilibrium p r i c e being B, r e f l e c t i n g the amount of the tax per u n i t . At point B, l e s s i s offered on the market as 2 2 indicated by the movement from X^ to X^, but at a higher p r i c e F^. The s e l l e r s attemptsd- to pass on the tax to the buyers but were not completely successful. I f before the tax,.the s e l l e r s needed a p r i c e of at l e a s t Po, then a f t e r the tax they must charge ¥ ^  to r eceive the same net p r i c e as before imposition of the tax. I n i t i a l l y , buyers , paid a p r i c e of P^ and now pay P^. The part of the .tax paid by the con-sumer i s therefore P,, minus P.^  while the s e l l e r s pay P.^  minus Po. B-D equals the consumer's share while D-C equals the producer/ 1 s share. The tax y i e l d equals of P 0 C B P 2 , but the reduction i n both producers and consumers surplus i s the amount PoCABP^, which i s greater, than the tax revenue, i n d i c a t i n g t h i s tax may not be p a r t i c u l a r l y e f f i c i e n t i n reducing surpluses, as witnessed by the r e s i d u a l CAB. The r e l a t i o n s h i p between rent and surpluses has dominated much of the past thought on tax p o l i c y . Taxes on surpluses a f f e c t the decisions of suppliers to the extent that i f they are free to do so, they w i l l withdraw, or reduce, t h e i r services from the market, e s p e c i a l l y i f by so doing they can reduce the tax l i a b i l i t y . The taxa-t i o n of economic rent, or surpluses, depending upon the viewpoint, would tent to a f f e c t entrepreneurial incentive. Assuming the surplus to land could be determined, and was then taxed e n t i r e l y away, there would be no advantage to land ownerships. " I f , . . . , the tax a u t h o r i t i e s set rates below highest r e n t a l values, although s u b s t a n t i a l c a p i t a l losses would be incurred, some incentives f o r ownership would remain. But the tax a u t h o r i t i e s would f i n d i t necessary c o n t i n u a l l y to r e v i s e the rates upward as newer and better uses for the land were found. Consequently, any unusual gains accruing to the landowner would be short l i v e d , and the incentives to " t r a n s f e r " land into i t s best use would.be blunted."^ As w i l l be shown, a reduction of t h i s incentive occurred i n B r i t a i n 23 i n the l a t e '40's and early '50's when a development charge of 100% was l e v i e d against development r i g h t s , a term corresponding to the surpluses discussed. The r e s u l t was a breakdown i n the market u n t i l such time as the levy was revised. Based upon the above discussion, i t must be apparent that rent as defined i s an ambiguous term. On the one hand, surplus income represents an i d e a l target f o r taxation, e s p e c i a l l y i f the surplus i s unexpected, since unexpected income does not provide motivation, and i f the resource i s i n i n e l a s t i c supply so as not to be withdrawn from use. On the other hand, i t has been shown that economic rent can provide a motivating force and it's taxation could a f f e c t the a l l o c a t i o n of resources. Expected rents or returns play a large part i n the market and d i r e c t l y influence decisions. Furthermore, the i d e n t i f i c a t i o n and measurement of what i s and what i s not considered rent would depend upon the i d e n t i f i c a t i o n of future expectations under conditions of r i s k and uncertainty, a d i f f i c u l t i f not impossible task. By considering other t h e o r e t i c a l and p r a c t i c a l cases, perhaps greater i n s i g h t may be reached. C. S i t e Value Taxation and Betterment Perhaps no other form of t a x a t i o n has aroused such passionate advocates, and equally passionate opponents, as s i t e value taxation. As Dick Netzer points out: " S i t e value taxation has been presented not only as a panacea f o r urban land use but also as a cure f o r unemployment, a p r e v e n t i t i v e f o r i n f l a t i o n , and a guarantor of perpetual i n d u s t r i a l g and i n t e r n a t i o n a l peace." The more serious proponents of s i t e value taxation believe i t w i l l have the following b e n e f i t s : 24 1. encourage b u i l d i n g and r e h a b i l i t a t i o n ; 2. discourage land speculation; 3. reduce urban sprawl; 4. reduce the unearned increment; 5. reduce the cost of land; 6. r e d i s t r i b u t e the tax load among land uses. While each of these proposals deserves mention, the focus w i l l concent-rate on the r e l a t i o n s h i p of s i t e v a l u a t i o n and the reduction of the unearned increments. No other name has been more c l o s e l y associated with s i t e value taxation than that of Henry George C1839-97), although as stated, he was not the f i r s t to recognize that the unearned surplus provided a target for taxation. George's theories are s i m i l a r to Ricardo's i n that the marginal p r o d u c t i v i t y of land plays an important r o l e i n both. I t was George's b e l i e f that the rent of land should be taxed away from the i n d i v i d u a l and given to the state providing s u f f i c i e n t revenue to abolish a l l other taxes. The def i c i e n c y of t h i s " s i n g l e tax" proposal i s at once apparent since even a 100% tax on rent would be i n s u f f i c i e n t to meet current government expenses. Under conditions of i n e l a s t i c supply as shown i n Figure 3 , the 9 Rent Figure 3 D Incidence of a S i t e Value Tax Under Conditions of Perfect I n e l a s t i c i t y D ' .0 Quantify of land. 25 en t i r e burden of the tax i s meant to f a l l on the landowner. If a tax of 50% i s l e v i e d against a l l rents, or the y i e l d of a f i x e d supply of urban land, there w i l l be no s h i f t i n the t o t a l demand f o r land since consumers would be w i l l i n g to pay only the same amount f o r an un-changed supply of land. The market p r i c e i s the same, at E, because r ; supply and demand have not changed. If the p r i c e were r a i s e d , under competitive conditions, there would be a reduction i n the demand f o r land and some would therefore go unwanted. The e f f e c t of the tax on the landowners would then be the same as i f net demand had s h i f t e d from DD to D'D' and net return reduced from E to E', the tax being s h i f t e d backward to the landowners. However, i f the p a r t i c u l a r f a c t o r of production i s not completely i n e l a s t i c , as shown i n Figure 2, at l e a s t a part of the tax burden would be s h i f t e d forward to the consumer. The assumption that the landowner would bear the whole burden and would not s h i f t any part must c e r t a i n l y be questioned. Current advocates of s i t e value taxation disassociate themselves and t h e i r theories from those of Henry George whose si n g l e tax proposal i s considered an a d d i t i o n a l burden on s i t e values, while s i t e v a l u a t i o n i s meant as a means of c o l l e c t i n g l o c a l revenues on a more equitable basis. E s s e n t i a l l y , s i t e value taxation c a l l s f o r the untaxing of improvements (buildings, etc.) coupled with a heavier taxation of the land. The e f f e c t s of the system can be examined by observing the r a t i o s of improvement value and land value. If i t can be assumed that a small c i t y might have land values assessed at $10 m i l l i o n and improve-ment values assessed at $20 m i l l i o n , the r a t i o of improvement values to land values would be 2:1. The r a t i o f o r that c i t y would be 2, which 26 represents a d i v i d i n g l i n e . Every property having a r a t i o of 2 would pay the same taxes under either the present property tax system or . under the s i t e value system. However, under the s i t e value system, owners of properties having r a t i o s above the c i t y average of 2 would have t h e i r taxes reduced while properties with a r a t i o below the c i t y average would have i t s taxes r a i s e d . Taxes are therefore not increased i f the owner improves the property nor are they reduced i f i t i s allowed to deteriorate. Vacant s i t e s have a r a t i o of 1:1. B r i t i s h Columbia adopted such a system toward the end of the nineteenth century and by 1914 about 2/3 of a l l m u n i c i p a l i t i e s , i n c l u -ding Vancouver, were exempting improvements from taxation. However, the trend since that time has been to increase taxes on improvements so that today i n B.C., m u n i c i p a l i t i e s tax improvements on 75% of assessed value f o r school purposes and up to 75% f o r municipal purposes. S i t e value taxation was imposed at a time of great prosperity i n the Canadian west and was not able to prevent the tremendous land speculation that occurred at the same time. Land speculation occurred i n s p i t e of s i t e value taxation. Holding costs of land increase under s i t e v a l u a t i o n , encouraging owners to b u i l d on t h e i r properties, a condition which occurred at the time, although the general a i r of prosperity as a r e s u l t of rapid growth was probably a greater stimulant (See Table I ) . 27 Table I Vancouver - Population and Taxable Assessment - 1890-1915 Taxable Year Population Assessment 1890 12,000 9,404,445 1895 17,862 18,147,384 1900 24,750 19,553,645 1905 45,000 28,543,890 1910 93,700 106,454,265 1915 97,995 224,202,883 Source: Vancouver Directory, 1973. Both Pennance and Finnis"*"^, although i n d i f f e r e n t contexts, recognize the same basic point: that land w i l l be developed only when i t i s economically f e a s i b l e to do so, regardless of the type of taxa-t i o n . Land that i s held vacant or at s u b s t a n t i a l l y lower usage than i s most p r o f i t a b l e can be released from that p o s i t i o n upon payment of the market p r i c e . This point i s further corroborated by Turvey: "In general, areas where rents are p a r t i c u l a r l y high show a. greater b u i l d i n g density and have higher s i t e values than the rest of the . ^ town.""''"'" Some users, he f e e l s are w i l l i n g to pay a high premium f o r the a c c e s s i b i l i t y u sually offered by the high rent s i t e . The i n d i c a t i o n i s that s i t e values w i l l vary with rent l e v e l s , high rents making dense b u i l d i n g p r o f i t a b l e and s i t e s valuable. Presumably, t h i s observa-t i o n would hold true no matter what the type of taxation. If b u i l d i n g at high density were not p r o f i t a b l e on the low rent s i t e without s i t e value taxation, there i s no reason to suppose the opposite would be the case under s i t e value taxation, thus r e i t e r a t i n g the argument of -Pennance and F i n n i s . 28 In Figure 4, he i l l u s t r a t e s how density w i l l be greater where rent l e v e l s are higher by considering two p h y s i c a l l y i d e n t i c a l s i t e s , A i n the high rent area, and B located elsewhere. "Because of the d i f f e r e n c e i n rent l e v e l s i n the two areas and the absence of any major d i f f e r e n c e i n b u i l d i n g costs, i t can be assumed that the average net returns curve f o r s i t e A w i l l l i e above the average net returns curve f o r s i t e B f o r the whole of i t s length. It follows that the marginal net returns curve f o r A ^ w i l l probably be higher f o r the whole of i t s length...." I f the opportunity cost rate of i n t e r e s t , OU i n Figure 4, i s the same i n both cases, there w i l l be a greater outlay of JK on the high rent s i t e . I f the type of b u i l d i n g i s the same, as to use, the b u i l d i n g on s i t e A w i l l be t a l l e r or have greater s i t e coverage. Figure 4 S i t e Values and Outlay 0 K outlay Density w i l l be greater where land rents are higher. Because the annual value of the high rent s i t e as represented by UVWY i s greater than the low rent s i t e , URST, high rents w i l l make denser b u i l d i n g more p r o f i t a b l e . Location, and thereby a c c e s s i b i l i t y , as stressed previously, plays a key r o l e i n the determination of value and s i t e value taxation w i l l not n e c e s s a r i l y cause a s i t e to be developed to i t s highest use. 29 One fundamental premise of s i t e value taxation i s that the incidence of the tax f a l l s on the owner and cannot be s h i f t e d , diminishing the s i t e value by the c a p i t a l i z e d amount of the tax and lowering land p r i c e s . As shown above, t h i s point remains questionable. It would seem that the e f f e c t s of the imposition of s i t e value taxation to capture the unearned increment are somewhat l i m i t e d and that some of the claims made f o r the system would not wholly be the r e s u l t of introducing such a system, such as the curbing of speculation and the f o s t e r i n g of development. This i s not to say that none of the claims f o r s i t e v a l u ation are v a l i d , not only that some of the claims, without further study, are questionable. D. Welfare Economics and Marginal Cost P r i c i n g The p r o v i s i o n of p u b l i c goods and ser v i c e s , whether a rapid t r a n s i t system, a park, or the permission to redevelop property, by nature causes a divergence between p r i v a t e and s o c i a l costs. "The p e c u l i a r nature of p u b l i c goods i s that t h e i r consumption i s n e c e s s a r i l y j o i n t : the more there i s f o r one household, the more not the le s s there 13 i s f o r any other." The quantity of p u b l i c goods supplied i s not a market decision but i s p o l i t i c a l . Because most public goods and services, unlike rezonings, benefit the general community, t h e i r cost i s borne by a l l taxpayers, there being no question of charging b e n e f i c i a r i e s and compensating those harmed by some scheme. However, because of t h i s divergence between the p r i v a t e and s o c i a l costs of providing p u b l i c ser v i c e s , the question s t i l l a r i s e s as to the means of recovering these government expenditures. In t h i s regard, one group of t h e o r i s t s wishes to a l l o c a t e taxes, and government expenditures, i n such a way as to minimize the aggregate s a c r i f i c e and maximize the aggregate welfare of the community. The condition f o r meeting t h i s c r i t e r i o n was believed s a t i s f i e d i f p r i c e equalled marginal cost. The p r o v i s i o n of p u b l i c services i s then a l o g i c a l extension of the welfare approach to taxation. Theorists have proposed two basic p o l i c y p r i n c i p l e s : "The f i r s t i s that resources should be d i s t r i b u t e d among d i f f e r e n t public uses so as to equalize the marginal return of s a t i s f a c t i o n f o r each type of outlay. The second i s that p u b l i c expenditures should be pushed to the point where the s a t i s f a c t i o n obtained from the l a s t d o l l a r expended i s equal to the s a t i s f a c t i o n l o s t from the l a s t d o l l a r taken i n taxes. Thereby, the marginal s a t i s f a c t i o n derived i n the^public and p r i v a t e sectors i s equalized."14 The concept of marginal u t i l i t y theory was pioneered i n the mid-nineteenth century by Dupuit who sought to measure the s o c i a l benefit of c o l l e c t i v e goods such as roads, canals, and bridges through the concepts of producers' and consumers' surplus. The p r i n c i p l e i s the same as that.used throughout t h i s discussion of surpluses: that as the amount consumed of a p a r t i c u l a r good increases, the marginal u t i l i t y as measured by the extra u t i l i t y of the l a s t unit tends to decrease. Recent welfare economics proposes to influence s o c i a l consensus by describing how the ends of s o c i a l p o l i c y are re l a t e d to p a r t i c u l a r r e l a t i o n s h i p s with the p o l i c y means. Blaug sums up the current thought as follows: "Between any two goods (products and f a c t o r s ) the subjective and t e c h n i c a l marginal rates of s u b s t i t u t i o n must be equal f o r a l l households and a l l production u n i t s , r e s p e c t i v e l y , and these subjective and t e c h n i c a l r a t i o s must equal one another."15 Marginal r a t e of s u b s t i t u t i o n i s defined as the amount of Y the consumer 31 i s j u s t w i l l i n g to give up to get an a d d i t i o n a l u n i t of X without changing h i s l e v e l of u t i l i t y . In the 1930's, H o t e l l i n g revised and updated Dupuit^s work and bases his arguments upon the p r o v i s i o n of and r a t e charged f o r p u b l i c u t i l i t i e s such that "...the optimum of the general welfare corresponds 16 to the sale of everything at marginal cost." He f e e l s the best way to operate a u t i l i t y , whether bridge, r a i l r o a d , or whatever, i s to make i t f r e e to the public as long as i t s use does not cause an overcrowding of the service. Society, he f e e l s must pay for the u t i l i t y , say a bridge, i n some way but gets more benefit i f i t i s f r e e while charging a t o l l w i l l cause some people to seek a l t e r n a t i v e and probably longer methods of crossing. "There i s no such damage i f the bridge i s paid f o r by income, inheritance, and land taxes, or f o r example by a tax on the r e a l estate benefited, with exemption of new improvements from taxation, so as not to i n t e r f e r e with the use of the land. The d i s t r i b u t i o n of wealth among the members of the.community i s affected by the mode of payment adopted f o r the bridge, but not the t o t a l wealth, except that i t i s diminished by bridge t o l l s and other s i m i l a r forms of excise. This phenomenon may be diagrammed i n the following way: y Figure 5 Substitution and Income E f f e c t s i n the Case of a P r i c e Rise 32 Assume the consumer has two choices as to the route he may take to a p a r t i c u l a r d e s t i n a t i o n as characterized by h i s i n i t i a l budget l i n e of LM, governed by h i s income. At M he spends a l l h i s a l l o t e d income on route X while at L he spends i t a l l on route Y, equilibrium being reached at point A on i n d i f f e r e n c e curve Ii, which represents d i f f e r e n t combinations of the two.routes about which the i n d i v i d u a l i s i n d i f f e r e n t . I f a t o l l , which i s the same as a tax, i s l e v i e d on route X, the e f f e c t i s to reduce expenditures on route X as witnessed by the s h i f t to LM'. The consumer suf f e r s a decline i n r e a l income, as indicated by the movement to a lower i n d i f f e r e n c e curve, 1^- The t o t a l e f f e c t , then, can be broken into two sub-effects: the s u b s t i t u t i o n e f f e c t and the income e f f e c t . To i s o l a t e the s u b s t i t u t i o n e f f e c t , assume the consumer were given an amount of a d d i t i o n a l income to compensate what would otherwise be a l o s s : to enable him to remain on the o r i g i n a l i n d i f f e r e n c e curve. This may be shown by constructing the l i n e CC which i s p a r a l l e l to LM', and therefore i n the same r a t i o , but tangent to 1^ . The s u b s t i t u -t i o n e f f e c t i s represented by the movement to the new a r t i f i c i a l e quilibrium p o s i t i o n of D with the reduction i n the use of route X measured by ^ X ^ u n i t s . The income e f f e c t , the change of income expended on route X as a r e s u l t of the decline i n r e a l income caused by the t o l l , i s represented by the decrease from X^ to a f t e r the s u b s t i t u t i o n e f f e c t has "been accounted f o r . This i s the r e s u l t of the excise tax ( t o l l ) of which H o t e l l i n g speaks. In optimal terms, under conditions of perfect competition, p r i c e equals marginal cost, causing firms to minimize average costs. However, as i s often the case with the p r o v i s i o n of p u b l i c goods, overhead costs 33 may cause marginal cost to be below average costs. H o t e l l i n g vehemently argues against attempting to pay overhead costs out of operating revenue which he f e e l s contributes to i n s t a b i l i t y i n the economic system as a whole. In the case of p u b l i c goods d e f i c i t s are covered by public funds, which r a i s e s problems of administrative procedures. I t i s more conducive to the welfare of a l l i f i t i s not attempted to recover from each enterprise i t s costs r e l a t i v e to i t s services rendered since taxes are not n e c e s s a r i l y c o l l e c t e d from those that b e n e f i t . As was pointed out i n the discussion of consumers' surplus, many users of p u b l i c s e r v i c e s , i f forced to do so, would pay more f o r c e r t a i n services than they a c t u a l l y do. However, "Each i n d i v i d u a l i f l e f t to his own devices, w i l l contribute nothing to public services simply because the t o t a l supply of p u b l i c goods remains unaffected by h i s decision; everyone benefits from p u b l i c goods, whether he pays or n o t . " 1 Again, the argument of Pennance and F i n n i s holds true: that, i n the p r i v a t e sector, i f a project i s economically sound, i t w i l l be under-taken. In the p u b l i c sector, i f everyone concerned i s better o f f with the new investment than without, i t should be undertaken on s o c i a l grounds with everyone "coerced" into paying hi s share of the cost (since most pu b l i c goods show a divergence between p r i v a t e or s o c i a l c o s t s ) . The consumer's choice, therefore, does not n e c e s s a r i l y r e f l e c t the s o c i a l optimum and i t i s l e f t to government ac t i o n to improve the general welfare. E. The Incidence of Taxation One concept which has been .mentioned i n conjunction with other theories of taxation i s that of the incidence of taxation. A 34 d i s t i n c t i o n should be made between the formal incidence, (who the taxation scheme i s attempting to tax) and the e f f e c t i v e incidence (who the taxation scheme eventually taxes). In other words, given the problem of tax s h i f t i n g backward and forward, who i s a c t u a l l y paying the tax? Tax s h i f t i n g depends upon the e l a s t i c i t i e s of demand and supply of land and should not be overlooked i n the taxation process. There are, therefore, two separate f a c t o r s of e l a s t i c i t y to consider: demand and supply. Taking demand into account f i r s t , con-19 sider the following diagrams: P o Figure 6 The E l a s t i c i t y of Demand 35 In each case of Figure 6, S i s the pre-tax supply curve and the post-tax supply curve while D i s the demand curve. Although the e l a s t i c i t y of supply remains the same i n each case, the e l a s t i c i t y of demand v a r i e s from very e l a s t i c (a), unitary e l a s t i c i t y (b) (si m i l a r to Figure 2), and very i n e l a s t i c . In each case, the tax rai s e d equals AFHC with BCHG borne by the "f i r m " while ABGF i s s h i f t e d to the con-sumer. The excess, FHE, i s shared by both groups depending upon the e l a s t i c i t y of demand. I t i s apparent that the greater the e l a s t i c i t y of demand, the le s s e r amount of s h i f t i n g w i l l occur. 8n the supply side, D remains constant while the e l a s t i c i t y of supply changes i n response to the tax: / Si \ / . S If 7 / Figure 7 The E l a s t i c i t y of Supply 36 In t h i s case, the greater the e l a s t i c i t y of supply, the greater the degree of s h i f t i n g , as witnessed i n 7-a which shows e l a s t i c supply and the greatest amount of s h i f t i n g (ABGF to BCGH) and 7-c showing i n e l a s t i c supply and the l e s s e r amount of s h i f t i n g . "Supply e l a s t i c i t y , then, tends to increase forward s h i f t i n g and demand e l a s t i c i t y tends to 20 reduce forward s h i f t i n g . " The implications of the concept of taxa-t i o n incidence, and therefore e l a s t i c i t y of demand and supply, are considerable and must be c a r e f u l l y weighed when considering the objectives of any taxation p o l i c y . Where does the burden f a l l ? P. Conclusion This chapter has attempted to focus on some of the economic considerations of value and taxation i n r e l a t i o n to the problem of betterment. The evolution of att i t u d e s regarding economic rent and taxation has a d i r e c t bearing on the perception of such topics as viewed by current standards. Surpluses such as economic rent, while seemingly providing an i d e a l target f o r taxation, have also been shown to d i r e c t l y a f f e c t entrepreneurial incentive. F i n a l l y , the e l a s t i c i t y of supply and demand was discussed i n r e l a t i o n to the incidence of taxation, an important consideration f o r any.taxation scheme. 37 Chapter II Footnotes 1. Joseph S. Keiper et. a l . Theory and Measurement of Rent (Toronto: Ambassador Books, 1961), p. 106. 2. David Ricardo. The P r i n c i p l e s of P o l i t i c a l Economy and Taxation. (London: J.M. Dent, 1960), p. 33. 3. Ibid, p. 35. 4. Nathaniel L i c h f i e l d . Economics of Planned Development. (London: The Estates Gazette, Ltd. , 1956), p. 75. 5. Keiper et. a l . , p. 110. 6. See, f o r example, Keiper et. a l . , p. 118 or Michael J . Brennan. Theory of Economic S t a t i c s . (Englewood C l i f f s : P r e n t i c e - H a l l , 1970), pp. 97-100. 7. Keiper et. a l . , p. 123. 8. Dick Netzer. Economics of the Property Tax. (Washington: The Brookings I n s t i t u t i o n , 1966), pp. 197-98. 9. Based upon Paul A. Samuelson and Anthony Scott. Economics, An  Introductory Analysis. (Toronto: McGraw-Hill, 1966), pp. 584-587. 10. F. G. Pennance. Housing Town Planning and the Land Commission. (London: I n s t i t u t e of Economic A f f a i r s . Hobard Paper 40, 1967), pp. 34-35 and F.H. F i n n i s . " S i t e Valuation and Local Government." Canadian Tax Journal. V ol. 11, No. 2, pp. 123-124. 11. Turvey. The Economics of Real Property, p. 52. 12. Ibi d . 13. M. Blaug. Economic Theory i n Retrospect. (Homewood, I l l i n o i s : McGraw-Hill, 1959), pp. 548-549. 14. Richard A. Musgrave. The Theory of Public Finance. (New York: McGraw-Hill, 1959), p. 113. 15. Blaug. pp. 543-544. 16. Harold H o t e l l i n g . "The General Welfare i n Relation to Problems of Taxation and of Railway and U t i l i t y Rates." Econometrica. V o l . 6, No. 3, 1938. p. 242. 17. Ibid, p. 261. 18. Blaug.-p. 549. 38 19. Based upon Charles M. A l l a n . The Theory of Taxation. 1 (Hammonds-worth, England: Penguin Books Ltd., 1971), pp. 45-60. 20. Ibid, p. 56. 