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The role of the municipal, provincial and federal governments in the acquisition, development and disposition… Matthieu, Germain Jean 1974

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THE ROLE OF THE MUNICIPAL, PROVINCIAL AND FEDERAL GOVERNMENTS IN THE ACQUISITION, DEVELOPMENT AND DISPOSITION OF RESIDENTIAL SERVICED LOTS IN THE GREATER VANCOUVER REGIONAL DISTRICT by GERMAIN JEAN MATTHIEU B.CCM., LAVAL UNIVERSITY, 1969 A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE in the Department of Commerce and Business Administrat ion Ue accept th i s thes is as conforming to the required standard THE UNIVERSITY OF APRIL, BRITISH COLUMBIA 197«* In presenting this thesis in partial fulfilment of the requirements for an advanced degree at the University of British Columbia, I agree that the Library shall make i t freely available for reference and study. I further agree that permission for extensive copying of this thesis for scholarly purposes may be granted by the Head of my Department or by his representatives. It is understood that copying or publication of this thesis for financial gain shall not be allowed without my written permission. Germain Jean Matthieu Department of Cammerce and Business Administration The University of British Columbia Vancouver 8, Canada Date i i ABSTRACT This study i s an attempt to determine i f a shortage of supply of serv iced bu i ld ing l o t s , for development of s ing le family due l l ings in the Lower Mainland of B. C , r e l a t i v e to the demand for such l o t s , ex i s ts and to determine the ro le of the publ ic sector in the assembly, development and d i s p o s i t i o n of serv iced lo ts in the Metro-po l i tan Vancouver a rea . To determine i f a shortage of supply of serv iced bu i ld ing lo t s e x i s t s , a t h e o r e t i c a l market analys is of supply and demand pro -vides a framework for the examination of empi r i ca l f ind ings re la ted to the supply and demand for housing uni ts in Metropol i tan Vancouver. Population f igures in Metropol i tan Vancouver are used to e s t a b l i s h a'' l e v e l of demand. Supply i s determined according to ex i s t ing stock f igures based on census data and due l l ing unit s t a r t s for a l l c a t e -gories of due l l ing uni ts in Metropol i tan Vancouver betueen 1967 and 1973 as compiled by Centra l Mortgage and Housing Corporat ion . Given the projected population grouth and housing formation and the t o t a l production of due l l ing u n i t s , the ana lys is demonstrates that the supply i s f a l l i n g behind the demand. To determine i f the publ ic sector could play a ro le in the increase of supply of r e s i d e n t i a l bu i ld ing l o t s , re levant fac to rs reducing the supply production process are i d e n t i f i e d . A review of municipal powers i s undertaken to determine i f p a r t i c i p a t i o n in the development process i s p o s s i b l e . Three munic i -p a l i t i e s are se lected to i d e n t i f y the i r p o l i c i e s with regard to the i i i development of the i r land holdings far r e s i d e n t i a l purposes. A categorized inventory of the i r land holdings i s made to determine the amount of undeveloped lands under the i r cont ro l in r e l a t i o n to the amount of undeveloped lands in the Metropol i tan Vancouver. It i s possib le to conclude that those m u n i c i p a l i t i e s r e t a i n most of the i r holdings for future planning considerat ion and dispose of a marginal part for p r o f i t purposes on ly . I f such p o l i c i e s do not change, the D i s t r i c t M u n i c i p a l i t i e s of Burnaby and North Vancouver w i l l a f f e c t the housing s i t u a t i o n as they own 63% and E>k% of a l l undeveloped land su i tab le for r e s i d e n t i a l development within t h e i r boundaries. A review of the powers and the p o l i c i e s of the p r o v i n c i a l and federa l governments in the production process of r e s i d e n t i a l bu i ld ing lo t s ind icates that the p r o v i n c i a l government does