39 CHAPTER I I I EXPERIENCE WITH BETTERMENT LEGISLATION The concept of betterment i s by no means t o t a l l y t h e o r e t i c a l , but rather has a long and v a r i e d p r a c t i c a l history." Many past schemes to c o l l e c t betterment are extremely complex and i t would not be p o s s i b l e or p r a c t i c a l to discuss each case i n d e t a i l . However, because many past, and more recent, experiences have at l e a s t an i n d i r e c t relevance to t h i s study, the main provisions of a number of these schemes w i l l be offered f o r comparison. I t w i l l be seen that p o l i t i c a l expediency, e s p e c i a l l y i n Great B r i t a i n , has played'a large part i n determining the longevity of betterment l e g i s l a t i o n . Notwithstanding the p o l i t i c a l aspect of capturing betterment, the awakening r e a l i z a t i o n of society's r o l e i n the creation of land values, and the l e g i s l a t i o n e i t h e r enacted or under consideration, i s creating a phenomenon that bears watching. A. B r i t i s h Experience - Past and Present In B r i t a i n , the recognition of the r o l e of p o s i t i v e p u b l i c a c t i o n i n increasing land values has been evident since 1427 when an Act empowered the Commissioner of Sewers to levy s p e c i a l rates on those properties which benefited by p a r t i c u l a r sea defense works. This p r i n c i p l e was also applied, under the. name of "melioration," i n the r e b u i l d i n g of London a f t e r the Great F i r e . Up u n t i l the Town and Country Planning Act of 1947, with c e r t a i n exceptions, betterment was linked d i r e c t l y to compensation or, perhaps more p r e c i s e l y , "worsement." Because the B r i t i s h experience i n t h i s regard i s so vast, only the main l e g i s l a t i o n w i l l be c i t e d . 40 Various Acts throughout the nineteenth century had provided f o r the c o l l e c t i o n of betterment, but not u n t i l the Housing and Town Planning Act of 1909, which allowed l o c a l a u t h o r i t i e s to c o l l e c t a betterment levy of 50% of the increase i n land values which resulted from planning schemes, was betterment applied i n a general p u b l i c act. Under t h i s Act, betterment was c o l l e c t e d as a d i r e c t charge on those lands which had increased i n value as a r e s u l t of negative r e s t r i c t i o n s imposed by planning schemes on the use of other lands. These p r o v i -sions were repeated i n the Town Planning Act of 1925. However, because of a system of deferred payments and the d i f f i c u l t y of defining and c o l l e c t i n g betterment, i n only three cases was cash a c t u a l l y received f o r the payment of betterment charges.. The Finance (1909-10) Act, 1910, applied four kinds of land taxes, one of which, the increment value duty, attempted the taxation of increased assessed values (20%) over the o r i g i n a l s i t e value upon the sale of the land, i t s lease f o r more than fourteen years, or the death of the owner. However, y i e l d s proved to be disappointing and the scheme was eventually abandoned. Other Planning Acts had intervened a f t e r 1909, but the most important change from past Acts occurred with the passing of the Town and Country Planning Act of 1932 where the amount of betterment that could be claimed rose from 50 to 75 perceent. The provisions f o r the c o l l e c t i o n of betterment seemed somewhat a r b i t r a r y . "... the period of time within which the claim could be lodged was extended from three to twelve months from the date of approval of the planning scheme (or such longer period as might be s p e c i f i e d ) . Or the twelve months might run from the date of completion of the work which gave r i s e to the b e t t e r -ment claim. On the other hand under c e r t a i n circumstances the owner could have the claim deferred, or even waived altogether. Where no claim f o r compensation existed at l e a s t equal to the amount of betterment, such an owner could require the claim to be deferred u n t i l i n f a c t the betterment had been r e a l i s e d , through development, sa l e , etc. And i f t h i s did not occur within fourteen ^ years of the o r i g i n a l date the claim lapsed completely." The provisions f o r compensation were a l t e r e d s l i g h t l y from previous Acts, but were s t i l l not too c l e a r . The p r i n c i p l e of "good neighbourliness" was applied to those cases where compensation was not paid f o r planning r e s t r i c t i o n s which were deemed to be i n the best i n t e r e s t s of the community. Included i n t h i s l i s t of p r o h i b i t i o n s were provisions f o r pr e s c r i b i n g the space requirements around b u i l d i n g s , t h e i r height or character, or any l i m i t a t i o n s on the number of buildings allowed i n a p a r t i c u l a r development as w e l l as any b u i l d i n g operations that might be i n j u r i o u s to health. However, i t was not possible to prescribe minimum frontages without paying compensation. These provisions remained i n e f f e c t throughout the 1930's and during the war years, but were repeatedly c r i t i c i z e d as depending too much on l o c a l authority resources ( i t must be remembered that t h i s Act was nationa l i n scope) so that one l o c a l authority might incur heavy compensation costs f o r p r o h i b i t i n g c e r t a i n developments while a neighbouring authority might allow the same land uses. The most comprehensive discussion of betterment was ca r r i e d out by the Expert Committee on Compensation and Betterment, the Uthwatt Report of 1942. In addition to the question of f l o a t i n g value already mentioned, the report recognized two other f a c t o r s which had affected planning i n the 1930's: e 1. the high value of c e n t r a l c i t y s i t e s which tended to d i s -courage redevelopment schemes because of the high l i a b i l i t y f o r compensa-t i o n by l o c a l a u t h o r i t i e s and 42 2. the f r a c t i o n a l i z e d ownership of c e n t r a l area properties which had led to d i f f i c u l t i e s i n acquiring properties for redevelopment. In order to overcome these dif f i c u l t i e s j t i t f a e i ^ o r i r m ^ a l l underdeveloped land be acquired by the state at the e x i s t i n g use value and leased to a developer at the future use value which i n e f f e c t means n a t i o n a l i z i n g development r i g h t s . Compensation would be paid to owners to r e f l e c t the l o s t development value at a " f a i r value" so as to avoid overpayment and avoid the f l o a t i n g value problem. Betterment would then be received where the p r i c e or rent paid by the developer exceeded the cost to the state of both the development r i g h t s and the property. For land which had already been developed, i t was recommended that such lands should be subject to compulsory a c q u i s i t i o n (expropriation) when required for redevelopment, the p r i c e not exceeding i t s value on March 31, 1939. In addition to the above: "... i n a l l land other than a g r i c u l t u r a l , including that developed a f t e r the scheme was s t a r t e d , increases i n annual s i t e value, from whatever cause other than that of c e r t a i n recent expenditure by the owner, would be subject to an annual levy of, i t was suggested, 75 per cent. An i n i t i a l v a l u a tion was to set the datum, and a revaluation made every f i v e years."2 This report was not without c r i t i c i s m , e s p e c i a l l y from right-wing p o l i t i c a l groups who f e l t that the n a t i o n a l i z a t i o n of development r i g h t s would u l t i m a t e l y r e s u l t i n t o t a l land n a t i o n a l i z a t i o n . E s s e n t i a l l y , the Town and Country Planning Act of 1947 followed the Uthwatt Report's recommendations and n a t i o n a l i z e d a l l development r i g h t s with no development allowed to take place without permission from the l o c a l planning authority, a broad p a r a l l e l to development through rezoning. If permission to develop was refused, no compensation was paid paid, while i f permission was granted a development.charge of 100 per cent was l e v i e d against any r e s u l t i n g increases i n property values that occurred because of the permission. A fund of £>300 m i l l i o n was established, a p o r t i o n of which could be paid to those property owners who f e l t t h e i r property had some development value, but which did not receive development permission, as of an appointed 1948 date. Of course t h i s i s only a b r i e f summary of the provisions, but the p r i n c i p l e s are clear,. In f a c t , t h i s scheme did not work too smoothly. I t was hoped that a rate of 100% would r e s u l t i n p r i c e s being paid f o r land .-V *.v .-' that more c l o s e l y resemble e x i s t i n g use values rather than development values, but t h i s was not the case. "The basic d i f f i c u l t y was that purchasers of land were compelled to pay a premium above the e x i s t i n g -use value i n order to persuade an owner to s e l l : a development charge of 100 per cent therefore constituted a permanent addition to the cost 3 of development." The previous Acts were passed by the Labour governments and were promptly repealed by the Conservatives i n 1953 and replaced by the Town and Country Planning Act of 1954. In e f f e c t , t h i s l e g i s l a t i o n created two values f o r land based upon whether i t was acquired through the open market or by public authority. F u l l market p r i c e was paid i n the former case while 1947 e x i s t i n g use value (plus any loss of 1947 development value) was paid i n the l a t t e r , not a very s a t i s f a c t o r y s i t u a t i o n . Betterment was l e f t to general taxation while the p r i n c i p l e of "good neighbourliness" f o r compensation was again applied. This Act was followed by another i n 1959 which restored market value as the basis f o r compensation when property was expropriated. Again development 44 r i g h t s were vested i n the state. Labour was returned to power i n 1964 and introduced both a c a p i t a l gains tax i n the 1967 Finance Act and a new betterment levy i n the 1967 Land Commission Act. The d i f f e r e n c e i n concept between the two schemes i s i n t e r e s t i n g : the c a p i t a l gains tax i s charged on increases^of current use value of land (income) while betterment i s recaptured on increases i n development value (community-created). The Land Commission Act, a very complex piece of l e g i s l a t i o n , took e f f e c t on A p r i l 6, 1967 and d i f f e r s from the 1947 Act i n two ways: 1. a l l development value i s not taken but rather an i n i t i a l rate of 40 per cent i s charged, l a t e r to be increased to 45 and 50 per cent, although the time period i s not s p e c i f i e d ; 2. that although the levy would normally be paid by the s e l l e r , i f some r e s i d u a l development value was s t i l l i n existence a f t e r a sale (.e.g. i f the property were sold at e x i s t i n g use value plus a small "sweetener" i n a n t i c i p a t i o n of development permission) the purchaser would be l i a b l e f o r levy on the r e s i d u a l . Some p u b l i c bodies were exempt from the levy. The base date from which development value increases were determined was A p r i l 6, 1967 which allowed expropriation, i f necessary, at less than market value, avoiding the previous two p r i c e system of the 1954 Act. Although the Conservatives did not oppose the betterment levy i n p r i n c i p l e , i t was viewed i n terms of the 1947 type of n a t i o n a l i z a t i o n . Further objections may be summarized as follows: so " i . I t w i l l i n j e c t -more uncertainty into the market and sosd- deter development. i i . It w i l l reduce the net rewards which a s e l l e r of land might expect and so reduce the supply coming on to the market, r a i s e i t s p r i c e , and gain deter development.'"^ 45 There i s some doubt that the amount returned by the levy, £>21,172,000 a year at i t s peak, would have been much more than that provided by the c a p i t a l gains tax and income tax together. In 1970, a f t e r the e l e c t i o n of a Conservative government, the levy was abolished. A more recent proposal i s under consideration by the new Labour govern-ment, but reports of i t s intentions are sketchy. " B a s i c a l l y , when any development, development scheme or land with planning permission i s sold , the gains from development are to be taxed as income f o r the i n d i v i d u a l and at the corporation tax rate (with no o f f s e t s ) f o r companies instead of as c a p i t a l gains as now.""' The present status of t h i s l e g i s l a t i o n i s not known. B. Johannesburg's Betterment Levy Johannesburg, South A f r i c a , has been c o l l e c t i n g a betterment levy, or as i t i s c a l l e d , a development contribution, o f f i c i a l l y since January, 1966. U n o f f i c i a l l y , betterment was c o l l e c t e d on i n d i v i d u a l properties before t h i s date i f a developer sought approval f o r a higher use rezoning. The development contribution of 50 per cent.of the increase i n value that resulted from the rezoning was l e v i e d by the l o c a l authority on the developer. I t was f e l t that the 50 per cent rate s t i l l l e f t an a t t r a c t i v e increase i n land value to the developer which would not deter development. The o f f i c i a l 1966 levy did not d i f f e r s i g n i f i c a n t l y from the u n o f f i c i a l charge. Once a development scheme had been approved by the l o c a l authority, i t was required that a valuer be appointed who would value a l l properties i n the scheme on the day immediately before the day of approval, followed by a v a l u a t i o n on the day of approval. A 46 development contribution of 50 per cent (or.any l e s s e r percentage the authority may determine) would be l e v i e d against any increase between the pre and post approval dates. The charge i s payable by the registered owner as of the date of approval and must be paid before any transfer of the land can be re g i s t e r e d , or before the property can be put to any use which would have v i o l a t e d the e a r l i e r zoning regulations. However, payments may be made i n instalments over a maximum of three years. Revenues generated by development contributions may be used by l o c a l a u t h o r i t i e s i n meeting any expenditures of town planning a c t i v i -t i e s . In some circumstances, land of an equivalent value to the development contribution may be accepted by the l o c a l aM'thoir.it.y^, and has been done so by the Johannesburg Ci t y Council f o r some road-widening 6 purposes. C. Betterment Experience i n Vermont, and Hawaii, U.S.A. In the State of Vermont, on May 1, 1973, a tax was imposed on any gains r e a l i z e d on the sale or exchange of lands. I n i t i a l l y , t h i s tax was part of a p o l i t i c a l platform of a successful candidate f o r governor/. I t was proposed that tax r e c e i p t s would be used to give property tax r e l i e f f o r farmers, although i n the end, funds were earmarked f o r general! r e l i e f . B a s i c a l l y , the tax: "... applied to the sale or exchange of land only, not bu i l d i n g s , and not to land (up to a c e r t a i n amount) used as the s i t e of a p r i n c i p l e residence. The rate of tax i s vari-. able. For land held less than one year the tax i s 60 per-centage of the gain i f the gain i s 200 per cent or more. The percentage drops as the holding period i s shorter and the gain . less so that a gain of less than 100 percent with property held f o r f i v e to s i x years r e s u l t s i n a tax on f i v e percent of the gain."^ 47 C l e a r l y , t h i s i s an attempt to tax speculative transfers of land. This tax has been held to be c o n s t i t u t i o n a l by the Vermont Supreme Court. The State of Hawaii has considered l e g i s l a t i o n geared s p e c i -f i c a l l y to taxing away gains r e a l i z e d through changes i n zoning as an a d d i t i o n a l base of taxation with e x i s t i n g ad valorem property taxation, s p e c i a l assignments, and user charges. The proposed tax would be l e v i e d on the unimproved s i t e and would tax the increase i n market value that occurred on the day of rezoning and would be l e v i e d only once, at the event of rezoning. In t h i s respect, the rezoning tax proposal seems very s i m i l a r to Johannesburg's development contribution, and i n f a c t i t was recommended that the tax rate be 50 per cent of the increase i n value. Also under consideration were d i f f e r e n t rates for d i f f e r e n t types of rezoning, depending upon which authority (counties or State Land Use Commission) had j u r i s d i c t i o n over the 'cezoning&J" I t i s believed that the implications of such a tax would induce developers to reduce t h e i r e f f o r t s i n obtaining e a r l i e r rezonings than were a c t u a l l y needed, p a r t i c u l a r l y from a g r i c u l t u r a l uses, which might imply a smaller supply of urban land at a higher p r i c e . Whether or not t h i s scheme was enacted i s not known. D. Recent Ontario L e g i s l a t i o n Of s p e c i a l concern i n Ontario recently has been the s p i r a l l i n g cost of land which was l a r g e l y a t t r i b u t e d to f o r e i g n speculators. " On A p r i l 9, 1974, two r e a l estate b i l l s were introduced into the provin-c i a l l e g i s l a t u r e . The f i r s t , the.Land Speculation Tax Act imposes a 50 per cent tax on any p r o f i t s r e s u l t i n g from the sale, option, lease, transfer at death, and change i n control of a partnership or corporation • /jy• . p r o v e d r-;' 48 of unimproved r e a l estate, i n addition to the normal income tax. Exempted properties include p r i n c i p a l residences, p r i n c i p a l r e c r e a t i o n a l property (when sold to a Canadian r e s i d e n t ) , or a family farm (with conditions). The second, the Land Transfer Tax Act imposes a 20 per cent tax on any property acquired by a non-resident of Canada. The tax rate f o r Canadians on the transfer of land remains unchanged at .3 per cent on the, f i r s t $3.5,000 and .6 per cent on the remainder. Both taxes are i n addition to the Federal c a p i t a l gains tax. Apartment buildings may be harder to s e l l under t h i s l e g i s l a t i o n because, f o r a new owner to avoid the tax, he would have to renovate the b u i l d i n g by 20 per cent of the purchase p r i c e before he s e l l s at some future date. This feature could cause d i f f i c u l t i e s f o r a developer'wishing to s e l l a project to an investor, not an uncommon procedure. The longer the intended holding period, the l e s s onerous the tax. C l e a r l y , the speculator's l i f e w i l l be made a l o t more d i f f i c u l t , p a r t i c u l a r l y with quicksale- schemes, and other provinces, notably Quebec and Nova Scotia are considering s i m i l a r types of l e g i s l a t i o n . E. Land Use Contracts One means of c o l l e c t i n g betterment already i n existence i n B.C., i s the land use contract, analagous to Vancouver's CD-I zoning designa-t i o n . P r i o r to 1968, a number of B.C. m u n i c i p a l i t i e s were exacting both cash and c e r t a i n amenity provisions as a p r e r e q u i s i t e to allowing a development to occur. At the time, t h i s p r a c t i c e was seemingly i l l e g a l under the Municipal Act. Considerable i n t e r e s t was shown i n developing a more adequate and innovative means of c o n t r o l l i n g land development and, at the same time, i n l e g a l i z i n g the e x i s t i n g p r a c t i c e . In A p r i l , 49 1971, the land use contract was made a v a i l a b l e through Section 702A of the Municipal Act. Essen t i a l l y , . m u n i c i p a l i t i e s could enter into a contract with developers which would specify the conditions for,the use and development of the land a f t e r a p u b l i c hearing on the subject had been held. Procedural d i f f i c u l t i e s and misunderstandings reduced the g effectiveness of the land use contract. In a recent study, Porter found that processing time f o r 19 contracts studied showed delays of up to two years f o r some contracts to be completed, compared with approximately 6 months for normal rezonings i n Vancouver. Notwith-standing t h i s problem, most planners surveyed f e l t the land use contract, when used i n conjunction with a comprehensive plan, provided a very f l e x i b l e means of c o n t r o l l i n g development. F. Conclusion The p r i n c i p l e of betterment taxation i s not a p a r t i c u l a r l y recent innovation but has evolved over time i n various guises, depend-ing upon the perceived need at the time. The various examples shown above (forms of betterment l e g i s l a t i o n have appeared i n A u s t r a l i a and New Zealand as well) can a t t e s t to t h i s point. Nevertheless, the p r i n c i p l e has remained the same: i t i s u n j u s t i f i a b l e f or landowners to p r o f i t from increased property values that have been created by the community as a whole and not by any p a r t i c u l a r e f f o r t s of the land-owner. That land has exchange value, as an economic good, i s the r e s u l t of i n t e r a c t i o n s of supply and demand, both p r i v a t e and p u b l i c , and i s d i r e c t l y influenced by the impact of p u b l i c land use controls. The i m p l i c a t i o n i s that undeveloped property as w e l l as property to be 50 redeveloped, either from a completely vacant s i t e and i n compliance with e x i s t i n g zoning ordinances or to some higher use through a change i n zoning, f o r example, are both the r e c i p i e n t s of unearned increments. Depending upon the objectives of the betterment l e g i s l a t i o n , then, a l l property value increases independent of s p e c i f i c a c t i v i t i e s of the owner should be taxed. Deviations from the p r i n c i p l e of e q u A l i t y i i n enacting actual l e g i s l a t i o n have depended, and w i l l depend, therefore, on the s p e c i f i c objectives of that l e g i s l a t i o n . 51 Chapter III Footnotes 1. Peter H a l l . Land Values. (London: Sweet and Maxwell, 1965), p. 61. 2. L i c h f i e l d , p. 344. 3. J . B. Cullingworth. Town and Country Planning i n England and Wales. (London: George A l l e n & "Unwin Ltd., 1970), p. 153. 4. Pennance. p. 41. Provides an excellent d e t a i l e d c r i t i c i s m of the 1967 levy. 5. Graham Searjeant. "Property: M i l d R e l i e f , Much Confusion." Sunday Times, 28 A p r i l 1974. 6. For a further discussion, see: Harry Manning. "Johannesburg's Betterment Tax." A u s t r a l i a n Planning I n s t i t u t e Journal. A p r i l 1969, pp. 43-45. 7. Donald Hagman and Dean Misczynski. "Special C a p i t a l and Real Estate Windfall Taxes CSCREWTS) - A Short Story." Paper prepared f o r the B r i t i s h Columbia I n s t i t u t e f o r Economic P o l i c y Analysis Conference on the P r i c i n g of Local Services and E f f e c t s on Urban Spacial Structure, Vancouver, B.C., June 26-28, 1974. 8. B. J . Porter. The Land Use Contract: I t s V a l i d i t y as a Means  of Use and Development Control. Unpublished Masters' Thesis. Un i v e r s i t y of. B.C., 1973. 52 CHAPTER IV EMPIRICAL ANALYSIS The hypothesis of t h i s thesis implied two points: that rezonings influence property values and that there i s some j u s t i f i c a t i o n f o r the recapture of any increases i n value that may be a t t r i b u t a b l e to rezon-ings. The l a t t e r assumption has been considered i n conjunction with both t h e o r e t i c a l models and p r a c t i c a l experience. It w i l l be the purpose of t h i s chapter to examine the former assumption through the analysis of properties a f f e c t e d by various types of rezonings and, as a measure of secular e f f e c t s on property values, a c o n t r o l group of properties which resemble the rezoned group as to pre-rezoning type but which were not themselves rezoned. Questions a r i s e as to the s e l e c t i o n of properties f o r study, the best i n d i c a t o r of property value, the over-a l l e f f e c t s of rezoning, and the s p e c i f i c e f f e c t of d i f f e r e n t types of rezonings, questions which w i l l be considered throughout t h i s chapter. A. I n i t i a l S election of Study Properties Of approximately 100,000 properties w i t h i n the Cit y of Vancouver, only a small number, les s than .5 per cent of the t o t a l number of properties were affected by rezonings i n each of the years 1966-1972. Because of the r e l a t i v e l y small number of properties involved, i n i t i a l l y the e n t i r e population, that i s , 100 per cent of the property rezonings from 1966-1972 (the choice of t h i s time period w i l l be examined i n section B) was considered f o r i n c l u s i o n i n the study. As w i l l be shown, a lack of data f o r a number of properties and a f a i l u r e to meet c e r t a i n s t a t i s t i c a l requirements f u r t h e r reduced t h i s number. Rezonings of a temporary nature were not included i n the i n i t i a l population. The t o t a l number of properties involved with rezonings during the time period considered was 445 which represented 21 d i f f e r e n t rezoning c l a s s i f i c a t i o n s . These c l a s s i f i c a t i o n s are given i n Table II where the t o t a l number of i n d i v i d u a l properties are represented by both pre and post rezoning types. Post-Rezoning RRSil RS-2 RM-3 C-2 CRM-2 M-l /•M-2 CD-I RS-1 87 1 15 42 RS-2 4 1 RT-2 40 18 3 RM-3 13 9 7 C-2 2 1 9 4 1 M-l 49 31 107 2 Table II Matrix of Initial4E*e*.and Post Rezoning Types The i n i t i a l c o n t r o l group was selected to r e f l e c t the pre-zoning category, the s i z e of which depended upon the number of properties i n each re-zoned type. In other words, as c l o s e l y as po s s i b l e , i t was attempted to include as many properties i n the c o n t r o l group as there were properties affected by rezonings. Where the rezoned group was scattered throughout the c i t y , the c o n t r o l group was choseii randomly by pre-rezoning c l a s s i f i c a t i o n . However, i n many instances, large groups of properties were rezoned i n s p e c i f i c areas of the c i t y . Where t h i s was the case, the c o n t r o l group was selected from an adjacent group of properties e x h i b i t i n g pre-rezoning s i m i l a r i t i e s but which had not been rezoned. The r a t i o n a l e f o r the s e l e c t i o n of adjacent properties was based on the b e l i e f that secular forces acting upon a concentration of properties could only be adequately measured by a group of properties which exhibit as c l o s e l y as possible other f o r c e s , except rezonings, infl u e n c i n g property values of the rezoned group. Randomly selected c o n t r o l properties f o r t h i s group would r e f l e c t city-wide trends but might have negated the importance of the l o c a l area. B. Assessment P r a c t i c e s The time horizon with which t h i s study i s concerned, 1966-1972, i s not an a r b i t r a r y s e l e c t i o n of dates, but i s based somewhat upon current assessment p r a c t i c e s and procedures. The assessment r o l l s f o r the C i t y of Vancouver provided the primary sources of information on property values within the c i t y and, as such, require further explanation. Each year, every property i s given an assessed value for taxation purposes which i s based upon permitted use of land and actual use of improvements, l o t s i z e , a v a i l a b l e market!information ( s a l e s ) , etc. Assessed values f o r one year, however, are calculated i n the previous year, using data supplied from the previous complete year. For example, assessed values f o r 1974 are calculated throughout 1973 and w i l l be based l a r g e l y on information from 1972, the l a s t complete year. Assessed values there-fore exhibit a lag of two years from the current year. 1972 was chosen as the upper l i m i t f o r study to enable complete use of a v a i l a b l e assessed values i n comparison with market information, which would be required f o r a n a l y s i s , given the existence of a two year lag i n assessed values. 55 Although 1966 i s the f i r s t year i n which rezonings were studied, i t was desirable to employ a base year, or lower l i m i t , which had not been affected by rezonings of the study properties. This choice was based on the assumption that i f rezonings were s i g n i f i c a n t e , there would be l i t t l e appreciable d i f f e r e n c e i n property values f o r those properties rezoned i n 1966. Subsequent years, that i s 1967-1974, would show only secular, or ongoing, increases i n value and would negate any possible importance of rezonings f o r that year. Because of the nature of the storage f a c i l i t i e s of h i s t o r i c a l data, information p r i o r to the year 1965 i s not r e a d i l y a v a i l a b l e . 1 9 6 5 ? u t i l i z i n g 1963 market data, was therefore chosen as the base year f o r study l a r g e l y because there were few gaps i n the assessed value data, as was not the case i n e a r l i e r years. Property assessments are broken down into two sets of values: land value and improvement value. Once airezoning has occurred, and the Assessment Department has been informed by the Planning Department, any properties involved i n the rezoning are reassessed to r e f l e c t the new permitted use of the land. Improvements are assessed at the current use which i n many cases may mean that improvements r e f l e c t a non-conforming use as may now be permitted by the rezoning. Reassessments from rezonings are lagged two years to remain consistent with general assessment p r a c t i c e s . This means that properties are reassessed on the basis of what the value would have been f o r each s p e c i f i c property two years previously but under the new zoning. For a l l but one section of ana l y s i s , which w i l l be explained, land values were chosen f o r study because land, under current assessment p r a c t i c e s , i s most d i r e c t l y responsive to zoning changes. Improvements, i n many cases, become redundant. Over the years of the study, a number of l e g i s l a t i v e changes have occurred which have affected assessment p r a c t i c e s . From the period 1962-1966, land and improvements were assessed at 50 per cent of actual value, so that a simple arithmetic doubling would give the actual value f o r any property. In 1967, land and improvements were again assessed at 50 per cent of actual value, but a 5 per cent l i m i t a t i o n on increased assessments on i n d i v i d u a l properties was imposed which could a r t i f i c a l l y r e s t r i c t assessed values and would r e s t r i c t the use of such data f o r study purposes. The year 1968 saw the f i r s t use of the dual r o l l , one r o l l f o r school and h o s p i t a l purposes which was subject to l e g i s l a t i v e l i m i t a t i o n s and one r o l l f o r general purposes, not a r t i f i c a l l y l i m i t e d , where land and improvements are assessed at 100 per cent of a c t u a l value. The general r o l l , through 1974, has remained without constraints while the school and h o s p i t a l r o l l has been subject to furth e r l e g i s l a t i v e l i m i t a t i o n s . For t h i s reason, only the general r o l l , where applicable, has been used f o r study purposes. Two factors r e l a t e d to assessment procedures reduced the t o t a l number of properties i n i t i a l l y considered f o r study. The f i r s t f a c t o r i s l a r g e l y an administrative mattEr. Assessment information i s printed on cards which are f r e e l y a v a i l a b l e f o r use by assessors i n the f i e l d . As a r e s u l t , many cards which were required f o r study were not ava i l a b l e f o r prolonged periods, and these properties were excluded from the study. The second f a c t o r i s affected by actual p h y s i c a l changes i n property boundaries. Consolidation of properties i s a f a i r l y common 57 p r a c t i c e whereby a number of smaller parcels of land are merged to create one larger pa-r^e-L. In t h i s case, the sum of the assessed values of the i n d i v i d u a l s parcels of land simply add to r e f l e c t the land value of the new pa r c e l a f t e r rezoning. For t h i s reason, the t o t a l value can be traced h i s t o r i c a l l y . However, i n some cases a r e p l o t t i n g of l o t l i n e s may occur where, f o r example, f i v e i n d i v i d u a l parcels are r e -pl o t t e d to become three larger parcels. In t h i s case, the "new" properties bear no resemblance to the previous p l o t t i n g i n that each of the three larger parcels may contain portions of the o r i g i n a l f i v e . H i s t o r i c a l l y , assessed values can no longer be traced because of a lack of common data. These properties were also excluded. C. S t a t i s t i c a l Technique - Regression Analysis The s t a t i s t i c a l technique used i n the analysis of data i s regres-sion a n a l y s i s . I t i s to be used here, not as a means of p r e d i c a t i o n , but as a method f o r examining the r e l a t i o n s h i p between two v a r i a b l e s (further d e f i n i t i o n s , s t a t i s t i c a l i n t e r p r e t a t i o n , supporting data, etc. may be found i n the appendix to Chapter IV). Two types of r e l a t i o n s h i p s are of i n t e r e s t : 1. that between assessed values and market values and 2. that between, f i r s t l y , a r a t i o of the base year, 1965, values and the most recent values, 1974, to rezonings and secondly, the same r a t i o against a breakdown of rezonings into type. In other words, the second r e l a t i o n s h i p w i l l study the o v e r a l l e f f e c t s of rezonings on property values and the e f f e c t of the type of rezoning on property values. Regression analysis i s w e l l suited to t h i s purpose. The regression equation, Y = A + EX, i s a mathematical model i n 58 which the value of one v a r i a b l e may be s t a t i s t i c a l l y r e l a t e d to the value of the other v a r i a b l e . "The regression curve describes the r e l a t i o n s h i p between any given value of X. .. and the mean Uy.x of the corresponding c o n d i t i o n a l p r o b a b i l i t y distribution<:of Y... Thus, the regression curve indicates the expected (mean) value of the Y v a r i a b l e f o r any given value of the X v a r i a b l e . " ! If the X v a r i a b l e i s taken as the independent v a r i a b l e and Y as the dependent v a r i a b l e , i t i s pos s i b l e , through the regression equation, to determine how Y i s affected by or r e l a t e d to X. This i s termed the regression of Y on X and may be represented diagramatically as i n Figure 8. Properties of Y Linear Regression Line , ^ A y A * = 8 = 5 l o p e The slope of the regression f u n c t i o n indicates the mean change that i s expected i n Y with a unit change i n X. Linear regression, then, i s a technique used to f i n d a straight-l i n e r e l a t i o n s h i p from a set of b i v a r i a t e observations (X and Y), and provides procedures to measure the adequacy of the r e l a t i o n s h i p . A p a r t i c u l a r agent, i n t h i s case an i n d i v i d u a l property, would exhibit two c h a r a c t e r i s t i c s , f o r example, a market value (X) and an assessed value (Y) which could be plotted as a point somewhere on Figure 8. 59 Because of the d e f i n i t i o n of the mathematical model, the regression l i n e must go through the o v e r a l l mean, of the data. Since no point necess a r i l y l i e s d i r e c t l y on the l i n e , and only one l i n e i s required for a n a l y t i c a l purposes, the l i n e producing the "best f i t " i s the one i n which the deviations of each of the,observations from the l i n e i s l e a s t . This may be represented by the l e a s t squares l i n e . "Of a l l l i n e s that can represent the f u n c t i o n a l r e l a t i o n s h i p f o r a given set of b i v a r i a t e observations, the l e a s t squares l i n e i s the one f o r which the sum of the squared deviations of the data from the l i n e i s a minimum. In th i s sense, the l e a s t squares l i n e i s the l i n e of best f i t . " 2 In other words, the plus deviations from the l i n e cancel out the minus daviatio deviations. The smaller the dispersion of observations from the regression l i n e , the smaller i s the expected error i n the regression r e l a t i o n s h i p . A measure of the r e l a t i v e strength of the regression r e l a t i o n s h i p i s M the c o e f f i c i e n t of determination (given by the Greek l e t t e r rho,yO.,:\or 2 more simply as R ). "A c o e f f i c i e n t of determination close to zero indicates that the X v a r i a b l e i s of l i t t l e a d d i t i o n a l help i n p r e d i c t i n g Y. On the other hand, a c o e f f i c i e n t of determination not close to zero i n d i c a t e s only that knowledge of X may be h e l p f u l i n making a us e f u l predic-t i o n of Y, even i f the c o e f f i c i e n t of determination i s close to l . " 3 The c o e f f i c i e n t of determination describes the por t i o n of the variance i n the observations of the dependent (Y) v a r i a b l e , from the o v e r a l l mean, that i s explained by regression a n a l y s i s . A c o n d i t i o n a l p r o b a b i l i t y d i s t r i b u t i o n , as i s the case here where Y (in t h i s example, assessed value) i s the dependent v a r i a b l e , also has a standard deviation c a l l e d a c o n d i t i o n a l standard deviation or the 60 standard error of estimate which measures the v a r i a b i l i t y i n Y f o r a given X. "When a v a r i a b l e i s strongly dependent upon another v a r i a b l e , the standard error of estimate w i l l be much smaller than the standard deviation of the observations of the dependent v a r i a b l e about t h e i r own mean."^ The s i g n i f i c a n c e of the standard error, the degree of disper-sion of the data about the regression l i n e , i s given by the t - s t a t i s t i c . The stronger the r e l a t i o n s h i p between the two v a r i a b l e s , the greater the reduction i n the dispersion. Whenever a sample consists of fewer than 30 observations, as i s the case with many of the s p e c i f i c rezoned categories, a confidence i n t e r v a l estimate of the population mean, a tes t of the accuracy or the range within which a population mean.might be, i s based on the t - s t a t i s t i c . The t - d i s t r i b u t i o n contains the following p r o p e r t i e s : i t i s symmetrical, ranging from minus i n f i n i t y to plus i n f i n i t y ; i t s mean;, i s zero; the variance i s greater than 1, therefore i t i s more spread out than the standard normal d i s t r i b u t i o n ; there i s a d i f f e r e n t t -d i s t r i b u t i o n f o r every sample s i z e ; as the sample increases, the t-distribufcionn approachesstHelstandard normal d i s t r i b u t i o n . The t - s t a t i s t i c , calculated by d i v i d i n g the estimated c o e f f i c i e n t (B, the slope of the regression l i n e ) by the standard error, becomes a u s e f u l t o o l i n the t e s t i n g of the s i g n i f i c a n c e and accuracy of the estimated c o e f f i c i e n t s (or the s t a t i s t i c a l hypotheses of i n t e r e s t ) . One other concept which w i l l be used to test the importance of rezoning both generally and on s p e c i f i c type i s the so-called "dummy-v a r i a b l e , " which bears some introduction. " I t i s perhaps not generally appreciated that the ... regression model can be adapted e a s i l y to deal with 61 nominal v a r i a b l e s , expressed o r i g i n a l l y as eit h e r dichotomies or multichotomies. The device used to accomplish t h i s adaptation consists of defining new pseudovariables or "dummy" v a r i a b l e s , which are binary coded as zero or one."l5> In t h i s case the independent v a r i a b l e (X), zoning, could be recoded as: 1 = rezoned; 0 = not rezoned. By quantifying rezonings t h i s way, and sub s t i t u t i n g into the regression equation, the s i g n i f i c a n c e of the rezoning on property values may be cal c u l a t e d when compared with the t - d i s t r i b u t i o n . Generally, the larger the sample s i z e , the greater the accuracy and the v a l i d i t y of the s t a t i s t i c a l r e s u l t s of tes t s made upon that sample. As previously mentioned, c e r t a i n assessment p r o e i V cedures reduced the number of properties under consideration f o r study. The requirements of regression analysis further reduce t h i s number: i t i s preferable to include at le a s t 20 observations i n each sample under study. In t h i s case, because only one dependent v a r i a b l e , property value, i s under consideration, t h i s number could be reduced to as low as 15 observations, although r e s u l t s could be i n s i g n i f i c a n t . As a r e s u l t of the three uncontrollable f a c t o r s : lack of information, property r e p l o t t i n g s , and sample requirements, the rezoning types and the number of properties involved are revised i n Table I I I . Post-Rezoning RS-1 RS-2 RM-3 C-2 CRM-2 CD-I RS-1 86 6 10 Pre- RT-2 11 8 /Rezoning RM-3 10 M-l 26 17 93 Table I I I Revised Matrix of Pre and Post-Rezoning Types 62 The zoning by-law o u t l i n i n g the requirements f o r each type of zoning under consideration i s presented i n the appendix to Chapter IV. The t o t a l number of rezoned properties now under consideration f o r study has been reduced from 445 to 267, with 262 properties being selected as a c o n t r o l , or non-rezoned, group, BeilngtiiSg the t o t a l number to 529 properties. D. The Assessed Value and Market Value Relationship In the determination of the e f f e c t of rezoning upon property values, the most convenient measure of value was that of assessed value simply, because assessments are made each year on every property for taxation purposes, employing f a i r l y consistent assessment techniques each year. In order to avoid l e g i s l a t i v e l i m i t a t i o n s on property assessments, the general r o l l , which i s mainly free from interference, was used for t h i s purpose. C l e a r l y , assessed values would be a v a i l a b l e f o r study on a before and a f t e r basis f o r rezonings even allowing f o r the aforementioned two year lag i n assessed values whereas market values would be a v a i l a b l e only for those years i n which properties a c t u a l l y sold. Furthermore, there would be no means f o r determining whether or not a sale p r i c e represented an arm's length transaction. Assessed values are adjusted to r e f l e c t property transactions which may involve an a r t i f i c a l sale sale p r i c e . Since market values r e f l e c t t o t a l property value, assessed value for both land and improvements was included. It i s often suggested that the best r e f l e c t i o n of the value of a property i s the p r i c e that property would bring when exposed to the market. No matter how convenient the use of assessed values may be, i f 63 there i s a poor r e l a t i o n s h i p with market values, assessed values w i l l be questionable when applied as a measure of value to the e f f e c t s of rezonings.' I t i s desirable, therefore, to have some i n d i c a t i o n of t h i s r e l a t i o n s h i p . Of the 529 properties under consideration f o r study, approximately 22% or 118 properties had experienced a market transaction during the period 1965-1972. Because market values are employed i n the determina-t i o n of assessed values, for the purposes of regression a n a l y s i s , •', . assessed values were deemed to be the dependent v a r i a b l e . The r e s u l t s of t h i s analysis are presented i n Table IV. The observed t - s t a t i s t i c c l e a r l y , exceeds the c r i t i c a l t ^ - j - j • 95 value while the c o e f f i c i e n t of 2 determination (R ) i s very close to 1, i n d i c a t i n g a very s i g n i f i c a n t r e l a t i o n s h i p e x i s t s . n Estimated C o - e f f i c i e n t Standard Error t - s t a t . • n i l " ' 9 5 R2 118 0.8723 0.006 144.2034 1.960 0.9945 Table IV Regression of Assessed Value on Market Value E. E f f e c t s of Rezoning on Property Values The assumption was f i r s t made i n the hypothesis to t h i s thesis that rezonings do i n fact have an e f f e c t on property values. This assumption has pervaded the discussion thus f a r and yet no attempt has been made to assess the nature of t h i s r e l a t i o n s h i p . By adapting the "dummy" v a r i a b l e to the independent v a r i a b l e Czoning) of the regression equation on the either-or b a s i s , either a property was rezoned during the period 1965-1972 (X = 1) or i t was not (X = 0), i t i s possible to 64 i s o l a t e the o v e r a l l e f f e c t s of rezoning, as presented i n Table V. Although R i s r e l a t i v e l y low, the observed t - s t a t i s t i c again s i g n i -f i c a n t l y exceeds the c r i t i c a l fc _:'£•> .95 value. n Estimated C o e f f i c i e n t Standard Error t - s t a t . £ n - i ' - 9 5 R2 529 1.3179 0.1225 10.7543 1.960 0.1799 Table V Ov e r a l l E f f e c t s of Rezoning As with many o v e r a l l s t a t i s t i c s , i n d i v i d u a l v a r i a t i o n s within the average are often l o s t . Of p a r t i c u l a r i n t e r e s t would be the e f f e c t of s p e c i f i c types of rezonings upon properties. Based upon Table VI, nine d i f f e r e n t rezonings may be discerned, each of which i s matched with a contr o l group of approximately the same s i z e . By applying a s i m i l a r analysis to the i n d i v i d u a l rezonings as was applied to the overall,case, 'Type Rezoning No. Rezoned Control To t a l 1 RS-1 to RS-2 86 86 172 2 RS-1 to C-2 6 6 12 3 RS-1 to CD-I 10 10 20 4 RT-2 to RM-3 11 13 24 5 RT-2 to C-2 8 10 18 6 RM-3 to C-2 10 5 15 7 M-l to RS-1 26 27 53 8 M-l to C-2 17 15 32 9 M-l to CRM-2 93 90 183 Table VI Rezonings by Type i t i s again possible to i s o l a t e the s p e c i f i c e f f e c t of rezoning, but as applied to type. As might be expected, d i f f e r e n t types of rezonings exhibit d i f f e r e n t e f f e c t s of property values. In three of the nine types (2, 3 and 8), the observed t - s t a t i s t i c did not exceed the c r i t i c a l 65 Type ni Estimated C o e f f i c i e n t Standard 1 Error t - s t a t . t ; n _ i , .95 R 2 1 172 0.1017 6'. 0103 •$999012 1.960 .4022 2 12 1.8093 1.7661 1.0244 2.201 .0950 3 20 2.8266 1.4165 1.9955 2.093 .1811 4 24 3.9299 0.6792 5.7859 2.069 .6034 5 18 1.7758 0.5505 3.2256 2.093 .3940 6 15 -2.2511 0.3245 -6.9366 2.145 .7873 7 53 3.3469 0.4786 6.9927 1.960 .4895 8 32 0.2228 0.1334 1.6701 2.021 .0853 9 183 1.7993 • 0.1013 17.7669 1.960 .6358 Table VII E f f e c t of the Type Rezoning t-value i n d i c a t i n g e i t h e r that rezoning did not have a s i g n i f i c a n t impact on value (probably 3 and 8), or simply that the sample s i z e was not large enough (probably 2). Rezoning exhibited a negative influence on Type 6, while i n the remaining f i v e types rezoning p o s i t i v e l y influenced property values but i n varying degrees. Even Type 7, a rezoning from M-l to RS-1, which might i n t u i t i v e l y be considered a downzoning, showed a p o s i t i v e reaction to rezonings. F. Relative E f f e c t of Rezoning by Type As a further i n d i c a t i o n of the s p e c i f i c e f f e c t of rezoning on type, a constant term (C, the Y intercept) determined simultaneously with B (the slope of the regression l i n e ) , has been buiLti into the model. The estimated c o e f f i c i e n t s of the independent v a r i a b l e , zoning, and of the constant term are addi t i v e so the s p e c i f i c impact of zoning as r e l a t e d to the constant may be calculated as i n Table V I I I . For the key to rezoning types, r e f e r again to Table VI. 66 CD C2) C3) Type Est. Co. Est. Co. % Change Constant Zoning C2/D 1 2.7130 0.1017 3.75 2 2.8296 1.8093 63.94 3 2.8667 2.8266 98.60 4 2.4250 3.9299 162.06 5 3.1723 1.7758 55.98 6 5.1722 -2.2511 -53.52 7 2.9045 3.3469 115.23 8 2.5271 0.2228 8.82 9 2.6248 1.7993 68.55 -T^ bl-e^ V-KE-I- Relative-,Imp;Qr-tance_o.f_Rezoni]!ig_by_T.y.pe.,— 1965-1974 Column 1 - the impact of non-controlled factors on property value Column 2 - the impact of rezoning on property value Column 3 - the importance of rezoning r e l a t i v e to other f a c t o r s i n f l u e n c i n g property values. Table VIII very c l e a r l y shows the v a r i a t i o n i n the impact of r e -zoning by type. For example, i n column 3, a value of 100% would in d i c a t e that rezoning played an equal part i n influ e n c i n g property values as did secular, non-controlled f a c t o r s . The higher the value over 100%, the greater the e f f e c t of rezoning on that type r e l a t i v e to other f a c t o r s i n f l u e n c i n g property values, but which were not controlled. S i m i l a r l y , the lower the value under 100%, the less important was rezoning r e l a t i v e to other f a c t o r s . The range v a r i e s from an average decrease of ;-53.5% f o r those properties i n Type 6 to an average increase of 162% f o r those p r o p e r t i e s . i n Type 4. The influence of the type of rezoning on value i s w e l l demonstrated. Over the 9 year period.covered by the r a t i o of 1974 values to 1965 values, i t i s possible to determine, by applying the estimated c o e f f i c i e n t s of the constant term and of the rezonings,.the average 9 rate of change of property values each year. The formula A65 (1 + r) = A74 w i l l give the compound rate of assessed values i n 1965 f o r 9 years at a l e v e l of r % (assumed to be constant). By subtracting the secular change i n value as given by the constant from the average percentage change of the rezoned group f o r each type, the average absolute percent-ageage change i n value, r e s u l t i n g from rezonings, f o r each year over the 9 year period may be described. The r e s u l t s obtained are presented i n Table IX and show no surprises, based upon the above data. Type Constant (%) Rezoned (%) Change (%) 1." 11177 11211 .4 2 12.3 18.6 6.3 3 12.4 21.3 8.9 4 10.4 22.8 12.4 5 13.7 19.4 5.7 6 20.0 12.6 -7.4 7 12.6 22.6 10.0 8 10.9 11.9 1.0 9 11.3 18.0 6.7 Table IX. Average Yearly Percentage Change i n Value, 1965-1974 Although rezoned properties i n Type 6 showed an annual increase i n value over the period 1965-1974 of 12.6%, properties i n the control group f o r that type experienced a 20% increase i n value over the same time period. Once again, Type 6 shows an average annual decrease i n property values, i n t h i s instance, of 7.4% per year when compared to i t s constant. Type 4 again experiences the greatest p o s i t i v e change of 12.4%, with other types f a l l i n g i n between. E s s e n t i a l l y , Tables VIII and IX represent d i f f e r e n t ways of presenting the same data, therefore the cross-confirmation of r e s u l t s i s not s u r p r i s i n g . These two tables, i n conjunction with Table VII, confirm the divergence i n property values r e s u l t i n g from the e f f e c t of rezonings on d i f f e r e n t types of properties. Depending upon the type of rezoning, properties so affected w i l l exhibit d i f f e r e n t growth rates i n value. In terms of p o l i c y decisions, such r e s u l t s would imply a need fo r f l e x i b i l i t y , since a l l property values do not respond i n the same way to rezonings. F. Conclusion It was the purpose of t h i s chapter to examine a c r u c i a l i m p l i -cation of the hypothesis, that rezonings do have an e f f e c t on property value. T h e . s t a t i s t i c a l technique used f o r data analysis was regression a n a l y s i s , the r e s u l t s from which were computed through UBC TSP (Time Series Processor) a prewritten, or "canned" computer program designed for such purposes. Three major points have been established: that market value i s a good i n d i c a t o r of assessed value, that rezoning over-a l l does have a s i g n i f i c a n t impact on property values, and that the impact of rezoning can be expected to vary i n accordance with the s p e c i f i c type of rezoning. This l a t t e r point perhaps the most s i g n i f i -cant, implies the need f o r f l e x i b l e taxation p o l i c i e s i n recognition of the var i e d responses i n property values to d i f f e r e n t types of rezonings. 69 Chapter IV Footnotes 1. J . Neter and W. Wasserman. Fundamental S t a t i s t i c s fox Business and  Economics. (Boston: A l l y n & Bacon, 1969), p. 515. 2. G.W. Summers and W.S. Peters. Basis S t a t i s t i c s i n Business and  Economics. (Belmont, Cal.: Wadsworth Publishing Co., 1973), p. 66. 3. Neter and Wasserman. p. 540. 4. Ibid. 5. Paul E. Green and Donald S. l u l l . Research f o r Marketing Decisions. (Englewood C l i f f s , N.J.: P r e n t i c e - H a l l , 1970), p. 361. 70 CHAPTER V CONCLUSIONS AND IMPLICATIONS Betterment i s a complex subject which has varied i n i t s s p e c i f i c p r a c t i c a l a p p l i c a t i o n as often as i t s name has changed. whatever the name: betterment levy, land value increment tax, development contribu-t i o n , or redevelopment levy, the underlying p r i n c i p l e i s the same: that whenever s o c i a l a c t i v i t i e s , of whatever form they may take, add value to property which i s not a t t r i b u t a b l e to the owner, that increase should accrue to society. In many cases the p r a c t i c a b i l i t y of betterment has been questioned on the grounds that the r e c i p i e n t of value increases i s not e a s i l y definable. This i s e s p e c i a l l y true i n the B r i t i s h case where development r i g h t s on a n a t i o n a l scale were n a t i o n a l i z e d ; the so-called " f l o a t i n g value" of development permission could occur anywhere. With many types of i n f r a s t r u c t u r e placement such as parks, rapid t r a n s i t , freeways, etc. the question of the extent of any benefits a r i s e s . How i s i t possible to determine with any degree of c e r t a i n t y where benefits s t a r t and end? Rezonings are d i f f e r e n t i n that the area to be immediately affected by the rezoning i s c l e a r l y defined at the time of the a p p l i c a t i o n of rezoning. Adjacent properties often experience either favorable or unfavorable s p i l l o v e r e f f e c t s depending upon the type of rezoning, but again, the u n c e r t a i n i t y of delineating the extent of such e f f e c t s a r i s e s . . Since rezonings have been found to have a s i g n i f i c a n t impact on property values, since the power to rezone i s at the.discretion.of Council, and since rezoned areas are c l e a r l y defined, betterment appears to be best c o l l e c t e d through the rezoning 71 mechanism. Based upon the arguments f o r the c o l l e c t i o n of betterment i n other countries, the p r i n c i p l e i s generally acceptable. A. Summary of Empirical Analysis E s s e n t i a l l y , three major fin d i n g s emerged from the empirical a n a l y s i s : 1. there i s a very close r e l a t i o n s h i p between market values and assessed values i n Vancouver, 2. zoning o v e r a l l has a s i g n i f i c a n t e f f e c t on property values, and 3. the type of rezoning has an even greater s i g n i f i c a n t e f f e c t on property values. Certain implications f o r p o l i c y decisions flow from these f i n d i n g s . The nature of the r e l a t i o n s h i p between market values and assessed values indicates that i n the determination of value increases, assessed values w i l l be a "useful t o o l f o r t h i s purpose i f the two year l a g , i n keeping with current assessment p r a c t i c e s , i s taken into consideration. This i s not to say that a better system f o r determining value w i l l not evolve, only that under current circumstances t h i s lag i s an important f a c t o r . The convenience of being able to use assessed values becomes a d i s t i n c t advantage. I t must.be understood, however, that t h i s r e l a t i o n s h i p i s an average; a l l assessed values do not n e c e s s a r i l y c l o s e l y correspond to market values, but on average t h i s appears to be so. Perhaps of more d i r e c t importance i s the e f f e c t of the type of rezonings on property values, and the implications derived therefrom. C l e a r l y property values w i l l be affected by the type of rezoning, but 72 at d i f f e r e n t l e v e l s depending upon type. I t i s evident that f o r the c o l l e c t i o n of betterment, each type of rezoning must be considered on i t s own. No schedule of charges o u t l i n i n g the degree to which a property would be subject to the betterment levy, i f betterment were to be c o l l e c t e d d i f f e r e n t l y f o r d i f f e r e n t types of rezoning, could be drawn up i n advance. This point i s c l e a r l y shown i n the case of Type 7, a rezoning from M-l ( i n d u s t r i a l ) to RS-1 ( r e s i d e n t i a l ) , i n t u i t i v e l y a downzoning, which showed a marked increase i n property value. While th i s may or may not be a t y p i c a l case, i t does point out the need f o r the consideration of each case on i t s own as ^ d i f f e r e n t economic conditions w i l l r e f l e c t d i f f e r e n t zoning requirements. "The demand for land i s a derived demand, and i t s p r i c e i s determined by the p r i c e s of the goods and services i t f a c i l i t a t e s : not the other way round.""*" "The basic point has been made that the behaviour of land p r i c e s has 2 been a consequence, not a cause." B. Taxation Incidence As outlined i n Chapter I I , an important point to consider i s the incidence of the tax, j u s t where does i t f a l l ? "... the burden of a tax on a non-reproducible resource whose supply cannot be v a r i e d (e.g. land ) w i l l f a l l on i t s owner...the owner must take the conditions of demand as given. He cannot s h i f t the burden of the tax on to buyers or renters by r a i s i n g p r i c e , since nothing w i l l have happened to t h e i r circumstances to increase t h e i r a b i l i t y to pay more. They w i l l thus be prepared to buy or rent the pre-tax quantity of a v a i l a b l e land only at a pre-tax p r i c e s and rents." As Pennance points out, the above argument r e f e r s only to a f i x e d stock of land which i s not the .case f o r developable land. The higher the p r i c e o f f e r e d , the more pressure i s placed on p u b l i c o f f i c i a l s to release land f o r development through rezoning and, by and large, more 73 land i s forthcoming. Land w i l l be marketed i f developers' b i d p r i c e s outweight the owners' preferences and expectations of the land i n i t s current use. For land that requires rezoning before development may occur, a tax on property value increases could reduce the quantity supplied or r a i s e the p r i c e l e v e l and choke off demand. The English experience i n t h i s regard, where, f o r a while, development value was being taxed at 100% and which eventually came to constitute a permanent addition to development costs, should not be forgotten. The degree of the p r i c e s h i f t that would occur, a higher p r i c e f o r buyers or a lower p r i c e f o r s e l l e r s , would depend on the e l a s t i c i t y , or responsiveness, of demand and supply r e l a t i v e to p r i c e changes. This i s a very r e a l problem which must be taken into consideration. The l e v e l of levy charges would appear to d i r e c t l y influence the above p r i c e s h i f t , depending upon e l a s t i c i t i e s : i f too l e n i e n t , there would probably be l i t t l e impact, i f too onerous, possibly a major influence on market decisions. In a study of r e s i d e n t i a l developer behavior i n the Vancouver area, Goldberg^found that a f t e r proper zoning and access to trunk sewers (one would expect t h i s factor to be of l e s s e r importance i n Vancouver c i t y ) , land p r i c e and a v a i l a b i l i t y were considered next i n importance by the developers. The implications of an onerous levy at once become apparent. Several p o s s i b i l i t i e s e x i s t f o r s e t t i n g the l e v e l of the levy: a f l a t percentage based upon the type of rezoning, a percentage levy above some "reasonable" return to the properties concerned, etc. How-ever, because of the expected d i f f i c u l t y i n s e t t i n g out a schedule of charges, the levy, of whatever form i t may take, may simply have to be negotiated beforehand with the developer. This case i n j e c t ss an undesirable degree of uncertainty, f o r both.the C i t y and any p o t e n t i a l developer, into the s i t u a t i o n . Federal c a p i t a l gains l e g i s l a t i o n which currently taxes 50% of increased property value r e a l i z e d upon sale (except f o r p r i n c i p a l residences), must also be considered. The combina-t i o n of the betterment levy and the c a p i t a l gains tax could prove very onerous depending upon the timing of the levy. It. sKouid be pointed out that of a l l rezonings taking place between 1965 and 1972 (actual r e -zonings, not i n d i v i d u a l properties involved), 48.8% involved changes, i n some combination, i n RS-1 zonings, by f a r the largest group involved with rezonings. C. Implementation Procedures The possible uncertainty mentioned above could be softened some-what i f a l l betterment charges were known as soon as was p r a c t i c a b l y possible i n the proceedings. In England, the 1967 Land Commission Act s p e c i f i e d that "...a 'betterment' levy was to be imposed at a uniform rate on development value i n land when r e a l i s e d either by transaction or by d e v e l o p m e n t . T h e levy i s paid whenever development value i s r e a l i s e d , although n o t i f i c a t i o n of any i n t e n t i o n to begin development did not incur any l i a b i l i t y , by the person r e c e i v i n g the value. I t • was charged only once on any one s p e c i f i c development. A l l increases i n the current use value of land were ignored. In Johannesburg, South A f r i c a , as mentioned, the development contribution was charged against 50% of the increase i n value a r i s i n g from rezoning. Valuation was done in. two stages: on the day immediately p r i o r to the rezoning day and again on the actual day of the rezoning being.approved payment could be deferred but had to be made before any transfer of land could be re g i s t e r e d , before any b u i l d i n g plan i s approved, or before any property can be used i n any manner which, before the rezoning, would have contravened e x i s t i n g zoning. A mechanism of appeal f o r aggrieved owners i s also provided. Under t h i s "system development charges would be known we l l i n advance of development, depending upon the timing of the development. Closer to home, an e a r l i e r study was c a r r i e d out to o u t l i n e some of the implications of imposing a redevelopment levy i n the Ci t y of Vancouver i n which implementation procedures were considered: "In Vancouver, B.C. for example, the basic sequence of development approval beings with rezoning (when necessary), then proceeds to the development permit and f i n a l l y the b u i l d i n g permit stage. As the developers and the proposed density are known at the time of develop-ment permit a p p l i c a t i o n , i t would be most appropriate to impose the levy at t h i s stage, as a condition of approval. Imposition of the levy at the time of rezoning would be unworkable because: a. the developer andpjr.opp.BEa density may not be known. b. Rezoning often involves a large number of property owners who have no i n t e n t i o n of developing t h e i r property to a higher density."^ This approach follows somewhat those of both England and South A f r i c a i n that the levy b a s i c a l l y applies to r e a l i s e d value which would a l l a y some of the fears expressed e a r l i e r i n the proposed Hawaiian l e g i s l a t i o n i n which i t was f e l t that developers would reduce t h e i r e f f o r t s to obtain rezonings ahead of time r e s u l t i n g i n a smaller supply of more expensive land. In terms of knowledge of the actual development to be undertaken and i n early timing, based upon l o c a l conditions, t h i s seems a l o g i c a l approach. The implementation of the betterment levy at the development permit stage concentrates on development and neglects the p o s s i b i l i t y of a sale occurring a f t e r rezoning but before development, sales which could take advantage of i n f l a t e d p r i c e s based upon the rezoning. In e f f e c t , a developer could pay betterment twice: an i n f l a t e d sale p r i c e and the levy upon development. Following somewhat the B r i t i s h example, the levy could be imposed at the time of sale or at the development permit stage, whichever came f i r s t a f t e r rezoning. In t h i s way, b e t t e r -ment would be imposed only once per rezoning, a more equitable s o l u t i o n . D. Compensation Compensation f o r loss of property value because of downzoning or because of a r e f u s a l to rezone i s bound to be a contentious issue. I t was e a r l i e r suggested that compensation .is the t h e o r e t i c a l inverse of betterment; that i f unearned gains are passed to the community a balance should be created whereby land i n j u r i o u s l y affected (reduced i n value) by l o c a l actions should be compensated. I t was also suggested that downzonings " i n the p u b l i c i n t e r e s t " , s i m i l a r i n concept to the English "good neighborliness" r u l e f o r lack of compensation payments, would not r e s u l t i n compensatory payment. However, a case could be made to the e f f e c t that a l l rezonings, to.a higher or l e s s e r use, should only be undertaken i f they are indeed " i n the p u b l i c i n t e r e s t , " whatever that implies. Currently the Vancouver Charter under Section 569 s p e c i f i c a l l y exempts the C i t y from making any payments of compensation f o r property i n j u r i o u s l y affected because of rezonings of any sort. However, the C i t y i s not c o l l e c t i n g betterment charges as such and were i t doing so, f o r equitable purposes, the wording of t h i s section could.change. If land were expropriated by the community, i t would.clearly be inequitable not to pay compensation f o r a t o t a l loss of property r i g h t s , 77 but the a p p l i c a t i o n of compensation to betterment i s l e s s c l e a r . I t cannot be argued that i n d i v i d u a l s currently have complete freedom f o r the use of t h e i r land;•community influences through zoning by-laws and other ordinances e f f e c t i v e l y r e s t r i c t the use of land and yet compensa-t i o n i s not paid i n t h i s case. Therein l i e s the paradox of the s i t u a t i o n ; "...that despite the strong r i g h t s of the community i n p r i v a t e l y owned land, the i n d i v i d u a l owner's sense of property and i t s r i g h t s i s more strongly developed i n r e a l estate than anything e l s e . He therefore expects f u l l compensation f o r the infringement of such established r i g h t s , although i f the same man were operating as a second-hand car dealer he would not demand compensation f o r the loss on h i s stock due to the overnight reduction i n the purchase tax on new v e h i c l e s ; . . . " ^ The same point could be made regarding landlords operating under rent c o n t r o l . Landlords claim that rent l e v e l s do not allow an adequate return a f t e r expenses and yet, even i f i t were shown to be true, the question of compensation does not a r i s e (the same i s true i n England). Federal c a p i t a l gains l e g i s l a t i o n allows a portion of c a p i t a l losses to be deducted from income, not an unreasonable p a r a l l e l to the case at hand and yet the two concepts are not a c t u a l l y comparable. C a p i t a l gains and losses for f e d e r a l tax purposes have already been r e a l i z e d ; they are a f a c t . While rezonings to a higher use tend to i n -crease land values, downzonings or r e f u s a l of rezoning permission may involve losses which are only hypothetical, based on what the property "would" have sold f o r under different.circumstances. Compensation cannot be based upon hypothetical assumptions. If rezonings can be shown to be completely deleterious, providing a - d i s t i n c t hardship which cannot be remedied through other l e g a l channels (eg. nuisance), 78 then c e r t a i n l y a claim f o r compensation would be va l i d . . Again i t appears that claims f o r compensation would depend upon the s p e c i f i c case. C e r t a i n l y some mechanism f o r review and appeal of rezonings as applied to possible claims f o r compensation should be provided i n any l e g i s l a t i o n . E. Legal and Administrative A p p l i c a t i o n At present, the imposition of a betterment levy i n the C i t y of Vancouver i s i l l e g a l and i t tends to v i o l a t e c e r t a i n l e g a l maxims. M u n i c i p a l i t i e s must be i m p a r t i a l i n the exercising of l e g i s l a t i v e powers and cannot discriminate against or show f a v o r i t i s m toward d i f f e r e n t classes of c i t i z e n s . In t h i s sense the betterment levy discriminates against those carrying out development and ignores value enhancement i n other properties, even though the question was r a i s e d as to how the extent of c i v i c a c t i v i t i e s can be measured. I t i s also understood that councils cannot f e t t e r , or diminish, the l e g i s l a t i v e power of future councils by bargaining away t h e i r d i s c r e t i o n to make law (often c a l l e d the "you can't s e l l zoning" maxim). An example of such a case would be a contract to change the zoning of an area f o r some benefits which would r e s u l t i n the future. Betterment need not be paid i n cash but could take the form of payment " i n kind" through the p r o v i -sion of p u b l i c services by the developer over a period of years as the development progressed, as a condition of future required rezonings. Development permits i n comprehensive development zones, o u t l i n i n g a l l required r e s t r i c t i o n s , operate i n a s i m i l a r manner. Furthermore, a c o u n c i l i s not meant to apply i t s l e g i s l a t i v e authority to judge each case on i t s own merits. I f t h i s were so, the p r i n c i p l e of a s c e r t a i n -. a b i l i t y , the c e r t a i n t y with which l e g i s l a t i o n should be made, would be 79 v i o l a t e d . The expected d i f f i c u l t y i n p r o v i d i n g a schedule of b e t t e r -ment charges would appear to v i o l a t e t h i s p r i n c i p l e . The exception to the above c o n d i t i o n s occurs i f the r e l e v a n t enabling l e g i s l a t i o n so a l l o w s . For the C i t y of Vancouver, the enabling l e g i s l a t i o n i s found i n the Vancouver Charter which would probably r e q u i r e s u b s t a n t i a l amendments. The betterment l e v y i s an i n d i r e c t form of t a x a t i o n , not s p e c i f i c a l l y r e l a t e d to current zoning p r o v i s i o n s . Although a f f e c t e d upon rezoning, i t i n i t s e l f i s not based upon the same p r i n c i p l e s as zoning and, as such, could r e q u i r e a new s e c t i o n i n the Charter. The development permit or land use c o n t r a c t may prove a v i a b l e means f o r the c o l l e c t i o n of betterment, and, because of l e g i s -l a t i v e precedents i n B.C., may be, l e g a l l y , a more p a l a t a b l e method than o u t r i g h t t a x a t i o n . I t i s recommended that an in-depth l e g a l examination of the betterment l e v y , i n a l l i t s complexity, be forthcoming. As the Goldberg study found, the number of agencies that must be contacted by developers i n order to gain approval f o r developments ( i n t h i s case, r e s i d e n t i a l ) was a major source of d i f f i c u l t y . It would t h e r e f o r e seem expedient to i n c o r p o r a t e betterment l e g i s l a t i o n i n t o the e x i s t i n g departmental s t r u c t u r e . While the department most c l o s e l y r e l a t e d to the c o l l e c t i o n of betterment might be Permits and L i c e n c e s , at l e a s t i n terms of t i m i n g , a d m i n i s t r a t i v e problems are bound to be complex, the f i n a l d e c i s i o n depending upon the C i t y Manager. I t i s perhaps a f i t t i n g c o n c l u s i o n to quote the Uthwatt Committee, p o s s i b l y the most p r e s t i g i o u s group... to study the i m p l i c a t i o n s of betterment: "... the. f a i r n e s s , of the p r i n c i p a l of. betterment commands.general acceptance. I t i s i n i t s p r a c t i c a l a p p l i c a t i o n that d i f f i c u l t i e s a r i s e . " 8 80 F. Limitations of the Study Any study representing e s s e n t i a l l y an analysis done at one point i n time su f f e r s from l i m i t a t i o n s . Property values are the r e s u l t of the complex i n t e r a c t i o n of a number of v a r i a b l e s which do not remain s t a t i c . As a r e s u l t , the e f f e c t s of rezonings upon property values r e f l e c t only the conditions throughout the duration of the study, 1965-1974, and f o r the s p e c i f i c areas i n which the studies rezonings took place. I t i s conceivable that s i m i l a r rezonings i n d i f f e r e n t areas of the c i t y could exhibit d i f f e r e n t r e s u l t s , further supporting the need to study each rezoning i n d i v i d u a l l y . Lack of data i n many instances r e s t r i c t e d the extent of the study, although the nine types studied did represent the majority of the rezonings, by properties involved, at that time. In u t i l i z i n g data based upon a r a t i o of 1974 values to 1965 values, possible v a r i a t i o n s within that time period.are excluded. However, i n so doing, a r t i f i c i a l l e g i s -l a t i v e l i m i t a t i o n s on assessed values, e s p e c i a l l y f o r 1967 which had no general r o l e , are also excluded to the benefit of the study. Because of the time horizon required f o r s t a t i s t i c a l a n a l y s i s , -^ many recent large-scale rezonings had to be excluded which again may l i m i t the over-a l l e f f e c t of the study simply because of the scale involved. For those rezonings which showed l i t t l e s i g n i f i c a n c e upon analy-s i s , i t i s impossible to say exactly why, although based upon the sample siz e i t i s poss i b l e to surmise which reason, sample s i z e or lack of zoning s i g n i f i c a n c e , . i s Jiiore l i k e l y . The changing nature of property values and economic conditions renders future predictions as to the e f f e c t s of rezonings an uncertain task. Nevertheless, the study' does provide some in s i g h t into the current e f f e c t s of zoning on property values. 81 G. Summary of Findings and Recommendations 1. Although deviations from the mean occur, on average, there i s a good r e l a t i o n s h i p between market values and assessed values. 2. O v e r a l l , rezonings have.a s i g n i f i c a n t e f f e c t on property value. 3. The impact of the type of rezoning on property value v a r i e s with each type. 4. At any point i n time, a schedule of charges could apply f o r the c o l l e c t i o n of betterment, but over time i t i s doubtful such a schedule would apply. As a r e s u l t , the e f f e c t of each rezoning type upon value would have to be considered on i t s own to r e f l e c t current economic, s o c i a l , and p o l i t i c a l conditions. 5. Implementation should.occur as early as pos s i b l e i n the development stage but to avoid double payment, payment should probably be made at the development permit stage or upon sale, whichever came f i r s t a f t e r rezoning. 6. Betterment should be c o l l e c t e d only once per rezoning. 7. A mechanism f o r appeal and review of rezonings as applied to possible claims f o r compensation should be included i n any l e g i s l a t i o n . 8. CD-I zoning, or equivalent development permit or land use contract l e g i s l a t i o n , should not be overlooked as a means for the c o l l e c t i o n of betterment. 9. A study should be made of the l e g a l implications as applied to the implementation of betterment. 10. Betterment l e g i s l a t i o n should be incorporated into the ex i s t i n g departmental structure. Chapter V Footnotes 1. Pennance pp. 41-42. 2. Turvey. "The Rationale of Rising Property Values," p. 31. 3. Pennance. P. 42. 4. M.A. Goldberg. 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U n i v e r s i t y of B.C., 1972. 9 0 A P P E N D I X E S 91 APPENDIX TO CHAPTER I Wendt's The o r e t i c a l Model of "Urban Land Value Average future expected aggregate (1) V = net annual urban land rent C a p i t a l i z a t i o n rate (2) V = Rx - Cx  C a p i t a l i z a t i o n r a t e (3) Rx = fx(P, Y, Pu, S, PI), where X = investors' expectations p = population y = average amount of income spent f o r urban services Pu = competitive p u l l of the urban area S = supply of competitive urban land PI = prospective investment i n p u b l i c improvements (4) Cx = sum of x(T + Oc + iim + Dim), where T = sum of a l l l o c a l property taxes Oc = operating costs iim = i n t e r e s t on c a p i t a l invested i n present and future improvements Dim = depreciation allowances on present and future improvements (5) Cap Rate = f x ( i , R, Cg), where i = i n t e r e s t rates R = allowances f o r expected r i s k s Cg = expectations concerning c a p i t a l gains (6) V = fx(P, Y, S, Pu, PI) -_Lx(T + Oc + iim + Dim) f x a , R, Cg) 92 APPENDIX TO CHAPTER IV A. Hypothesis Testing by Regression Analysis The actual regression model i s Y/X = A + BX + u, where u,< i s a disturbance term, with the t r a d i t i o n a l assumption = E(u) =0; or, taking expectation = E(Y/X) = E(A + BX + u) = E(A) + E(BX) + E(u) = A + BX Since Y/X = A + BX + u E(Y/X) = A + BX, then E(Y/X) which i s the o v e r a l l mean i s a point oh the regression l i n e . Y = A + BX A74A65 = A + B (Zoned), where, A74A65 i s a r a t i o of the 1974 land value to the 1965 land value The hypothesis t y p i c a l l y tested i s the n u l l hypothesis: Ho : B = 0 that i s , zoning has no e f f e c t on property value, which i s tested against the a l t e r n a t i v e , Hi : B ± 0 The d i s t r i b u t i o n of the t - s t a t i s t i c i s given as follows: If an observed value f a l l s w ithin + 1.96 standard deviations, the n u l l hypothesis that rezonings have no e f f e c t on property value w i l l be accepted as being correct 95% of the time, the p r o b a b i l i t y of i t s being i n c o r r e c t only .05. Any observed t-value f a l l i n g i n the r e j e c t i o n range, above 1.96 standard deviations or below -1.96 standard deviations, r e s u l t s i n r e j e c t i o n of the n u l l hypothesis. For example, i n the case of the o v e r a l l e f f e c t s of rezoning on property values, the observed t - s t a t i s t i c , 10.7543, i s greater than the c r i t i c a l t-value ( t ^ - l , .95) of 1.960 thereby r e j e c t i n g the n u l l hypothesis that zoning has no e f f e c t on property values o v e r a l l . 94 B. The Dummy Variable With both the o v e r a l l e f f e c t s of rezoning and the s p e c i f i c e f f e c t of the type of rezoning, that which i s being studied i s a t o t a l mean of 529 properties i n the f i r s t case and 9 d i f f e r e n t means i n the second case, which i s then applied to the regression equation A74A65 = A + BX A i s a term common to both rezoned and nori-rezoned groups X w i l l be either 1 or 0 depending upon whether the property i s rezoned or unrezoned Regression tests whether the estimated mean of A74A65 i s s i g n i f i c a n t l y d i f f e r e n t from the common f a c t o r A. A(A74A65) = A + BX U = A + B(6) = A U 2 = A + B(l) = A + B The t - s t a t i s t i c , based upon the number of observations, w i l l i n d i c a t e whether or not the B term of the rezoned group i s s i g n i f i c a n t l y d i f f e r e n t from 0, that i s , whether rezoning i s or i s not a si g n i g i c a n t f a c t o r . 95 C. Analysis of Variance (ANOVA) Analysis of variance i s a s t a t i s t i c a l technique which i s used i n th i s case to test the r e s u l t s obtained through regression a n a l y s i s . E s s e n t i a l l y , ANOVA performs a simultaneous comparison of means, re q u i r i n g the breakdown of the o v e r a l l zoning e f f e c t s and the various types of rezonings into t h e i r component parts, rezoned and non-rezoned properties. Type Mean Standard Deviation Overall-rezoned 4.0687 1.8927 Ov e r a l l - c o n t r o l 2.7504 .5992 1-rezoned 2.8147 .0759 1-control 2.7130 .0576 2-rezoned 4.6388 4.3196 2-control 2.8296 .2366 3-rezoned 5.6932 4.4757 3-control 2.8667 .1806 4-rezoned 6.3548 2.4585 4-control 2.4250 .0500 5-rezoned 4.9481 1.7264 5-control 3.1723 .2772 6-rezoned 2.9211 .2159 6-control 5.1722 1.0179 7-rezoned 6.2514 2.2518 7-control 2.9045 1.0374 8-rezoned 2.7498 .3240 8-control 2.5270 .4288 9-rezoned 4.4241 .8279 9-control 2.6248 .4954 By applying f i r s t the formula SD deviation i s found, where: JSf --I T ~rTz, t n e o v e r a l l standard = standard deviation f o r rezoned group = standard deviation f o r c o n t r o l group 96 = population of rezoned group n 2 = population of c o n t r o l group It i s then possible to f i n d the observed t - s t a t i s t i c by applying the formula Xi ~~ X 2 where, X^ = the mean of the rezoned group X^ = the mean of the co n t r o l group = the predetermined standard deviation As with regression analysis^ i f the s i g n i f i c a n c e of the di f f e r e n c e between X^ - X^ w i l l be given by the t - s t a t i s t i c . For comparison purposes, the two methods are presented side-by-side, and i t w i l l be noted that i n each case, ANOVA confirms the regression f i n d i n g s . ANOVA REGRESSION Type t , + n2-2 nnl t . + n2, .95 ni t - s t a t . t. . .95 n-1, O v e r a l l 10.8378 1.960 10.7543 1.960 1 9.9014 1.960 9.9012 1.960 2 1.0244 2.228 1.0244 2.201 3 1.9954 2.101 1.9955 2.093 4 5.3005 2.074 5.7859 2.069 5 2.8798 2.120 3.2256 2.093 6 -4.8905 2.131 -6.9366 2.145 7 6.9059 1.960 6.9927 1.960 8 1.6408 2.042 1.6701 2.021 9 17.9037 1.960 17.7669 :1.960 Comparison of Results Obtained by ANOVA and REGRESSION 97 D. Combined E f f e c t s of Type and Zoning I f a l l 529 properties were subjected to analysis by binary code (0 and 1) not only as to rezoning but also as to type, the problem of sample s i z e would not occur because of the number of properties involved. Each type would experience four d i f f e r e n t options. For example, Type 1: Type 1 or not Rezoned or not Combination ( m u l t i p l i -c a t i v e 1 1 1 Type 1, rezoned 0 0 0 Type 1, not rezoned 0 Not Type 1, rezoned 0 Not Type 1, not re-zoned This analysis would apply the same way to each i n turn (because of s t a t i s t i c a l requirements, one type, Type 6, was dropped from t h i s a n a l y s i s ) . As evidenced by the accompanying table, a l l r e s u l t s are s i g n i f i c a n t . "Type" again s i g n i f i e s the p o s s i b i l i t y of being i n one of the rezoning c l a s s i f i c a t i o n s while "ZONTYP" r e f e r s to the combined e f f e c t of rezoning on s p e c i f i c type. E S [TV CF ( J . C . * * * T S P * * « IMPLEMENTED MARCH, 1972 PAGE 69 V— \ * \ i INDEPENDENT VAC IAP.LE E S T I C A T E C C O E F F I C I E N T ST AMDARC ERROR T-STAT ISTIC MEAN C F V A R I A B L E i i I C 5 .17218018 0 .48676G20 10 .62 57248C 1 .00000000 1 i ZONED - 2 . 25109386 0 . 5 9 6 1 5 7 0 7 - 3 . 7 7 6 0 0 7 6 5 0 . 50472587 ; TYPE1 r J L . A 5 9 i . B 8 4 6. 0. 50071C37 - 4 . 91 1398E9 0 . 3 2 5 1 4 1 7 3 J i 1 TYPE? - 2 . 3 4 2 6 1 2 2 7 0 .65907651 55438519 0. 022 6E431 T \p r 3 - 2 . 30551529 0. 59615719 - 3 . 86 729 3 36 O . U 3 7 807 18 ] TYPE'. - 2 . 7 4 7 1 9 6 2 C 0 .57276928 - 4 . 79633904 0 .U4536662 1 I j TYPES - 1 . 9 9 9 9 0 3 6 8 0 . 59615725 - 3 . 3 5 4 6 5 7 1 7 0 . 0 3 4 0 2 6 4 6 • TYPE7 - 2 . 2 6 7 7 0 4 9 6 0 .52991742 - 4 . 2 7 9 3 5 5 0 5 0 . 10018903-TYPES - 2 . 6 4 5 1 2 6 3 4 0 .56206238 - 4 . 70610809 0 . 0 6 0 4 9 1 4 9 TYPE9 - 2 . 5 4 7 3 8 7 1 2 C. 500C9859 - 5 . 09376907 0 . 3 4 5 9 3 5 7 0 ZCNTYP1 2 . 3 5 2 8 2 0 4 0 0 .61883271 3 .80202961 0 . 16257083 s ZCKTYP2 4 .C6035233 0. 86619616 4 .68 756676 0 . 0 1 1 3 4 2 1 5 ZCNTYP3 5 . 0 7 7 6 5 2 S 3 0. 76963J68 6 .59747601 0 . 0 1 8 9 0 3 5 9 Za .TYP'* 6 . 18095779 0 .74446642 8 . 3 0 2 5 3 3 1 5 0. 020793 95 ZCNTYP5 4 . C 2 6 9 1 C 7 E 0. 78864193 5. 10613251 0 . 0 1 5 1 2 2 P 7 Z E N T Y P 7 5 .59801769 o . 666966 86 G. 39 324665 0. 0491493-V • j ZUiTYPfc 2 . 4 7386742 0 . 70997798 2 .48442745 0 . 0 3 2 1 3 6 1 1 ZCNTYP9 4 . 05343793 0. 61749E62 6. 55942535 0 . 1 7 5 6 0 3 3 6 f . -SCUAFEC - . 0 . 5256 CU? f. IU- Vi AT SOK S T A T I S T I C I A D J . FOP C CAPS) = 1. 222J M.M'EP. c r CPSERVAT ICfvS =. 529 SUN CF SCLAF.ED F E S I C L A L S = 6C5 .371 | STANCAPC E F F C R OF TE-E REGRESSION = 1. 08843 i Appendix to Chapter 1.7 E. Pertinent Zoning Regulations- Exerpts from Zoning and Development By-Law Wo. 3575 (RS-1) ONE-FAMILY DWELLING DISTRICT SCHEDULE: 1. Uses permitted and regulations: Subject to all the provisions of this by-law on any site within any district defined, designated or described in this by-law as an (RS-1) District the only uses permitted and the only uses for which development permits may be issued are those contained in Sections 1 and 2 hereof. (18/12/62—*4031) A . Uses: (1) One-family dwelling. (2) The keeping of not more than two boarders or lodgers or not more than five foster or day-care children in a dwelling unit. (22/3/66—*4234) (3) A building or use customarily accessory to the above uses (except for another dwelling unit) provided that: (a) All accessory buildings are located in the rear yard and in no case are less than five feet from a flanking street subject also to the provisions of Section 11 (1) of this By-law. (b) The total accessory buildings do not occupy an area greater than 25 percent of the minimum rear yard prescribed in this schedule, or 460 square feet, which-ever is the greater. (c) No accessory building shall exceed one storey or 10 feet in height. (d) Not more than two-thirds of the width of the rear yard of any lot shall be occupied by accessory buildings. (e) No accessory building shall be closer than 12 feet to any dwelling on the property. (13/8/57—*3649) B. Height. The height of a building shall not exceed 35 feet nor 2 V _ storeys. C. Front Yard: (1) A front yard shall be provided having a depth of not less than twenty-four (24) feet. (2) In the case of a site having an average depth of less than one hundred and twenty (120) feet the front yard may be reduced in accordance with Section 11 (IB) of this by-law. (21/6/62—*3995) D. Side Yards: (1) A side yard of not less than 10 percent of the width of the site shall be provided on each side of the building; provided that the maximum width of such side yard need not exceed five feet. (2) In the case of a corner site at the rear of which, whether a 55 RS-1 lane intervenes or not, is a site fronting on a street which flanks such corner site, the minimum width of the side yard on the corner site along the flanking street shall be in accord-ance with the provisions of Section 11(1) of this By-law. E. Rear Yard: (1) A rear yard shall be provided, the minimum depth of which shall be not less than thirty-five (35) feet. (2) In the case of a site having an average depth of less than one hundred and twenty (120) feet the rear yard may be reduced in accordance with Section 11 (IB) of this By-law. Provided always that where the rear of a site abuts a lane, the depth of the rear yard may be decreased by the width of that portion of the lane lying between the rear of the site and the ultimate centre line of the lane. (21/6/62—*3995) P. Site Area: A site either for a new one-family dwelling or the relocation of an existing one-family dwelling shall have an area of not less than 4,800 square feet, except in the case of a lot of lesser area, on record in the Land Registry Office for the Vancouver Land Regis-tration District. G. Floor Space Ratio: .. The floor space ratio shall in no case exceed 0.45. For the purposes of this schedule, in computing the floor space ratio the floor area of the building shall include the total area of all the floors of all the buildings on the site, including accessory buildings (measured to the extreme outer limits of the building), except for areas of floors used for parking purposes and areas of cellars or basements which are not used as habitable accommo-dation or access to habitable accommodation. (4/7/61—*3926) H. Off-street Parking Spaces: " Off-street parking spaces shall be provided and maintained as required by, and in accordance with the provisions of Section 12 of this By-law. J. Off-street Loading Spaces: Loading and unloading spaces shall be provided and maintained as required by, and in accordance with the provisions of Section 13 of this By-law. K. Advertisements: Advertisements, bulletin boards, or identification signs are not permitted in the (RS-1) District except as provided for in Section 10(21) of this By-law. . Uses which may be permitted subject to special approval by the Technical Planning Board: With the approval of the Technical Planning Board development permits may be issued for the following uses. If the development 56 permit is granted it shall be subject to such conditions and regulations as the Technical Planning Board may decide. (18/12/62— *4031) A. Uses (Group A) : (1) A dwelling which has been continuously used and occupied as a boarding house or rooming house since a date prior to June 18, 1956, and which use was installed with or without one or more of the required City Permits may be granted a development permit limited in time. (2) A dwelling unit or a housekeeping unit which has been con-tinuously used and occupied as such since a date prior to June 18, 1956, and which was installed with or without one or more of the required City permits may be granted a development permit limited in time. (8/11/60—*3884) (3) School (public or private) kindergarten, day-care school, creche or day nursery. (4) Park or playground. (5) Golf course. (6) Truck garden, nursery, or greenhouse for propagating and cultivating. (7) Tourist court subject to the provisions of Section 11(5) of this By-law. (8) The deposit or extraction of material so as to alter the con-figuration of the land. (9) Home craft or occupation provided that there is nothing to indicate from the exterior that the building is being utilized for any purpose other than that of a dwelling; that there is no commodity sold upon the premises and that no person other than one member of the immediate family residing there is engaged in such craft or occupation on the premises. (9a) Marina (excluding boat building and major repairs to and overhaul of boats). (31/7/73—*4713) (10) Parking area (public) ancillary to a principal use on an adjacent site. (11) Buildings or uses customarily accessory to the above uses and accessory buildings or uses to dwellings other than those provided for in Section 1 of this Schedule. B. Uses (Group B) which may only be granted by the Technical Plan-ning Board after consultation with the Vancouver City Planning Commission. (1) Stadium or similar place of assembly. (1A) Aircraft landing place. (15/9/64—*4125) (2) Community centre. (3) Church, subject to the provisions of Section 11(7) of this By-law. (4) A new building specifically designed for a Hospital or Personal Care Home, excluding a mental hospital or hospital for the 57 RS-1 102 treatment of animals, subject to the provisions of Section 11 (15) of this by-law. (7/11/63—*4077) (5) Institution of a religious, philanthropic, or charitable char-acter. (6) Public utility. (7) Building or use essential in this district required by a public authority. (8) Building or use customarily accessory to the above uses. (9) Local area activity centre. (2/4/74—*4763) RS-1 58 (RS-2) ONE-FAMILY DWELLING DISTRICT SCHEDULE 1 . Uses Permitted and Regulations: Subject to all the provisions of this by-law on any site within any district defined, designated or described in this by-law as an (RS-2) District the only uses permitted and the only uses for which development permits may be issued are those contained in Sections 1 and 2 hereof. (18/12/62—*4031) A. Uses: (1) One-family dwelling. (2) The keeping of not more than two boarders or lodgers or not more than five foster or day-care children in a dwelling unit. (22/3/66—*4234) (3) A building or use customarily accessory to the above uses (except for another dwelling unit) provided that: (a) all accessory buildings are located in the rear yard and in no case are less than five feet from a flanking street subject also to the provisions of Section 11(1) of this By-law; (b) the total accessory buildings do not occupy an area greater than 25 percent of the minimum rear yard pre-scribed in this schedule, or 460 square feet, whichever is the greater. (c) no accessory building shall exceed one storey or 10 feet in height. (d) not more than two-thirds of the width of the rear yard of any lot shall be occupied by accessory buildings. (e) no accessory building shall be closer than 12 feet to any dwelling on the property. (13/8/57—*3649) B. Height: The height of a building shall not exceed 35 feet or 2V2 storeys. C. Front Yard: (1) A front yard shall be provided having a depth of not less than twenty-four (24) feet. (2) In the case of a site having an average depth of less than one hundred and twenty (120) feet the front yard may be reduced in accordance with Section 11 (IB) of this by-law. (21/6/62—*3995) D. Side Yards: (1) A side yard of not less than 10 percent of the width of the site shall be provided on each side of the building; provided that the maximum width of such side yard need not exceed five feet. (2) In the case of a corner site at the rear of which, whether a lane intervenes or not, is a site fronting on a street which flanks such corner site, the minimum width of the side yard 59 RS-2 104 on the corner site along the flanking street shall l>« in accord-ance with the provisions of Section 11(1) of thin Hy-law. E. Rear Yard: (1) A rear yard shall be provided, the minimum depth of which shall be not less than thirty-five (35) feet. (2) In the case of a site having an average depth of less than one hundred and twenty (120) feet the rear yard may be reduced in accordance with Section 11 (IB) of this by-law. (21/6/62—*3995) Provided always that where the rear of a site abuf.n a lane, the depth of the rear yard may be decreased by the widtli of that por-tion of the lane lying between the rear of the site and the ultimate centre line of the lane. P. Site Area: A site either for a new one-family dwelling or the relocation of an existing one-family dwelling shall have an area of not less than 4,800 square feet, except in the case of a lot of lender area, on record in the Land Registry Office for the Vancouver Land Regis-tration District. G. Floor Space Ratio: The floor space ratio shall in no case exceed 0.45. For the purposes of this schedule, in computing the floor space ratio the floor area of the building shall include the total area of all the floors of all the buildings on the site, including accessory buildings (measured to the extreme outer limits of the building), except for areas of floors used for parking purpose.1! and areas of cellars or basements which are not used as habitable accommo-dation or access to habitable accommodation. (4/7/61—*3926) H. Off-street Parking Spaces: Off-street parking spaces shall be provided and maintained as required by, and in accordance with the provisions of Section 12 of this By-law. J. Off-street Loading Spaces: Loading and unloading spaces shall be provided and maintained as required by and in accordance with the provision.1} of Section 13 of this By-law. K. Advertisements: Advertisements, bulletin boards, or identification fdgns are not permitted in the (RS-2) district except as provided in Section 10(21) of this By-law. 2. Uses which may be permitted subject to special approval by the Technical Planning Board: With the approval of the Technical Planning Board development per-mits may be issued for the following uses. If the development permit is granted it shall be subject to such conditions and regulations as the Technical Planning Board may decide. (18/12/62—M031) RS-2 6 0 A . Uses (Group A ) : (1) The conversion of an existing building into dwelling units or housekeeping or sleeping units in any case where such exist-ing building, by reason of its age and size, is deemed to be un-suitable for its present use; in the granting of a development permit the Technical Planning Board shall have regard to the regulations for the (RM-1) and (RM-2) schedules and also to the amenity of the neighbourhood, and shall notify such ad-joining property owners as the said Board deem necessary. (IA) A two-family dwelling on a site not less than 7,200 square feet in area, subject to the (RT-2) Two-Family Dwelling Dis-trict regulations and subject to notification of such adjoining property owners as the Technical Planning Board deeni3 necessary. (24/3/70—-*4487) (IB) Town houses and apartment buildings subject to the (RM-1) Multiple Dwelling District regulations, and subject to notifi-cation of such adjoining property owners as the Technical Planning Board deems necessary. (24/3/70—*4487) (2) A dwelling unit or housekeeping or sleeping unit other than one granted a development permit in accordance with clause (1) above which has been installed or used prior to June 18th, 1956, with or without one or more of the required City permits may be granted a development permit limited in time; before granting a development permit for such conversion the Tech-nical Planning Board shall notify such adjoining property owners as the said Board deem necessary. (3) The conversion of an existing building into a boarding or rooming house in any case where such existing building, by reason of its age and size is deemed to be unsuitable for its present use; before granting a development permit for such conversion the Technical Planning Board shall have regard to the regulations of the R M schedules and also to the amenity of the neighbourhood, and shall notify such adjoining property owners as the said Board deem necessary. (4) A dwelling which has been altered or used for a boarding or rooming house, other than one granted a development permit in accordance with clause (3) above, which has been installed or used prior to June 18th, 1956, with or without one or more of the required City permits, may be granted a development permit limited in time; before granting a development permit for such conversion the Technical Planning Board shall notify such adjoining property owners as the Board deem necessary. (5) School (public or private) subject to the provisions of Section 11 (7A), and kindergarten, day-care school, creche or day nursery. (6) Park or playground. (7) Golf course. (8) Truck gardens, nurseries, and greenhouses for propagating 61 RS-2 106 and cultivating. (9) Tourist courts subject to the provisions of Section 11(5) of this By-law. (10) The deposit or extraction of material so as to alter the con-figuration of the land. (11) Home craft or occupation provided that there is nothing to indicate from the exterior that the building is being utilized for any purpose other than that of a dwelling; that there is no commodity sold upon the premises and that no person other than one member of the immediate family residing there is engaged in such craft or occupation on the premises. (12) Parking area (public) ancillary to a principal use on an adjacent site. (13) Buildings or uses customarily accessory to the above uses and accessory buildings or uses to dwellings other than those provided for in Section 1 of this schedule. B. Uses (Group B) which may only be granted by the Technical Plan-ning Board after consultation with the Vancouver City Planning Commission: (1) Stadium or similar place of assembly. (2) Community centre. (3) Church, subject to the provisions of Section 11(7) of this By-law. (4) A new building specifically designed for a Hospital or Personal Care Home, excluding a mental hospital or hospital for the treatment of animals, subject to the provisions of Section 11 (15) of this by-law. (7/11/63—*4077) (4A) The conversion of an existing building into a Hospital or Per-sonal Care Home, excluding a mental hospital or hospital for the treatment of animals; before granting the development permit for such conversion, the Technical Planning Board shall be satisfied that the existing building is suitable for such, use, .... .having particular regard to the size of the site and building, open spaces on the site, proximity of adjacent buildings, and the amenity of the neighbourhood and shall notify adjacent property owners. (7/11/63—*4077) (5) Institution of a religious, philanthropic, or charitable char-acter. (6) Public utility. (7) Building or use essential in this district required by a public authority. (8) Building or use customarily accessory to the above uses. (9) Local area activity centre. (2/4/74—*4763) RS-2 62 (RT-2) TWO-FAMILY DWELLING DISTRICT SCHEDULE: (Duplex and Scmi-Detached) (9/9/65—*4196) 1. Uses Permitted and Regulations: Subject to all the provisions of this by-law on any site within any dis-trict denned, designated or described in this by-law as an (RT-2) District the only uses permitted, and the only uses for which develop-ment permits may be issued are those contained in Sections 1 and 2 hereof. A. Uses: (1) One-family dwelling subject to the same regulation as required in the (RS-1) schedule. (2) Two-family duplex dwelling. (3) Two-family semi-detached dwelling on sites of not less than 49 feet frontage. (4) The keeping of not more than two boarders or lodgers or not more than five foster or day-care children in each dwelling unit. (22/3/66—*4234) (5) A building or use customarily accessory to the above uses (except for another dwelling unit) provided that: (a) all accessory buildings are located in the rear yard and in no case are less than five feet from a flanking street subject also to the provisions of Section 11(1) of this by-law; (b) the total accessory buildings do not occupy an area greater than 25 percent of the minimum rear yard pre-scribed in this schedule, or 460 square feet, whichever is the greater; (c) no accessory building shall exceed one storey or 10 feet in height; (d) not more than two-thirds of the width of the rear yard of any lot shall be occupied by accessory buildings; (e) no accessory building shall be closer than 12 feet to any dwelling on the property. B. Height: The height of a building shall not exceed two storeys plus a cellar or one storey plus a basement. C . Front Yard: (1) A front yard shall be provided having a depth of not less than twenty-four (24) feet. (2) In the case of a site having an average depth of less than one hundred and twenty (120) feet the front yard may be re-duced in accordance with Section 11 (IB) of this by-law. D. Side Yards: (1) A side yard of not less than 10 percent of the width of the site shall be provided on each side of the building; provided 75 RT-2 that the maximum width of such side yard need not exceed five feet. (2) In the case of a corner site at the rear of which, whether a lane intervenes or not, is a site fronting on a street which flanks such corner site, the minimum width of the side yard on the corner site along the flanking street shall be in accordance with the provisions of Section 11(1) of this by-law. E . Rear Y a r d : (1) A rear yard shall be provided, the minimum depth of which shall be not less than thirty-five (35) feet. (2) In the case of a site having an average depth of less than one hundred and twenty (120) feet the rear yard may be reduced in accordance with Section 11 (IB) of this by-law. Provided always that where the rear of a site abuts a lane, the depth of the rear yard may be decreased by the width of that portion of the lane lying between the rear of the site and the ultimate centre line of the lane. F . Site A r e a : A site for a new two-family dwelling or the relocation of an ex-isting two-family dwelling shall have an area of not less than 4,800 square feet, except in the case of a lot of not less than 3,800 square feet, on record in the Land Registry Office for the V a n -couver Land Registration District prior to September 7th, 1965. G. Floor Space Ratio: The maximum floor space ratio shall in no case exceed 0.45. In computing the floor space ratio, all floors, whether earth floors or otherwise (with ceilings of more than 4 feet in height) of all buildings shall be included, both above and below ground (measur-ed to the extreme outer limits of the buildings) except for parking areas the floor of which is at or below the highest point of the finished grade around the building. For the purpose of this section the gross cross-sectional areas of stairways, fire escapes, elevator shafts, chimneys and any other services which, in the opinion of the Director of Planning, are similar to the foregoing, shall be included as floor area at each floor at which they are located; bal-conies, canopies, sundecks and any other appurtenances which, in the opinion of the Director of Planning, are similar to the fore-going, may be excluded from floor area measurement provided the total floor area of all such excluded items does not exceed 8 per-cent of the permitted floor area. Patios and roof gardens also may be excluded from floor area measurement provided that any sunroofs or walls forming part thereof are approved by the Director of Planning. H. Off-Street Parking Spaces: Off-street parking spaces shall be provided and maintained as re-quired by, and in accordance with the provisions of Section 12 of RT-2 76 this by-law. . J. Off-Street Loading Spaces: Loading and unloading spaces shall be provided and maintained as required by, and in accordance with the provisions of Section 13 of this by-law. K. Advertisements: Advertisements, bulletin boards, or identification signs are not per-mitted in the (RT-2) District except as provided in Section 10(21) of this by-law. Uses which may be permitted subject to special approval by the Technical Planning Board: With the approval of the Technical Planning Board development per-mits may be issued for the following uses. If the development permit is granted it shall be subject to such conditions and regulations as the Technical Planning Board may decide. A. Uses (Group A) (1) Group Houses subject to the provisions of Section 11(6) of this by-law. (2) Town houses and apartment buildings subject to the (RM-1) Multiple Dwelling District regulations and subject to notifi-cation of such adjoining property owners as the Technical Planning Board deems necessary. (24/3/70—*4487) (3) The conversion of an existing building into dwelling units or housekeeping or sleeping units in any case where such exist-ing building by reason of its age and size is deemed to be unsuitable for its present use; before granting a development permit the Technical Planning Board shall have regard t o the regulations for the multiple dwelling districts and also t o the amenity of the neighbourhood. (4) A dwelling unit or housekeeping or sleeping unit other than one granted a development permit in accordance with clause (3) above which has been installed or used prior to June 18th, 1956, with or without one or more of the required City permits may be granted a development permit limited in time. (5) A new boarding or rooming house not more than two storeys nor 30 feet in height on a site not less than 7,200 square feet in area, and subject to the provisions of subsections F. and G. of Section 1 of the (RM-1) District schedule. The Technical Planning Board shall notify such adjoining property owners as the said Board deems necessary. (5A) The conversion of an existing building into a boarding or rooming house in any case where such existing building, by reason of its age or size, is deemed to be unsuitable for its present use. Before granting a development permit for such conversion the Technical Planning Board shall have regard to 77 RT-2 110 the regulations of the RM Schedules and also to the amenity of the neighbourhood, and shall notify such adjoining pro-perty owners as the said Board deems necessary. (6) A building which has been altered or used for a boarding or rooming house, other than one granted a development permit in accordance with clause (5) above, which has been installed or used prior to June 18th, 1956, with or without one or more of the required City permits may be granted a development permit limited in time. (7) A new fraternity or sorority house not more than two storeys nor 30 feet in height on a site not less than 7,200 square feet in area, and subject to the provisions of subsections F. and G. of Section 1 of the (RM-1) District Schedule. The Technical Planning Board shall notify such adjoining property owners as the Board deems necessary. (7A) The conversion of an existing building into a fraternity or sorority house in any case where such existing building, by reason of its age or size, is deemed to be unsuitable for its present use. Before granting a development permit for such conversion the Technical Planning Board shall have regard to the regulations of the RM Schedules and also to the amenity of the neighbourhood, and shall notify such adjoining property owners as the said Board deems necessary. (8) School (public or private) subject to the provisions of Section 11 (7A), and kindergarten, day-care school, creche, or day nursery. (9) Park or playground. (10) Golf Course. (11) Truck gardens, nurseries, and greenhouses, for propagating and cultivating. (12) Tourist court subject to the provisions of Section 11(5) of this by-law. (13) The deposit or extraction of material so as to alter the con-figuration of the land. (14) Homecraft or occupation provided that there is nothing to indicate from the exterior that the building is being utilized for any purpose other than that of a dwelling; that there is no commodity sold upon the premises and that no person other than one member of the immediate family residing there is en-gaged in such craft or occupation on the premises. (15) Parking area (public) ancillary to a principal use on an ad-jacent site. (16) Club or Lodge (fraternal) provided that no commercial act-ivities are carried on. (17) Buildings or uses customarily accessory to the above uses and accessory buildings or uses to dwellings other than those provided for in Section 1 of this schedule. RT-2 78 B. USES (Group B) which may only be granted by the Technical Planning Board after consultation with the Vancouver City Plan-ning Commission: (1) Stadium or similar place of assembly. (2) Aircraft landing place. (3) Community centre. (4) Church, subject to the provisions of Section 11(7) of this by-law. (5) A new building specifically designed for a Hospital or Personal Care Home, excluding a mental hospital or hospital for the treatment of animals, subject to the provisions of Section 11(15) of this by-law. (6) The conversion of an existing building into a Hospital or Per-sonal Care Home, excluding a mental hospital or hospital for the treatment of animals; before granting a development permit for such conversions, the Technical Planning Board shall be satisfied that the existing building is suitable for such use, having particular regard to the size of the site and build-ing, open spaces on the site, proximity of adjacent buildings and the amenity of the neighbourhood, and shall notify ad-jacent property owners. (7) Institution of a religious, philanthropic, or charitable char-acter. (8) Public utility. (9) Building or use essential in this district required by a public authority. (10) Building or use, customarily accessory to the above uses. (11) Local area activity centre. (2/4/74—*4763) 79 RT-2 -3) MULTIPLE DWELLING DISTRICT SCHEDULE: (Medium Density) (17/7/61—*3926) Uses permitted and regulations: Subject to all the provisions of this by-law on any site within any district defined, designated or described in this by-law as an (RM-3) District the only uses permitted, and the only uses for which develop-ment permits may be issued are those contained in Sections 1 and 2 hereof. (18/12/62—*4031) A. Uses; (1) One-family dwelling but subject to the same regulations as required in the (RS-1) schedule. (2) Two-family dwelling but subject to the same regulations as required in the (RT-2) schedule. (3) Apartment building. (4) Dwelling units in basements, subject to the provisions of Sec-tion 11(3), in any building: (a) in respect of which the building permit is dated on or after January 1st, 1951, and (b) which is designed or erected exclusively for use as an apartment building and is not a building converted to such use. (13/8/57—*3649) (5) The keeping of not more than two boarders or lodgers or not more than five foster or day-care children in each dwelling unit. (22/3/66—*4234) (6) Boarding or rooming house. (7) Fraternity or Sorority house. (8) A building or use customarily accessory to the above uses (except for another dwelling unit), provided that: (a) all accessory buildings are located in the rear yard and in no case are located closer to the flanking street than the width of the side yard required for the principal building; (b) the total accessory buildings do not occupy an area greater than 25 percent of the minimum rear yard pre-scribed in this schedule, or 460 square feet, whichever is the greater; (c) no accessory building shall exceed 10 feet in height; (d) no more than two-thirds of the width of the rear yard of any lot shall be occupied by accessory buildings; (e) no accessory building shall be closer than 12 feet to any dwelling on the property; (f) no accessory building shall obstruct the daylight access as required by this by-law for any residential use. B. Height and Length On any site the height of a building shall not exceed 120 feet, 99 RM-3 provided, however, that where any portion or portions of a build-ing extend above a height of 35 feet, the maximum length of any such portion or portions combined shall in no case exceed an amount equal to 25 percent of the sum of the average depth of the site and the average width of the site. For purposes of thi3 subsection, where it is proposeu to erect a building in two or more parts (towers), a site may be interpreted as two or more sites as the case may be, provided that the area of each such site so created is 25,000 sq. ft. or more, and the parts of the building (towers) are not less than 80 feet apart. The height of a building shall be the vertical distance between the finished grades of the site and a hypothetical surface which is parallel to the finished grades of the site. It shall be assumed that the finished grades within the outer walls of the building are formed by straight lines joining contours on the finished grades at the outer wall of the building. (21/7/64—*4119) C. Front Yard: A front yard shall be provided having a depth of not less than 20 feet. D. Side Yards: (1) Side yards shall be provided on each side of the building such that the outer walls of the building be contained within 135 degrees horizontal angles subtended from all points along the side property lines, provided however, in no case shall the side yard be less than 7 feet. (2) In the case of a corner site where the side yard adjoins a flanking street, the above containing angle is not applicable but the side yard shall be 20 percent of the width of the site, provided however, this amount shall be increased by one foot, or fraction thereof, for every 5 feet by which the highest height of the building exceeds 40 feet (measured as in B above) but in no case shall it be less than 10 feet nor need it be more than 20 feet. E. Rear Yard: A rear yard shall be provided the minimum depth of which shall be not less than 35 feet, provided however, this amount may be re-duced to 25 feet in the following cases: (1) Where the building abutting the rear yard is not more than 30 feet wide nor less than 25 feet from any adjoining site. (2) Where the average distance from the rear line of the site to the rear of the building taken over the full width of the site is not less than 35 feet and provided further that no portion of such building, abutting such rear yard so reduced, shall have a width of more than 50 feet nor be less than 25 feet from any adjoining site. Provided that where the rear of the site abuts a fully or partially RM-3 100 dedicated lane the minimum depth of the rear yard or the average depth of the rear yard, as the case may be, may be decreased by the width of that portion of the lane lying between the rear of the site and the ultimate centre line of the lane. F. Daylight Access (1) From the outside of the mid-point of the exterior wall (walls) of every habitable room there shall be an unobstructed view for a distance of not less than 80 feet, measured horizontally 3 feet above the floor of the habitable room. Such view shall extend through either a continuous horizontal arc of not less than 50 degrees, or through two or more horizontal arcs which in the aggregate contain not less than 70 degrees. For the 'purpose of this subsection the following shall be considered as obstructions: (a) The theoretically equivalent buildings located on any ad-joining sites in any R district in a corresponding position by rotating the plot plan of the proposed building 180 degrees about a horizontal axis located on the property lines of the proposed site; (b) Part of the same building including permitted pro-jections ; (c) Accessory buildings located on the same site as the principal building. (d) The maximum size building permitted under the approp-riate C or M schedule if the site adjoins a C or M site. (2) For the purpose of this subsection, a kitchen shall not be counted as a habitable room unless its area is greater than 10 percent of the total floor area of the dwelling unit in which it is situated, or 70 square feet, whichever is the greater. G. Vertical Angle of Daylight Obstruction In the case of buildings of over 35 feet in height (measured from the finished grade at all points around and adjacent to the build-ing) no part thereof shall project above lines extending over the site at right angles from: (1) All points along the ultimate centre line of the street (or streets) in front of the site and inclined at an average angle of 25 degrees to the horizontal. (2) All points along the rear boundary line of the site or the ultimate centre line of the lane where one has been dedicated, and inclined at an average angle of 25 degrees to the horizon-tal. (3) All points along the interior side boundary (or boundaries) of the site at ground level and inclined at an average angle of 30 degrees to the horizontal. (4) In the case of a corner site, all points along the ultimate centre 101 RM-3 (3) The conversion into dwelling units of an existing building, other than, one granted a development permit in accordance with Section 1 of this schedule; before granting a development permit for such conversion the Technical Planning Board shall have regard to the regulations of Section 1 of this sche-dule and also to the amenity of the neighbourhood. (4) The conversion of an existing building into housekeeping or sleeping units in any case where such existing building, by reason of its age and size, is deemed to be unsuitable for its present use; before granting a development permit for such conversion the Technical Planning Board shall have regard to the regulations of Section 1 of this schedule and also to the amenity of the neighbourhood. (5) A dwelling unit or housekeeping or sleeping unit other than one granted a development permit in accordance with this schedule which has been installed or used prior to June 18th, 1956, with or without one or more of the required City per-mits, may be granted a development permit limited in time. (6) The conversion into a boarding or rooming house of an exist-ing building, other than one granted a development permit in accordance with Section 1 of this schedule; before granting a development permit for such conversion the Technical Plan-ning Board shall have regard to the regulations of Section 1 of this schedule and also to the amenity of the neighbourhood. (7) A building which has been altered or used for a boarding or rooming house, other than one granted a development permit in accordance with clause (6) above, which has been installed or used prior to June 18th, 1956, with or without one or more of the required City permits, may be granted a development permit limited in time. (8) School (public or private), kindergarten, day-care school, creche or day nursery. (9) Park or playground. (10) Golf course. (11) Truck gardens, nurseries and greenhouses, for propagating and cultivating. (12) Tourist courts, subject to the provisions of Section 11 (5) of this by-law. (13) The deposit or extraction of material so as to alter the con-figuration of the land. (14) Home craft or occupation, provided that there is nothing to indicate from the exterior that the building is being utilized for any purpose other than that of a dwelling, that there is no commodity sold upon the premises and that no person other than one member of the immediate family residing there is engaged in such craft or occupation on the premises. RM -8 104 (15) Parking area (public) ancillary to a principal use on an ad-jacent site. (16) Club, or Lodge (fraternal), provided that no commercial activities are carried on. (17) Buildings or uses customarily accessory to the above uses and accessory buildings or uses to dwellings, other than those provided for in Section 1 of this schedule. B. Uses (Group B) which may only be granted by the Technical Planning Board after consultation with the Vancouver City Planning Commission: (1) Stadium or similar place of assembly. (2) Community centre. (3) Church, subject to the provisions of Section 11 (7) of this by-law. (4) A new building specifically designed for a Hospital or Personal Care Home, excluding a mental hospital or hospital for the treatment of animals; in granting a development permit the Technical Planning Board shall have regard to the amenity of the neighbourhood. (7/11/63—*4077) (4A) The conversion of an existing building into a Hospital or Per-sonal Care Home, excluding a mental hospital or hospital for the treatment of animals; before granting the development permit for such conversion, the Technical Planning Board shall be satisfied that the existing building is suitable for such use, having particular regard to the size of the site and building, open spaces on the site, proximity of adjacent buildings and the amenity of the neighbourhood, and shall notify adjacent property owners. (7/11/63—*4077) (5) Institution of a religious, philanthropic, or charitable charac-ter. (6) Public utility. (7) Building or use essential in this district required by a public authority. (8) Building or use customarily accessory to the above uses. (9) Local area activity centre. (2/4/74—*4763) 105 RM-3 The (CRM-2) District Schedule is designed to accommodate a highly urban environment embodying a compatible mixture of commercial residential and ancillary uses. The regulations are in-tended to positively encourage low profile development designed to optimize the potential amenities inherent in the topography and location of this district. (CRM-2) COMMERCIAL/MULTIPLE DWELLING DISTRICT SCHEDULE (30/5/72—*4624) 1. Uses Permitted and Regulations: Subject to all the provisions of this by-law on any site within any district defined, designated or described in this by-law as a (CRM-2) District the only uses permitted, and the only uses for which development permits may be issued are those contained in Sections 1 and 2 hereof. A. Uses: (1) One-family dwelling subject to the same regulation as re-quired in the (RS-1) schedule. (2) Two-family duplex dwelling. (3) Two-family semi-detached dwelling on sites of not less than 49 feet frontage. (4) The keeping of not more than two boarders or lodgers or not more than five foster or day-care children in each dwelling unit. (22/3/66—*4234) (5) A building or use customarily accessory to the above uses (except for another dwelling unit) provided that: (a) all accessory buildings are located in the rear yard and in no case are less than five feet from a flanking street subject also to the provisions of Section 11(1) of this by-law. (b) the total accessory buildings do not occupy an area greater than 25 percent of the minimum rear yard pre-scribed in this schedule, or 460 square feet, whichever is the greater; (c) no accessory building shall exceed one storey or 10 feet in height; (d) not more than two-thirds of the width of the rear yard of any lot shall be occupied by accessory buildings; (e) no accessory building shall be closer than 12 feet to any dwelling on the property. B. Height: The height of a building shall not exceed two storeys plus a cellar or one storey plus a basement. C. Front Yard: (1) A front yard shall be provided having a depth of not less than twenty-four (24) feet. 123 CRM-2 (2) In the case of a site having- an average depth of less than one hundred and twenty (120) feet the front yard may be re-duced in accordance with Section 11 (IB) of this by-law. D. Side Yards: (1) A side yard of not less than 10 percent of the width of the site shall be provided on each side of the building; provided that the maximum width of such side yard need not exceed five feet. (2) In the case of a corner site at the rear of which, whether a lane intervenes or not, is a site fronting on a street which flanks such corner site, the minimum width of the side yard on the corner site along the flanking street shall be in accordance with the provisions of Section 11(1) of this by-law. E. Rear Yard: (1) A rear yard shall be provided, the minimum depth of which shall be not less than thirty-five (35) feet. (2) In the case of a site having an average depth of less than one hundred and twenty (120) feet the rear yard may be reduced in accordance with Section 11 (IB) of this by-law. Provided always that where the rear of a site abuts a lane, the depth of the rear yard may be decreased by the width of that portion of the lane lying between the rear of the site and the ultimate centre line of the lane. F. Site Area: A site for a new two-family dwelling or the relocation of an ex-isting two-family dwelling shall have an area of not less than 4,800 square feet, except in the case of a lot of not less than 3,800 square feet, on record in the Land Registry Office for the Van-couver Land Registration District prior to September 7th, 1965. G. Floor Space Ratio: The maximum floor space ratio shall in no case exceed 0.45. In computing the floor space ratio, all floors, whether earth floors or otherwise (with ceilings of more than 4 feet in height) of all buildings shall be included, both above and below ground (measur-ed to the extreme outer limits of the buildings) except for parking areas the floor of which is at or below the highest point of the finished grade around the building. For the purpose of this section the gross cross-sectional areas of stairways, fire escapes, elevator shafts, chimneys and any other services which, in the opinion of the Director of Planning, are similar to the foregoing, shall be included as floor area at each floor at which they are located; bal-conies, canopies, sundecks and any other appurtenances which, in the opinion of the Director of Planning, are similar to the fore-going, may be excluded from floor area measurement provided the total floor area of all such excluded items does not exceed 8 per-cent of the permitted floor area. CRM-2 124 Patios and roof gardens also may be excluded from floor area measurement provided that any sunroofs or walls forming part thereof are approved by the Director of Planning. H. OfT-Street Parking Spaces: OfF-street parking spaces shall be provided and maintained as re-quired by, and in accordance with the provisions of Section 12 of this by-law. J . Off-Street Loading Spaces: Loading and unloading spaces shall be provided and maintained as required by, and in accordance with the provisions of Section 13 of this by-law. K. Advertisements: Advertisements, bulletin boards, or identification signs are not per-mitted in the (CRM-2) District except as provided in Section 10 (21) of this by-law. Uses which may be permitted subject to special approval by the Technical Planning Board: With the approval of the Technical Planning Board development permits may be issued for the following uses. If the development permit is granted it shall be subject to such conditions and regu-lations as the Technical Planning Board may decide. In the exercise of its discretion, the Technical Planning Board shall also have due regard to the compatibility of the specific use with the local resi-dential environment in terms of scale, and noise and vehicular traffic generation. A. Commercial Uses (Group A): (1) Advertisements and signs. (2) Bakeries retailing on the premises only. (3) Barber or Beauty Shop. (4) Cleaning and dyeing shop (collection and delivery). (5) Launderette or coin-operated drycleaning. (6) Office building. (7) Restaurants (excluding a 'drive-in'). (8) Shoe repair shop. (9) Retail store, business or undertaking catering for the day-to-day needs of residents. (10) Jewellery manufacturing. (11) Any other building or use which is similar to the foregoing buildings or uses, and which in the opinion of the Technical Planning Board will not generate noises, odours, or vehicular traffic incompatible with adjoining residential uses. Before granting a development permit for such building or use the Technical Planning Board shall have regard to the types of buildings and uses which specifically may be permitted in this schedule. 125 CRM-2 B. Other Uses (Group B): (1) Apartment building. (2) Townhouse. (3) Boarding or rooming house. (4) Fraternity or sorority house. (5) Dwelling units in basements, subject to the provisions of Section 11(3) in any building: (a) in respect of which the building permit is dated on or after January 1, 1951 and, (b) which is designed or erected exclusively for use as an apartment building and is not a building converted to such use. (6) The conversion of an existing building into house keeping or sleeping units, in any case where such existing building, by reason of its age and size, is deemed unsuitable for its present use; before granting a development permit for such conversion, the Technical Planning Board shall have regard to the regu-lations of Section 1 of this Schedule and also to the amenity of the neighbourhood. (7) The conversion into dwelling units of an existing building other than one granted a development permit in accordance with Section 1 of this Schedule; before granting a development permit for such conversion the Technical Planning Board shall have regard to the regulations of Section 1 of this Schedule and also to the amenity of the neighbourhood. (8) A dwelling unit or housekeeping or sleeping unit other than one granted a development permit in accordance with this Schedule, which has been installed or used prior to June 18, 1956, with or without one or more of the required City per-mits, may be granted a development permit limited in time. (9) The conversion into a boarding or rooming house of an existing building other than one granted a development permit in ac-cordance with Section 1 of this Schedule; before granting a development permit for such conversion, the Technical Plan-ning Board shall have regard to the regulations of Section 1 of this Schedule and also to the amenity of the neighbourhood. (10) A building which has been altered or used for a boarding or rooming house other than one granted a development permit in accordance with this Schedule which has been installed or used prior to June 18, 1956, with or without one or more of the required City permits may be granted a development per-mit limited in time. (11) School (public or private), kindergarten, day-care school, creche or day nursery. (12) Park or playground. (13) Club, or lodge (fraternal). (14) Homecraft or occupation. (15) Building or use customarily accessory to the above uses. (16) Local area activity centre. (2/4/74—*4763) CRM-2 , 2 6 C. Uses (Group C) which may only be granted by the Technical Plan-ning Board after consultation with the Vancouver City Planning Commission: (1) Community centre. (2) Church, subject to the provision of Section 11(7) of this by-law. (3) A new building specifically designed for a Hospital or Personal Care Home, excluding a mental hospital or hospital for the treatment of animals; in granting a development permit the Technical Planning Board shall have regard to the amenity of the neighbourhood. (4) The conversion of an existing building into a Hospital or Personal Care Home, excluding a mental hospital or hospital for the treatment of animals; before granting a development permit for such conversion, the Technical Planning Board shall be satisfied that the existing building is suitable for such use, having particular regard to the size of the site and build-ing, open spaces on the site, proximity of adjacent buildings and the amenity of the neighbourhood, and shall notify ad-jacent property owners. (5) Institution of a religious, philanthropic, charitable or philozoic character. (6) Public utility. (7) Building or use essential in this district required by a Public Authority. (8) Building or use customarily accessory to the above uses. 3. Regulations subject to special approval by the City Council: In order to encourage the development of buildings designed to take advantage of the steep north-facing slope, the City Council may, in its discretion, permit a building at variance with the regulations set out in Section 1 of this District Schedule after having received a report thereon from the Technical Planning Board and after consultation with the Vancouver City Planning Commission. In the exercise of its discretion, the Council shall also have due regard to the following: A. The provision of private outdoor living space, daylighting, land-scaping, the disposition of the required off-street parking and loading facilities, the location of the building in relation to the site and surrounding streets and buildings, and its overall design. B. For buildings approved under this clause only, Council shall deter-mine the maximum floor area which shall be allowed having partic-ular regard to the factors noted above. In no case however shall: (i) The maximum floor space ratio exceed 1.5, computed or des-cribed in Section l.G. of this CRM-2 Multiple Dwelling District Schedule. (ii) The height of a building exceed thirty-five (35) feet, nor twenty-five (25) feet measured from the centre line level of the nearest street directly southward. 127 CRM-2 (C-1) C O M M E R C I A L DISTRICT S C H E D U L E : (Local) 1. Uses permitted, conditions and regulations: Subject to all the provisions of this by-law on any site within any district denned, designated or described in this by-law as a (C-1) District the only uses permitted, and the only uses for which development permits may be issued are those contained in Sect-ions 1, 2 and 3 hereof. (18/12/62—*4031) A . Uses: (1) Barber or beauty shop. (2) Bakeries retailing on the premises only, not exceeding a total of 2,200 square feet of floor area. (3) Cleaning and dyeing shop (collection and delivery). (4) Deleted 17/12/68—*4395. (5) Launderette, or coin operated dry cleaning. (21/6/62—*3995) (6) Office building. (7) Restaurant (excluding a drive-in). (8) Retail store, catering for the day-to-day needs of residents of the local neighbourhood. (9) Shoe repair shop. (10) Dwelling units in conjunction with and in addition to any of the above uses provided that no portion of the first storey of a building to a depth of 35 feet from the front wall of the building and extending across the full width of the building shall be used for residential purposes except for entrances to such residential part. (10/9/62—*4019) (11) The keeping of not more than two boarders or lodgers or not more than five foster or day-care children in each dwelling unit. (22/3/66—*4234) (12) A building or use which is customarily accessory to the above principal buildings or uses, except for a building or use which is only listed as a principal use in the (CM-1), (M-l) or (M-2) Schedules, provided that: (a) All accessory buildings are located in a rear yard and sub-ject also to the provisions of Section 11 (1) of this By-law. (b) All accessory buildings shall occupy an area of not greater than ten percent of the area of the site. (c) No accessory building shall exceed one storey or 12 feet in height. (d) No accessory building shall obstruct the daylight access as required by this By-law for any residential use. (e) All accessory uses of the type which would not be per-mitted as principal uses under Section 1 of this schedule shall occupy an area of not more than 25 percent of the gross floor area of the principal use, and shall be located within the principal building. 137 C-1 B. Conditions of Use: (1) Every business or undertaking shall be conducted wholly with-in a completely enclosed building except for parking and load-ing facilities, a gasoline service station, subject to the pro-visions of Section 11(10) of this by-law, and signs or advert-isments. (22/4/69—*4423) ( 2 ) Goods sold shall consist primarily of new merchandise. C. Front Yard: A front yard shall be provided of not less than 2 4 feet in depth. D. Side Yard: (1) No side yard shall be required provided however that where a (C-1) Commercial District adjoins any R district without the intervention of a street or lane, the following side yards shall be provided: (a) Three feet in the case of an RA, RS or RT district. (b) Five feet in the case of an RM district. If a side yard in a (C-1) district be provided where not required by the provisions of this By-law, the said side yard shall be not less than three feet in width. ( 2 ) In the case of a corner site, at the rear of which, whether a lane intervenes or not, is a site fronting on a street which flanks such corner site, the minimum width of the side yard on the corner site along the flanking street shall be in accord-ance with the provisions of Section 11(1) of this By-law. E. Rear Yard: A rear yard shall be provided the minimum depth of which shall be not less than 35 feet; provided however that where the rear line of the site adjoins a dedicated lane the minimum depth of the rear yard may be reduced by the width of that portion of the lane equal to the distance from the ultimate centre line of the lane to the rear line of the site. F. Height: The height of a building shall not exceed 30 feet nor two storeys. G. Horizontal Light Angle for Residential Use: Where part of the building is used for residential purposes: (1) The window of every habitable room shall be not less than 10 feet from the interior side boundary of the site onto which it faces. (2) Every window shall permit of an unobstructed view for a dis-tance of not less than 80 feet, measured horizontally from its centre at sill level. Such view shall extend through either a continuous horizontal arc of not less than 50 degrees, or through two or more horizontal arcs, which in the aggregate contain not less than 70 degrees; provided however the above C-1 138 arcs may be reduced from 50 degrees to 40 degrees, and 70 degrees to GO degrees, respectively, in the case of a building of two storeys or less in height; for the purpose of this subsect-ion the following shall be considered as obstructions: (a) The theoretically equivalent building, if located on any adjoining sites in any R district in a corresponding posi-tion by rotating the plot plan of the proposed building 180 degrees about a horizontal axis located on the prop-erty lines of the proposed site. (b) Part of the same building, including permitted projec-tions. (c) Accessory buildings located on the same site as the prin-cipal building. (d) The maximum size building permitted under the appro-priate C or M schedule if the site adjoins a C or M site. (3) Where a window is greater in area than the minimum required under the Building By-law, the above conditions may be tested against the least restrictive portion of the window equal in area to the required minimum. For the purpose of this sub-section, a kitchen shall not be counted as a habitable room unless its area is greater than ten percent of the total floor area of the dwelling unit in which it is situated, or 70 square feet, whichever is the greater. H. Floor Space Ratio: The floor space ratio shall in no case exceed 1.20, provided however that where a building is used in part for residential purposes every square foot of the floor area used for residential purposes shall be counted as the equivalent of 21/2 square feet for the purposes of this section. For the purposes of this schedule, in computing the floor space ratio the floor area of the building shall include the total area of all the floors of all the buildings on the site, including accessory buildings (measured to the extreme outer limits of the building), except for areas of floors used for parking purposes and areas of cellars or basements which are not used as habitable accommodation or access to habitable accommodation. In addition, balconies, canopies, sundecks and other appurtenances which, in the opinion of the Director of Planning, are similar to the foregoing, may be excluded from the floor area measurement, provided that the total floor area of all such excluded items does not exceed eight percent of the permitted floor area. (30/8/66—*4260) J. Off-street Parking Spaces: Off-street parking spaces shall be provided and maintained as required by, and in accordance with the provisions of Section 12 of this By-law. K. Off-street Loading Spaces: Loading and unloading spaces shall be provided and maintained as 139 C-1 required by, and in accordance with the provisions of Section 13 of this By-law. L. Advertisements and Signs: No advertisements, bulletin boards, or identification signs are per-mitted in the (C-1) district except as provided in Section 10(21) of this By-law. . Uses which may be permitted subject to special approval by the Tech-nical Planning Board: With the approval of the Technical Planning Board development per-mits may be issued for the following uses. If the development permit is granted it shall be subject to such conditions and regulations as the Technical Planning Board may decide. (18/12/62—*4031) Uses: (1) Building or use required by a public authority. (2) Cleaning and dyeing shop. (3) Club, or Lodge (fraternal). (4) Community centre. (5) Deposit or extraction of material so as to alter the configurat-ion of the land. (6) Parking Garage (Public). (30/12/57—*3671) (7) Home craft or occupation. (8) Hospital or personal care home, excluding a mental hospital or hospital for the treatment of animals. (21/6/62—*3995) (9) Institutions of a religious, philanthropic, charitable or phil-ozoic character. (10) Park or playground. (11) Parking area (public). (12) Public utility. (13) Radio and television broadcasting and receiving masts and antennae (commercial). (14) Radio broadcasting and receiving station for motor vehicles, trains, watercraft and aircraft. (15) School (public or private), kindergarten, day-care school, creche or day nursery. (16) Stadium, curling rink, ice rink, roller rink, race track, gym-nasium or similar place of assembly. (17) Any other building or use which is not specifically listed in any schedule of this By-law, and which is similar to the fore-going buildings or uses; before granting a development permit for such building or use the Technical Planning Board shall have regard to the type of buildings and uses which specific-ally may be permitted in this schedule. (12/3/57—*3622) (18) The use of a site for purely residential purposes, if the site has unusual peculiarities of location, such use to include one and two-family dwellings only. C-1 140 (19) The conversion into dwelling units of an existing building, other than one granted a development permit in accordance with Section 1 of this schedule; before granting a development permit for such conversion the TechnicalPlanning Board shall have regard to the regulations of Section 1 of this schedule and also to the amenity of the neighbourhood. (20) A dwelling unit other than one granted a development permit in accordance with clause (19) above, or a housekeeping or sleeping unit which has been installed or used prior to June 18th, 1956, with or without one or more of the required City permits may be granted a development permit limited in time. (21) A building which has been altered or used for a boarding or rooming house and which has been installed or used prior to June 18th, 1956, with or without one or moi*e of the required City permits may be granted a development permit limited in time. (22) Any building or use which can be considered as accessory to the above uses and to the uses listed in Section 1 of this sched-ule, other than those accessory buildings or uses for which provision is made in such section, subject to: (a) Al l accessory buildings occupying an area of not greater than ten percent of the area of the site. (b) All accessory uses occupying an area of not greater than one-third the total gross floor area of all the buildings on the site. Uses which may be permitted subject to special approval by the City Council: Development permits may be issued for developments comprising the following uses subject to such uses first of all being approved by the City Council. Before giving such approval, Council shall refer the application for such permit to the Vancouver City Planning Com-mission and the Technical Planning Board for consideration and report. If a development permit is granted, it shall be subject to such condi-tions and regulations as the City Council may impose, having due regard to the amenity of the district and to the intent of the by-law: (1) Gasoline service station, subject to the provision of Section 11(10). (17/12.68—*4395) 141 C-1 (C-2) COMMERCIAL DISTRICT SCHEDULE: (Suburban) 1. Uses permitted, conditions and regulations: Subject to all the provisions of this by-law on any site within any dis-trict defined, designated or described in this by-law as a (C-2) District the only uses permitted and the only uses for which development permits may be issued are those contained in Sections 1, 2 and 3 hereof. (18/12/62—*4031) A . Uses: (1) Advertisements, billboards and signs subject to the provisions of Section 10(21) of this By-law. (16/7/56—*3583) (2) Auction room. (3) Bakeries retailing on the premises only, not exceeding a total of 2,200 sq. ft. of floor area. (4) Billiard and pool hall. (5) Cleaning and dyeing shop. (6) Frozen food lockers. (7) Parking Garage (Public). (30/12/57—*3671) (8) Deleted 17/12/68—*4395. (9) Office building. (10) Parking area (public). (11) Radio and television broadcasting and receiving masts and antennae (commercial). (12) Radio broadcasting and receiving station for motor vehicles, trains, watercraft and aircraft. (13) Restaurant (excluding a drive-in). (14) Retail stores, business or undertaking catering for the day-to-day needs of residents of several neighbourhoods and com-prising a large district of the City. (15) School (business or commercial). (16) Steam baths. (17) Swimming pool (commercial). (18) Dwelling units in conjunction with and in addition to any of the above uses provided that no portion of the first storey of a building to a depth of 35 feet from the front wall of the build-ing and extending across the full width of the building shall be used for residential purposes except for entrances to such residential part. (10/9/62—*4019) (19) The keeping of not more than two boarders or lodgers or not more than five foster or day-care children in each dwelling unit. (22/3/66—*4234) (20) A building or use which is customarily accessory to the above principal building or uses, except for a building or use which is only listed as a principal use in the (M-l) or (M-2) sched-ules, provided that: 143 C ' 2 (a) A l l accessory buildings are located in a rear yard; (b) Al l accessory buildings shall occupy an area of not greater than ten percent of the area of the site; (c) No accessory building shall exceed one storey or 12 feet in height; (d) No accessory building shall obstruct the daylight access as required by this by-law for any residential use; (e) Al l accessory uses of the type which would not be permit-ted as principal uses under Section 1 of this schedule shall occupy an area of not more than 25 percent of the gross floor area of the principal use, and shall be located within the principal building. B. Conditions of Use: Every business or undertaking, shall be conducted wholly within a completely enclosed building except for parking and loading facilities, a gasoline service station, subject to the provision of Section 11(10) of this by-law, and signs and advertisements. (22/4'69—*4423) C. Front Y a r d : No front yard shall be required. D. Side Y a r d : No side yard shall be required provided, however, that where a (C-2) Commercial District adjoins any R district without the intervention of a street or lane, the following side yards shall be provided: (a) Three feet in the case of an R A , RS or R T district. (b) Five feet in the case of an R M district. If a side yard in a (C-2) district be provided where not required by the provisions of this By-law, the said side yard shall be not less than three feet in width. E . Rear Y a r d : A rear yard shall be provided of not less than 10 feet; provided however that where a building contains residential uses the build-ing shall be set back not less than 25 feet over its full width from the rear line of the site, but such setback need not extend below the lowest storey containing residential uses; and provided fur-ther that where the rear line of a site adjoins a dedicated lane the minimum depth of the rear yard or setback, as the case may be, may be reduced by an amount equal to the distance from the ultimate centre line of the lane to the rear line of the site. F . Height: The height of a building shall not exceed 40 feet nor three storeys. The Technical Planning Board may, in its discretion, permit a building at variance with subsection F of section 1 of this District C-2 144 Schedule after having received a report thereon from the Director of Planning and after consultation with the Vancouver City Plan-ing Commission and after notifying the adjoining owners. In the ex-ercise of its discretion, the Technical Planning Board shall also have due regard to: (a) the height and bulk of the building, and its location in re-lation to the site and surrounding streets and buildings; (b) the amount of open space, plazas, overall design, and the gen-eral amenity of the area; (c) the effect on traffic; (d) the existing and permitted uses and the form and need of each C-2 zone including its relationship to any surrounding residential area. (22, 9.70—*4511) . Horizontal Light Angle for Residential Use: Where part of a building is used for residential purposes: (1) The window of every habitable room shall be not less than 10 feet from the interior side boundary of the site onto which it faces. (2) Every window shall permit of an unobstructed view for a dis-tance of not less than 80 feet, measured horizontally from its centre at sill level. Such view shall extend through either a . continuous horizontal arc of not less than 50 degrees, or through two or more horizontal arcs which in the aggregate contain an arc of not less than 70 degrees; provided however the above arcs may be reduced from 50 degrees to 40 degrees, and 70 degrees to 60 degrees, respectively, in the case of build-ings of two storeys or less in height; for the purpose of this subsection the following shall be considered.as obstructions: (a) The theoretically equivalent buildings if located on any adjoining sites in any R district in a corresponding posi-tion by rotating the plot plan of the proposed building 180 degrees about a horizontal axis located on the prop-erty lines of the proposed site. (b) Part of the same building including permitted projections. (c) Accessory buildings located on the same site as the prin-cipal building. (d) The maximum size building permitted under the appro-priate C or M schedule if the site adjoins a C or M site. (3) Where a window is greater in area than the minimum required under the Building By-law, the above conditions may be tested against the least restrictive portion of the window equal in area to the required minimum. For the purpose of this sub-section, a kitchen shall not be counted as a habitable room unless its area is greater than ten percent of the total floor area of the dwelling unit in which it is situated, or 70 square feet, whichever is the greater. C-2 145 H . Floor Space Ratio: The floor space ratio shall in no case exceed 3.00 provided however that where a building is used in part for residential purposes every square foot of the floor area used for residential purposes shall be counted as the equivalent of 2V2 square feet for the purposes of this section. For the purposes of this schedule, in computing the floor space ratio the floor area of the building shall include the total area of all the floors of all the buildings on the site, including accessory buildings (measured to the extreme outer limits of the building), except for areas of floors used for parking purposes and areas of cellars or basements which are not used as habitable accommodation or access to habitable accommodation. In addition, balconies, canopies, sundecks and other appurtenances which, in the opinion of the Director of Planning, are similar to the foregoing, may be excluded from floor area measurement, provided that the total floor area of all such excluded items does not exceed eight percent of the pei'mitted floor area. (30/8/66—'4260) J. Off-street Parking Spaces: Off-street parking spaces shall be provided and maintained as required by, and in accordance with the provisions of Section 12 of this By-law. K . Off-street Loading Spaces: Loading and unloading spaces shall be provided and maintained as required by, and in accordance with the provisions of Section 13 of this By-law. 2. Uses which may be permitted subject to special approval by the Tech-nical Planning Board: With the approval of the Technical Planning Board development per-mits may be issued for the following uses. If the development permit is granted it shall be subject to such conditions and regulations as the Technical Planning Board may decide. (18/12/62— *4031) A . Uses (Group A ) : (1) Ambulance headquarters. (1A) Animal hospital. (12/3/57—*3622). (2) Automotive repair shop. (3) Automobile and parts showroom. (4) Bakery (manufacturing of bread, pies, and confectionery), other than as provided for in Section 1 of this schedule. (5) Bowling alley. (6) Building or use required by a public authority. (7) Car sales lot. (8) Church. (9) Club, or Lodge (fraternal). (10) Community centre. C-2 146 (11) Deposit or extraction of material so as to alter the configura-tion of the land. (12) Hall. (13) Home craft or occupation. (14) Hospital or personal care home, excluding a mental hospital. (21/6/62—*3995) (15) Hotel, or Motel, provided all sleeping units and dwelling units conform to the daylight access provisions of Section 1 of this Schedule. (29/7/58—*3719) (16) Institution of a religious, philanthropic, charitable or philo-zoic character. (17) Kennels, or the keeping, breeding, raising, training or board-ing of dogs or cats. (18) Lithographing. (20) Park or playground. (21) Pet shop. (22) Public utility. (23) Restaurant: Drive-in (Car-service). (7/11/63—*4077) (23A) Restaurant: Drive-in (Self-service). (7/11/63—*4077) (24) School (public or private), kindergarten, day-care school, creche, or day nursery. (25) School (trade). (26) Sign and showcard writing. (27) Stadium, curling rink, ice rink, roller rink, race track, gym-nasium, or similar place of assembly. (28) Stamp shop (rubber and metal). (28A) Temporary Parking Area (Public). (10/11/64—*4139) (29) Theatre (excluding a drive-in). (30) Tires (retreading and rebuilding). (31) Tourist court subject to the provisions of Section 11(5). (31A) Trailer court subject to the provisions of Section 11 (5A). (13/8/57—*3649) (32) Undertaking establishment. (33) Wholesale business (only to serve local or district needs). (34) Any other building or use which is not specifically listed in any schedule of this By-law, and which, is similar to the foregoing buildings or uses; before granting a development permit for such building or use the Technical Planning Board shall have regard to the types of buildings and uses which specifically may be permitted in this schedule. (12/3/57—*3622) (35) The use of a site for purely residential purposes, if the site has unusual peculiarities of location, such use to include one and two-family dwellings, apartments, boarding or rooming houses and fraternity or sorority houses. (36) The conversion into dwelling units of an existing building other than one granted a development permit in accordance 147 C-2 132 with Section 1 of this schedule; before granting a development permit for such conversion the Technical Flanning Board shall have regard to the regulations of Section 1 of this schedule and also to the amenity of the neighbourhood. (37) The conversion of an existing building into housekeeping or sleeping units in any case where such existing building, by reason of its age and size, is deemed to be unsuitable for its present use; before granting a development permit for such conversion the Technical Planning Board shall have regard to the regulations of Section 1 of this schedule and also to the amenity of the neighbourhood. (38) The conversion of an existing building into a boarding or rooming house in any case where such existing building, by reason of its age and size, is deemed to be unsuitable for its present use; before granting a development permit for such conversion the Technical Planning Board shall have regard to the regulations of the RM schedules and also to the amenity of the neighbourhood. (39) A dwelling unit or housekeeping or sleeping unit other than one granted a development permit in accordance with this schedule which has been installed or used prior to June 18th, 1956, with or without one or more of the required City Permits may be granted a development permit limited in time. (40) A building which has been altered or used for a boarding or rooming house, other than one granted a development permit in accordance with this schedule, which has been installed or used prior to June 18th, 1956, with or without one or more of the required City permits may be granted a development permit limited in time. (41) Any building or use which can be considered as accessory to the above uses and to the uses listed in Section 1 of this sched-ule, other than those accessory buildings or uses for which provision is made in such Section, subject to: (a) All accessory buildings occupying an area of not greater than ten percent of the area of the site. (b) All accessory uses occupying an area of not greater than one-third the total gross floor area of all the buildings on the site. B. Uses (Group B) which may only be granted by the Technical Planning Board after consultation with the Vancouver City Plan-ning Commission: (15/9/64—*4125) (1) Aircraft landing place. (2) Building or use customarily accessory to the above uses. 3. Uses which may be permitted subject to special approval by the City Council: (1) Elderly Citzens' Multiple Dwelling Unit Development (Apart-C-2 148 merit Building). A building to be occupied and used solely as a residence for elderly citzens may be approved as a conditional use subject to such conditions, regulations or relaxations as the Council may deem appropriate, having due regard to the height, bulk, density, overall size of development, or any other feature which, in the opinion of the Council may effect the general amenity and welfare of the area, and after Council has received a report regarding the proposed development from the Technical Planning Board and from the Vancouver City Planning Commission and provided the development meets the following conditions: (a) that the development comprises only low rental housing units for the exclusive use of elderly citzens of low income who are unable to purchase adequate accommodation according to their needs; (b) that the owner and operator of the project is a non-profit corporation within the meaning of the "Elderly Citizens' Housing Aid A c t " ; (c) that the development qualifies for a grant-in-aid from the Province of British Columbia under the provisions of the "Elderly Citzens' Housing Aid A c t " ; Before approving the issuance of a development permit for an elderly citizens' multiple dwelling unit development, the Council shall hold a special public meeting to hear representations concern-ing the proposed development from such adjacent owners of real property as the Council deems are likely to be affected; and the Council shall direct that due notice of the special public meeting shall be given to such adjacent owners. (8/11/60—*3884) (2) Development permits may be issued for developments compris-ing the following uses subject to such uses first of all being approved by the City Council. Before giving such approval, Council shall refer the application for such permit to the Vancou-ver City Planning Commission and the Technical Planning Board for consideration and report. If a development permit is granted, it shall be subject to such conditions and regulations as the City Council may impose, having due regard to the amenity of the district and to the intent of the By-law: (a) Gasoline service station, subject to the provisions of Section 11(10). (17/12/68—*4395; 22/4/69—*4423) 149 C-2 (M-1) I N D U S T R I A L DISTRICT S C H E D U L E : (Light) 1. Uses permitted, conditions and regulations: Subject to all tho provisions of this by-law on any site within any dis-trict defined, designated o r described in this by-law as an (M-1) Dis-trict the only uses permitted, and the only uses for which development permits may be issued are those contained in Sections 1 and 2 hereof, provided, however, that development of any land abutting the streets set forth in Schedule " C " to this by-law shall be subject to the addi-tional special regulations contained in Section 11(2) to this by-law. (2/1/63—*4032) A . U ses : (1) Advertisements, billboards and signs subject to the provisions of Section 10(21) of this By-law. (2) Animal hospital. (3) Deleted (17/11/59—*3812) (4) Automotive repair shop. (5) Automobile and parts salesroom. (6) Deleted (17/11/59—*3812) (7) Bag and sack cleaning. (8) Bakery (manufacturing of bread, pies, confectionery). . (9) Battery manufacturing or rebuilding. (10) Boat building (boats not to exceed 80 feet in length). (11) Book bindery. (12) Brewery and distillery. (13) Broom and brush manufacturing. (14) Candy manufacturing. (15) Cannery (fruit and vegetables only). (16) Cigarette and cigar manufacturing. (17) Clothing and garment manufacturing. (18) Cold storage plant. (19) Cosmetics manufacturing. (20) Dairy products manufacturing. (21) Electric equipment manufacturing. (22) Electro-plating. (23) Excelsior manufacturing or storage. (24) Feed and seed storage. (25) Food products manufacturing, processing and packaging (excluding fish and a cannery). (26) Frozen food lockers. (27) Parking garage (public). (30/12/57—*3671) (28) Gasoline service station, subject to the provisions of Section 11(10). (22/4 69—*4423) (29) Hemp and jute products manufacturing. (30) Ice manufacturing. 189 M - J (31) Institution of a religious, philanthropic, charitable or philo-zoic character. (32) Jewellery manufacturing. (33) Kennels or the keeping, breeding, raising, training or boarding of dogs or cats. (34) Laboratory. (35) Laundry, cleaning and dyeing establishment. (36) Lithographing. (37) Mattress manufacturing. (38) Motion picture and television studio. (39) Musical instrument manufacturing. (40) Novelty and toy manufacturing. (40A) Paper box and cardboard products manufacture. (12/3/57—*3622) (41) Parking area (public). (42) Poultry (dressed) wholesale and storage. (43) Public utility on a site not less than 200 feet from any R District. (44) Publishing plant. (45) Radio and television broadcasting and receiving mast3 and antennae (commercial). (46) Radio broadcasting and receiving station for motor-vehicles, trains, watercraft and aircraft. (47) Restaurant. (48) Sausage manufacturing. (49) School (business or commercial). (50) School (trade). (51) Shoe or boot manufacturing. (52) Sign manufacturing. (53) Stamp shop (rubber or metal). (54) Taxidermy. . (55) Tent and awning and allied products manufacturing. (56) Textile manufacturing. (57) Tires retreading or rebuilding. (58) Tool (machine) manufacturing. (59) Toy and novelty manufacturing. (60) Deleted (17/11/59—*3812) (61) Warehouse (general). (31/7/62—*4007) (62) Wax products manufacturing (for derivation of products, see processing of fats, bones, animal products.) (63) Window shade maufacturing. (64) Wholesale business. (65) A building or use which is customarily accessory to the above principal buildings or uses except for a building or use which -1 190 is only listed as a principal use in the (M-2) district, provided that:' (a) All accessory buildings shall occupy an area of not greater than 10 percent of the area of the site, and are not over 12 feet in height. (b) All accessory uses shall occupy an area of not greater than one-third the total gross floor area of all the build-ings on the site. B. Front Yard: No front yard shall be required. C. Side Yard: No side yard shall be required, provided, however, that where an (M-l) Industrial District adjoins any R District without the inter-vention of a street or lane, the following side yards shall be pro-vided: (1) Three feet in the case of an RA, RS, or RT District. (2) Five feet in the case of an RM District. If a side yard in an (M-l) District be provided where not required by the provisions of this By-law, the said side yard shall be not less than three feet in width. D. Rear Yard: A rear yard shall be provided the minimum depth of which shall be not less than 10 feet except as provided hereunder: (1) Where the rear line of a site adjoins a dedicated lane the mini-mum depth of the rear yard may be reduced by an amount equal to the distance from the ultimate centre line of the lane to the rear line of the site. (2) Where a site is sufficiently large and is located within an area where rear access to the site and adjacent sites is not likely to be required, the Director of Planning, in the exercise of his discretion, may waive the rear yard requirement. (21/11/67—*4328) E. Height: The height of a building shall not exceed 100 feet. The Director of Planning, in the exercise of his discretion, may increase the height set forth herein, provided that the said building complies in all other respects with the regulations contained in this section. (21/11/67—*4328) F. Floor Space Ratio: The floor space ratio shall in no case exceed 5.00. For the purposes of this schedule, in computing the floor space ratio the floor area of the building shall include the total area of all the floors of all the buildings on the site, including accessory buildings (measured to the extreme outer limits of the building), 191 M-l 137 except for areas of floors used for parking purposes and areas of cellars or basements which are not used as habitable accommoda-tion or access to habitable accommodation. In addition, balconies, canopies, sundecks and other appurtenances which, in the opinion of the Director of Planning, are similar to the foregoing, may be excluded from floor area measurement, provided that the total floor area of all such excluded items does not exceed eight percent of the permitted floor area. (30/8/66—*4260) G. Off-street Parking Spaces: Off-street parking spaces shall be provided and maintained a s required by, and in accordance with the provisions of Section 12 o f this By-law. H. Off-street Loading Spaces: Loading and unloading spaces shall be provided and maintained a s required by, and in accordance with the provisions of Section 13 o f this By-law. U s e s which may be permitted subject t o special approval b y t h e T e c h -nical Planning Board: With the approval of the Technical Planning Board development per-mits may be issued for the following uses. If the development permit i s granted it shall be subject to such conditions and regulations a s the Technical Planning Board may decide, provided, however, that develop-ment o f any land abutting the streets set forth i n Schedule "C" t o this by-law shall be subject to the additional special regulations con-tained i n Section 11 (2) to this by-law. (2/1/63—*4032) A. U s e s (Group A) (1) Ambulance headquarters. (12/3/57—*3622) (IA) Auction room (sale and storage). (IB) Archery range, golf driving range and miniature rifle range (in the open). (17/11/59—*3812) (2) Automotive manufacture and body building. (2A) Aviaries. (17/11/59—*3812) (3) Billiard and pool hall. (4) Bottling plant (milk or carbonated beverages). (5) Bowling alley. (6) Deleted (22/3/66—*4234) (7) Buildings or runs for the hatching and raising of live poultry, fowl, rabbits, frogs, fish, or worms. (8) Building or use required by a public authority. (9) Cannery (meat, poultry and pickles only). (10) Car sales lot. (11) Chemicals, manufacturing and mixing. (12) Church. M-1 192 line of the flanking street or lane and inclined at an average angle of 25 degrees to the horizontal. For the purpose of computing the average angles of daylight obstruction on each side of the site, each angle shall be multiplied by the length of the applicable portion of the building or site over which such angle applies, and the sum of these products (angle times length applicable) shall be divided by the total length of the corresponding site boundary. For purposes of this section only the principal building shall be considered as an obstruction. (21/7/64—*4119) H . Floor Space Ratio The maximum Floor Space Ratio shall be 1.00 provided however, this amount may be increased as follows: (1) Where the site coverage is 50 percent or less an amount equal to 0.012 may be added for each one percent or fraction there-of by which such coverage is reduced below 50 percent. (2) Where the area of a site exceeds 9,000 square feet and the frontage of such site is 75 feet or more, an amount may be added equal to 0.002 multiplied by each 100 square feet of site area in excess of 9,000 square feet, but in no case shall this amount exceed 0.25. (3) Where parking spaces are provided within the outermost walls of a building or underground (but in no case with the floor of the parking area above the highest point of the finished grade around the building) an amount may be added equal to 0.20 multiplied by the ratio of parking spaces provided which are completely under cover, to the total required parking spaces. (21/7/64—*4119) In computing the floor space ratio, all floors, whether earth floors or otherwise, (with ceilings of more than 4 feet in height) of all buildings, shall be included, both above and below ground (measured to the extreme outer limits of the buildings) except for parking areas the floor of which is at or below the highest point of the finished grade around the building. For the purpose of this section the gross cross-sectional areas of stairways, fire' escapes, elevator shafts, chimneys and any other services which, in the opinion of the Director of Planning, are similar to the foregoing, shall be included as floor area at each floor at which they are located; balconies, canopies, sundecks and any other appurtenances which, in the opinion of the Director of Planning, are similar to the foregoing, may be excluded from floor area measurement, provided the total floor area of all such excluded items does not exceed 8 percent of the permitted floor area. Patios and roof gardens also may be excluded from floor area measurement provided that any sunroofs or walls forming part thereof are approved by the Director of Planning. For purposes of this section site coverage shall be based on the RM-3 102 projected area of the outside of the outermost walls of all build-ings. In the case of a sloping site where a structure is located in or beneath a yard, such structure may be excluded from the site coverage calculation provided that the top of such structure (ex-cluding required earth cover, permitted fence, etc.) is located beneath the average elevation of the portions of the streets, lanes or adjacent sites, located adjacent to such structure, provided in no case shall the top of any portion of such structure extend more than three feet above the adjoining streets, lanes or adjacent sites. (21/7/64—*4119) J . Site Area A site for a new apartment building, boarding or rooming house or fraternity or sorority house, or the relocation of an existing such building shall have an area of not less than 6,000 square feet except in the case of a lot of not less than 5,400 square feet on record in the Land Registry Office for the Vancouver Land Reg-istration District prior to September 7, 1965. (9/9/65—*4196) K . Off-street Parking Spaces Off-street parking spaces for certain uses in this district shall be provided and maintained in accordance with the provisions of Section 12 of this by-law. L. Off-street Loading Spaces Loading and unloading spaces for certain uses in this district shall be provided and maintained in accordance with the provisions of Section 13 of this by-law. M . Advertisements No advertisements, bulletin boards or identification signs are per-mitted in the (RM-3) District, except as provided in Section 10 (21) of this by-law. Uses which may be permitted subject to special approval by the Technical Planning Board: With the approval of the Technical Planning Board development per-mits may be issued for the following uses. If the development permit is granted it shall be subject to such conditions and regulations as the Technical Planning Board may decide. (18/12/62—*4031) A . Uses (Group A) (1) Group Houses subject to the provisions of Section 11 (6) of this by-law. (2) A new two-family dwelling or the relocation of an existing two-family dwelling on a site of less than 6,000 square feet, or a new apartment building, boarding or rooming house or fraternity or sorority house, or the relocation of an existing such building, on a site of less than 6,000 square feet. 103 RM-3 (13) Clay and clay products manufacturing, excluding brick and tile. (14) Cleaning and dyeing shop. (15) Club, or Lodge (fraternal). (16) Community centre. (17) Concrete mixing operations or concrete products manufac-turing. (18) Cooperage works. (19) Deposit or extraction of material so as to alter the configura-tion of the land. (20) Film exchange. (21) Fish market (wholesale). (22) Flour mill. (23) Furniture manufacturing and storage. (24) Gypsum products manufacturing. (25) Hall. (26) Home craft or occupation. (27) Deleted (5/5/60—*3840) (28) Machine shop or blacksmith shop. (28a) Marina (excluding boat building and major repairs to and overhaul of boats). (31/7/73—*4713) (29) Monument or stone works. (30) Office building, subject to it conforming to the vertical light angle provisions of the (C-3) Commercial District. (31) Paint, oil shellac, turpentine or varnish manufacturing, m i x -ing or storage. (32) Park or playground. (33) Pet shop. (34) Plastic products manufacturing. (35) Poultry (live) sales and distribution. (36) Poultry slaughtering market. (37) Public utility other than as provided for in Section 1 of this schedule. (38) Radio and television broadcasting and receiving station (com-mercial) . (39) Retail store, business or undertaking. (40) Sash and door manufacturing. (41) School (public or private), kindergarten, day-care school, creche or day nursery. (42) Sheet metal works. (43) Stable, barn or the keeping, breeding, raising, training, boarding of horses, cattle, goats and sheep. (44) Stadium, curling rink, ice rink, roller rink, race track, gym-nasium, or similar place of assembly. (45) Steam baths. 1 9 3 M-l (46) Storage yard provided it is enclosed by a suitable fence which is painted and neatly maintained at all times. (47) Swimming pool (commercial). (48) Theatre (excluding a drive-in). (49) Truck terminal. (49A) Truck garden, field crop, nursery, berry or bush crops, orchard or pasture land. (17/11/59—*3812) (50) Undertaking establishment. (51) Deleted (31/7/62—"'4007) (52) Welding shop. (53) Wiping rags and cotton waste (bulk storage). (54) A dwelling unit for a caretaker or watchman or other persons similarly employed if such dwelling unit is considered to be essential to the operation of the business or the undertaking. (54A) Temporary Parking Area (Public). (10/11/64—*4139) (55) Any other building or use which is not specifically listed in any schedule of this By-law, and which is similar to the foregoing buildings or uses; before granting a development permit for such building or use the Technical Planning Board shall have regard to the types of buildings and uses which specifically may be permitted in this schedule. (12/3/57—*3622) (55A) A building which has been altered or used for a dwelling unit, housekeeping or sleeping unit, boarding or rooming house, prior to June 18th, 1956, with or without one or more of the required City permits. (56) Any building or use which can be considered as accessory to the above uses and to the uses listed in Section 1 of this schedule, other than those accessory buildings or uses for which provision is made in such Section. B. Uses (Group B) which may only be granted by the Technical Planning Board after consultation with the Vancouver City Plan-ning Commission: (15/9/64—*4125) (1) Aircraft landing place. (2) Building or use customarily accessory to the above uses. -1 194 -1) COMPREHENSIVE DEVELOPMENT DISTRICT SCHEDULE: Uses Permitted: With the approval of the Technical Planning Board development per-mits may be issued for the following uses. If the development permit is granted it shall be subject to such conditions and regulations as the Technical Planning Board may decide. (18/12/62— *4031) ' (1) Comprehensive Unit Development subject to the provisions of Section 11(4) of this By-law. (Schedule of By-laws creating (CD-I) Comprehensive Development zoning and restricting the issuance of Development Permits to certain specified uses) 1. By-Law No. 4065, June 27th, 1963. 2. By-Law No. 4085, Dec. 19th, 1963. 3. By-Law No. 4087, Dec. 30th, 1963. 4. By-Law No. 4104, April 7th, 1964. 5. By-Law No. 4123, Aug. 25th, 1964. 6. By-Law No. 4132, Oct. 27th, 1964. 7. By-Law No. 4143, Nov. 19th, 1964. 8. By-Law No. 4159, Feb. 16th, 1965. 9. By-Law No. 4163, Mar. 9th, 1965. 10. By-Law No. 4175, May 18th, 1965. 11. By-Law No. 4183, July 6th, 1965. (Amends By-Law No. 4065) 12. By-Law No. 4186, July 13th, 1965. 13. By-Law No. 4279, Jan. 4th, 1967. 14. By-Law No. 4295, April 6th, 1967. 15. By-Law No. 4296, April 6th, 1967. 16. By-Law No. 4308, May 16th, 1967. 17. By-Law No. 4319, Aug. 8th, 1967. 18. By-Law No. 4346, Jan. 23rd, 1968. 19. By-Law No. 4349, Mar. 5th, 1968. 20. By-Law No. 4354, Mar. 19th, 1968. (Amends By-Law No. 4065) 21. By-Law No. 4356, April 9th, 1968. 22. By-Law No. 4358, April 9th, 1968. 23. By-Law No. 4377, July 16th, 1968. 24. By-Law No. 4378, July 30th, 1968. 25. By-Law No. 4379, Aug. 6th, 1968. 26. By-Law No. 4393, Dec. 3rd, 1968. 27. By-Law No. 4395, Dec. 17th, 1968. 28. By-Law No. 4412, Mar. 18th, 1969. 29. By-Law No. 4423, Apr. 22nd, 1969. 201 CD-I 30. By-Law No. 4435, July 29th, 19G9. 31. By-Law No. 4446, Sept. 9th, 1969. 32. By-Law No. 4472, Jan. 13th, 1970. 33. By-Law No. 4491, April 28th, 1970. 34. By-Law No. 4492, April 28th, 1970. 86. By-Law No. 4497, May 26th, 1970. 36. By-Law No. 4510, Aug. 11th, 1970. 87. By-Law No. 4512, Sept. 22nd, 1970. (Amends By-Law No. 4065) 38. By-Law No. 4515, Oct. 27th, 1970. 39. By-Law No. 4528, Dec. 22nd, 1970. (Amends By-Law No. 4497) 40. By-Law No. 4532, Jan. 6th, 1971. 41. By-Law No. 4539, Feb. 23rd, 1971. 42. By-Law No. 4542, Mar. 2nd, 1971. 43. By-Law No. 4550, April 20th, 1971. 44. By-Law No. 4557, May 18th, 1971. 45. By-Law No. 4559, June 1st, 1971. 46. By-Law No. 4570, July 27th, 1971. 47. By-Law No. 4580, Oct. 6th, 1971. 48. By-Law No. 4583, Nov. 16th, 1971. 40. By-Law No. 4584, Nov. 16th, 1971. 60. By-Law No. 4596, Jan. 5th, 1972. 51. By-Law No. 4597, Jan. 5th, 1972. 62. By-Law No. 4607, Mar. 7th, 1972. (Amends By-Law No. 4393) 63. By-Law No. 4608, Mar. 7th, 1972. (Amends By-Law No. 4550) 64. By-Law No. 4613, April 10th, 1972. 65. By-Law No. 4626, June 13th, 1972. 56. By-Law No. 4634, Augr. 1st, 1972. 57. By-Law No. 4637, Aug. 1st, 1972. (Amends By-Law No. 4580) 58. By-Law No. 4652, Oct. 24th, 1972. 59. By-Law No. 4665, Nov. 28, 1972. 60. By-Law No. 4670, Dec 5, 1972. 61. By-Law No. 4671, Dec 6, 1972. 62. By-Law No. 4674, Dec. 19, 1972. 63. By-Law No. 4675, Dec 19, 1972. 64. By-Law No. 4676, Dec. 19, 1972. 65. By-Law No. 4677, Dec. 19, 1972. 66. By-Law No. 4678, Dec. 19, 1972. (Amends By-Law No. 4295) 67. By-law No. 4697, May 1, 1973. (Repeals By-law No. 4349) 68. By-law No. 4710, July 17, 1973. 69. By-law No. 4748, Dec. 11, 1973. (Amends By-law No. 4580) 70. By-law No. 4749, Dec. 11, 1973. (Amends By-law No. 4615) 71. By-lay No. 4775, May 28, 1974. CM I CO K o -p I CO a, 6H in a ; i o : 6> o o O o 144 Appendix to Chapter IV F . Printouts f o r Rezoning Types o i o i j j (—• o i o t—~ -r; •"0 j i ! I— cri CNJ j i 1 1 0 0 (Ni j V-t—1 IM! r—i I ! t — O j 1 j < ^ \ j t j 1 — 0 i I ( / • > < < v s r - i j o < f o~i t r - j r i u... \ i '• j \ i 1 u_ i | Ll_ i ! U J } t—Ii o ! i O i o ! •43! 1 1 i p- m sO! UJ! o I r-H M I.U i j L J < r NT LUi (Xii 1 — j i or. r- » < •< •:--J CX1 i<i' I i o Ud O r - i r—4 1 o o i — i o ; j 1— < o O II • i O 0 | i 1 — ct • 0 o. IXi i/i U! o i \ i sT i LL j i co O t j 0 1 r H i | i O! r~ i X i | 1 r - i * ' I • O * j cc j CM j o h- ! i >: i O i z\ i IX Ci' V i J ! ! ! t r—< I LJ i OO K- »' (XI U> £^ \ »—« V ; r- V>' <l i C o a r-1 UJi *~' t UJ LU LO r- n 0L; !X _ J 1 — <_> CO CXJ — ! ° l <3 cc < »—H r - i II 0 0 ^> i i <4 U_ (XI ( _ ) , _ l a i r—. >—. u _ V _ l 1 — ; l/i <i LJ >— LU 1 — r-H f— _» U J ; 1 <r 0 0 U • 9 l_> LJ X ' LU C J O I > UJ O O <Nj «' i—t I-; o I 1 i CXI f I— OO i U.I u . : | O <l. <L U J <JL LO <j ! l <)- 1 - > cc >—• I M O | i u. a: U> ! O o U J o C T a 9 * C 2. -j 0 0 U J J > L_> o ! LL. O U J ti\ 1 [ Q. II oo' LJ < Qt-i IX. d_ i—! U J ; L-- <T N** ! <_ ! o < c Ll_ o LJ O ; 1 U J jC, L-) (—!, UJ 1 1 U_ j »— u. 1 LO-'-. h- U J u.; ; U. z U J Cf. IX ' J J ! • IX. _J —» "—j LL.J C - (VJ * 1 C2 Ci ; j j O J »—i u^. i <; <i OO o ^ 1 — • o I a XL 1—1 ( _ ) 1 j ; 1 — oo ° ! Q a . u . U l O 0 O'; U i i I Ll •-1 i i c_ -> ! u ' ^_ L./ 1 1 n^htb TYPE 2 RS-1 to C-2 C : ZCNEC i v F A K CF CEFErxQENT V£ FI A BL E IS 2.7342 , , STANDARD T J : M E / ^ j 0_F ERROR STATISTIC VARIABLE 1.24883-270 2,26576996 1.000_0C»000. 1. 76611*14 1. 02442551 3,50000000 F-SCLAREC = 0.C950 C L|C- 6 IN - V. A T SC.U'J STATISTIC ( A D J . FCR 1 G I F S ) = 2.3432 _. hU Nb E R CF CESERVATICKS = 12 SL^ OF SOIARED R E S I C I A L S = 93.5752 ST; Ni QARD... F RR 0 R._ _OF_I HE. _R E .GR £ 1 1 1 ON _ = 2.. 05 9 C i ... _.... _ EST1 PMc CF VARI AKCE-CGV AR I ^ NCE M £ T R IX CF ESTIMATED COEFFICIENTS 0.15fcr + C l -C, 156F + C 1 -C.156E+C1 C.312F+C1 IN FEP F N D E N T V A R I A B L E _ c z c i\ E r ESTIMATED CCEFFICIENT 2. £2956791 1.£C9255tC Ln _VA_R I/- p L E S . . .... A 7 4 A 6 5 C TYPE 3 RS-1 to CD-I Z C N E C K E A C F. . I) E £ E N D c . N X.. V A R I A 6 L E . . . . . I S . 4 . 2 7 9 9 E S T I M A T E O S T A N D A P . R V A R I A E L E Z C N E C C C E F F I C I E K T ERROR _L«_C01 6G2..LL 2 . 8 2 6 5 6 0 9 7 1 . 4 1 6 4 6 C 0 6 R - S G U A F . E D = G . l E i l _ C U F f I N - W/LI S C K _S T A T I S T I C ( A C J . F O R 1 GAPS) = C« £ 4 0 2 N L N B F P C F C P S E R v A T I C N S = 2 0 S U M O F S Q U A R E D R E S I D I A L S = i E O . 5 7 7 STANCAPD E R R O R C F T H E SEGPFSSION = 3 . 1 6 7 2 5 T - M E A N C F S T A T I S T I C . 2 • . 8 6 2 0 . 7 2 . 9 4 . 1 . 9 9 5 4 8 1 4 9 V A R I A B L L . l . p O C ' 0 0 0 . 0 0 0 . 5 0 0 0 0 0 0 0 E S T I M A T E L F V A R I A N C E - C C V A P I t. N . C E N A T P I X C F E S T I M A T E C C O E F F I C I E N T S C . I C u E + G l - C ' . l C G c + C l - C . 1 C 0 E + C 1 0 . 2 C 1 E + 0 1 S M P L V E C T O R 2 0 5 2 2 8 t - 1 fi74 A<:5 T Y P E h R T _ 2 T 0 R M"3 r : ZONED * r. AN 0 F_r.i.E£F_NDENI_..VA_R_LAB.L E,..._I_S . 4_._22£2_ C R - S C U ^ E D = U . 6 C 3 4 J J M B - I N - ^ ^ T S C N S T A T I S T I C ( A C J . F O R 0 G A PS . I_^__J._.jG 5j3_ M ' N B E R C F O B S E R V A T I O N S = 2 4 I r- D R F E r-. r; E N T EST IMAT EC ST AN PAR C T-V/.FIABLE COEFFICIENT ERROR STATISTIC 2.42497921 0 . 4 5 9 8 3 1 6 6 . 5 . 2 7 3 6 2 3 4 7 Z O N E D 3 . 9 2 9 0 6 3 9 3 0 . 6 7 9 2 1 6 2 9 5 . 7 8 5 8 7 9 1 4 SUN' CF SUJAPFD RESIDUALS = 6C. 4734 STANLAFD ERROR CF THE REC-RFSSICN = 1.657S5 FSTIKATE CF VARI ANCE-COVARIANCF K A TP. IX CF ESTIMATED COEFFICIENTS 0 . 2 1 1 F + C C - U . 2 1 1 E + 0 0 - 0 . Z 1 1 F + C C C . 4 6 1 E + C C . ...V'-.f-j.f r-.LE 5-...« /74A65 TYPE 5 RT-2 to C-2 C Z O N E D JlL*N_Ci._IJLPJi^ 2.A615 _ _._ „. 11'. PEP E NDE !'.' T ESTIMATED . ST AND ARC I r VAPIAELE COEFFICIENT ERROR STATISTIC _C 3, 17227364 0.36702919 8. 64310932 ZONFC 1.77581406 C.55C54335 3.22556305 F-5CUAFEL = 0.3940 DURE IM-WATSCN STATISTIC. ( A Q j . FOR 0 GAPS) = 2 .0454 . N U M b F R O F OBSERVATIONS = 16 SIM CF SGLARED PESICLALS = 2 1.5537 STANDARD FRROR CF THE REGRESSION = 1 .16065 ESTIMATE CF VARI ANCE-COV A- IANCE MATRIX CF ESTIMATED COEFFICIENTS C. 135E-* 0 C - C . 135F + JC -G.125F+CC 0.3C3F+CC S.VFL VECTCR 247 256 WIW 52 9 00 QztJl.QL V A P I A B L E • 1.OOPCOGOO 0 . 4 4 4 4 4 4 4 2 V AR- I AR LE S . A 74 A 6 5 TYPE 6 RM-3 to C-2 c ZCNED K F A K O F C F P F N O E N T V A R I A B L E IS 3 . 6 7 1 4 ™ I-. : -.—: ._. _ ^ T c> r ?• P P ,\ n E N T E S T 1 M A T F C ST AN CAR E T - MEAN OF V AC I ACL E c C O E F F I C I E N T 5 . 1 7 2 1 7 9 2 2 ERROR 0 . 2 6 4 9 7 3 68 S T AT 1ST IC 1 9 . 51 9 5 7 7 0 0 V A R I A B L £ 1 . 0 0 0 0 0 0 0 3 — — — Z C N E D - 2 . 2 5 1 0 9 3 86 0 . 3 2 4 5 2 5 54 - 6 . 9 3 6 5 6 9 2 1 0 . 6 6 6 6 6 6 6 3 F - S C U A F E D = . . DUF B I N - M I S C N U . 7 E 7 3 S T A T I S T I C U C J . FOR 1 G A P S ) = 2 . 3 3 11 /••LTBER OF OBSERVATIONS = 15 SUM CF SCUAFED RESICLALS = 4.56374 SI A NC A F_C„.F_P.R-O.R OF TEE R EG P E SjS i l N_ 0 . 5 9 2 5 CO ESTIMATE OF VAKI ANCE-CUVARIANCE M A T F I X CF E S T I f A T EC COEFFICIENTS C.702E-C1 - 0 . 7 0 2 E - 0 1 - 0 . 7 C 2 F - C 1 C.1C5E+CC V t- P I /• B L E S A 74*65 TYPE 7 M-1 to RS - 1 C ZCNEC M E A N 0 F DEPENDENT. VARIABLE IS , 4_. JA6_4 R-SCLAREC = 0.4 895 D U F J 3 J N -> AT SON. ST A J I STIC ( A D J . FOR 1 GAPS) f 0...5J.50. NUMBER CF OBSERVATIONS = 53 I f- c F PP*- DENT ESTI MATED . STANDARD . Jrz i l r ^ L i l f VARIABLE COEFFICIENT ERROR STATISTIC VARIABLE C 2.9C44733 C__ _0 .33523 685 . 8.6 6;942 29 l»P..9AQ0.0QSL ZCNEC 2 „ 2 4 6 9 2 C 9 7 0.47863340 6.99266052 0.49056602 S LN OF SCLARED RESIDLALS = 154 .753 STANDARD . EFROR....QF___THE_._RE_GRE_S.SJ.ON...= l.i.74i94.._ ESTIMATE CF V A RI A N C E-C CV A P IANCE MATRIX OF ESTIMATED COEFFICIENTS C.112E+CC - C . l l Z P + C C -0.112E+00 0.229E+0 0 Ln O VALJAi3 .Li .S_._. J . . , , . A 7 4 A 6 5 TYPE 8 M - l to C - 2 c Z C N E D A' F A N O F D E P E N D E N T VARI A B . L E . _ I j S 2. 1454 , I N C E P E N C E N T E S T I M A T E C S T A N P A R C , T - V A P I A E L E C O E F F I C I E N T E R R O R S T A T I S T I C _C 2.52705193 0. 0Q7220S6 \ , _25,_9 92658.90 Z C N E T 0 . 2 2 2 7 7 1 7 Q 0 . 1 3 3 3 8 6 0 8 1 . 6 7 C 1 2 6 9 1 F - S O U A F E D = 0 . 0 6 5 3 D L ?_ P J \ -K.A T S CN' . S T All S T . I . C . . ( . A C J . JFQ R 1 j G A P S ) = 0 . 4 2 1 0 i W E E R C F O B S E R V A T I O N S = 3 2 S U M C F S C U A R E C R E S I C U A L S = 4 „ 2 5 3 3 7 S T A K - C A F C E P R C R C F T h E R F G P E S S I C N = 0 . 3 7 6 5 2 5 E S T I M A T E C F V A R I A N C E - C G V A R I A N C C . M A T R I X C F E S T I M A T E C C O E F F I C I E N T S C . 9 4 5 E - 0 2 - C . 9 4 5 E - 0 2 - C . 9 4 5 E - G 2 C . 1 7 E F - C 1 A 7 4 A 6 5 TYPE 9 M-l to CRM-2 r Z C N E D M E A N OF D E P E N D E N T V A R I A B L E I S 2 . £ 3 5 1 N O f ' F E P . C F O B S E R V A T I O N S = 1 6 3 S U M C F S Q U A R E D P F S I C U A L S = 8 4 . 5 1 0 2 S T A A D A F O E R R C R C F T H E R E G R E S S I C N = 0 . 6 6 4 5 21 R - S C U A R E D = 0 . 6 2 5 8 D L P P I N - W A T S C K S T A T I S T I C ( A C J . FOR 0__(__P_.1_= SUULS&. E S T I M A T E O F V A R I A N C E - C O V A R I A N C E M A T R I X C F E S T I M A T E D C O E F F I C I E N T S u . 5 2 i r - C 2 - 0 . 5 2 1 E - 0 2 - 0 . 5 2 1 F - C 2 C . 1 C 2 E - G 1 I l\ D E P E N D E N T E S T I M A T E D S T A N P A R C Jz M E A N O F  V A R I A B L E C O E F F I C I E N T E R R O R S T A T I S T I C V A R I A B L E C 2 . 6 2 4 7 8 9 2 4 0 . 0 7 2 1 5 , 5 6 „ 3 6 . 3 5 5 9 4 1 8 0 l . _ G _ 0 _ 0 0 0 0 0 0 Z O N E D 1 . 7 5 9 2 4 5 0 2 0 . 1 0 1 2 7 5 2 7 1 7 . 7 6 6 8 6 1 0 0 0 . 5 0 8 1 9 6 7 1 N3 A74A6 5 OVERALL ZONING EFFECT C : ZCNEC _J*EAN.0F LEPENOENT VARIABLE IS 2. 4155 ___ INDEPENDENT ES T 1 MAT EC , STANDARC , T-VARIABLE COEFFICIENT ERROR STATISTIC C 2 . 7 50486 37 0..08706 135 31. 59249880 ZONED 1.31789398 0.12254554 10.75432010 P-SOUARED = 0.1799 DLR6 I N-V\ ATSCN ST AT IS T I C. (..A C J . FOR C ..CAPS.) .= 0. .6.5 31 NUMBER CF OBSERVATIONS = 529 SUN CF SCUAPEC R F S I D I A L S = 1C46.56 .... ST A Mr. A.R D...E F R OJi.._0£....TF_L..RtGR.ES S_I C N._f 1 . 40 9 2 1_ ESTIMATE OF VARIANCE-COVARIANCE MATRIX CF ESTIMATED COEFFICIENTS G.75 8F-G2 -0.75bE-02 -C.758F-C2 C.15CE-C1 

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