not want to com-pete with the pr ivate sector in such areas . The province i s more interested in the production of mul t ip le dwell ing uni ts for the peoole who'are not reached by the pr ivate sec to r . However, the federa l government provides f i n a n c i a l assistance to any m u n i c i p a l i t i e s which want to develop i t s land holdings for r e s i d e n t i a l purposes. Such assistance has not been used so far in Metropol i tan Vancouver due to the lack of p r o v i n c i a l co -o rd inat ion and also the s t r i c t requirements of such a s s i s t a n c e . Such ana lys is of the three l e v e l s of government demonstrates that the i r d i f f e r e n t p o l i c i e s in regard to the production process of r e s i d e n t i a l serv iced lo ts have not contr ibuted to reducing the ex is t ing shortage of r e s i d e n t i a l bu i ld ing , l o t s in Metropol i tan Vancouver. i v TABLE OF CONTENTS Chapter Page I INTRODUCTION 1 The Problem 1 The S ign i f i cance of the Problem 1 Hypotheses . 1 L imi tat ions of the Study 2 Concepts and d e f i n i t i o n of terms 3 Procedure in development of thes is 3 II SUPPLY AND DEMAND FOR HOUSING - THEORETICAL ANALYSIS.. 6 Summary of Supply and Demand 9 E f fec t of Surplus Demand on Land P r i c i n g . . . . 11 E f f e c t of Surplus Demand on the.Supply of Housing Units to the Market 15 III SUPPLY AND DEMAND FOR HOUSING IN METROPOLITAN VANCOUVER 19 Demand for Housing as a Function of Income.. 20 Demand for Housing as a Function of Pop-u la t ion 2k The Supply of Housing in Metropol i tan Vancouver 27 IV THE SUPPLY OF SERVICED RESIDENTIAL DUELLING SITES-AN EXAMINATION OF THE FACTORS DETERMINING QUANTI-TATIVE EXPECTATIONS OF INCREMENTS TO EXISTING HOUSING STOCK THROUGH THE DEVELOPMENT OF SERVICED RESIDENTIAL DUELLING SITES 37 S t a t i c Analys is of the Res ident ia l Duel l ing Unit Supply Process 37 Dynamic Analys is of the R e s i d e n t i a l Unit Supply Process kk V THE MUNICIPAL ROLE IN THE ASSEMBLY, DEVELOPMENT AND DISPOSITION OF LAND FOR RESIDENTIAL PURPOSES 51 Legal Powers 51 Munic ipal P o l i c i e s (se lected m u n i c i p a l i t i e s ) 53 A. Surrey 54 B. Burnaby 58 C. North Vancouver D i s t r i c t 62 Implications. 67 V Chapter Page UI THE PROVINCIAL AND FEDERAL ROLE IN THE ACQUISITION, DEVELOPMENT AND DISPOSITION OF LAND FOR RESIDENTIAL PURPOSES 74 The P r o v i n c i a l Role 74 A. Legal powers 75 B. P o l i c i e s 77 C. Establishment of a P r o v i n c i a l Land Inventory 80 D. Impl icat ions 81 The Federal Role 85 A. Background 85 B. Evolut ion of Federal P a r t i c i p a t i o n . 87 C. Analys is of the Federal Land Holdings 89 D. Inp l i ca t ions 91 VII SUMMARY AND CONCLUSIONS 94 Summary of the Thesis 94 L imi tat ions and Weaknesses 96 Po l i cy Recommendations.. 98 Impl icat ions for Further Study 99 BIBLIOGRAPHY 101 APPENDIX A R e s i d e n t i a l Lots so ld by North Vancouver D i s t r i c t 104 B The Department of Housing Act E f f e c t s 106 C Canadian Housing Po l icy - A Chronology 108 D Federal Land Holdings in B.C I l l E Undeveloped Lands Ava i lab le for R e s i d e n t i a l Uses 113 F Dwell ing S tar ts i n Metropol i tan Vancouver 1966-1973 115 v i LIST OF TABLES Table Page 1 Ex i s t ing due l l ing stack pr ice r i s e s through time 12 2 E f fec t of leverage on r e s i d e n t i a l due l l ing s i t e pr ices 13 3 E f fec t of leverage on rau land pr ices 14 4 Negative leverage 15 5 The pr ice of homes in Metropol i tan Vancouver r e l a t i v e to average incomes of i n d u s t r i a l workers in B .C . 1963-1973 21 6 Household formation and due l l ing unit s t a r t s in Metropol i tan Vancouver 1961-1976 27 7 Res ident ia l Bu i ld ing a c t i v i t y - due l l ing s t a r t s in Metropol i tan Vancouver 1967-1973 28 8 Res ident ia l bu i ld ing a c t i v i t y - s ing le family due l l ing s t a r t s in Metropol i tan Vancouver 1967-1973 29 9 Res ident ia l bu i ld ing a c t i v i t y - mul t ip le dwell ing s t a r t s in Metropol i tan Vancouver 1967-1973 30 10 Cost of construct ion of s ing le family dwell ings in Metropol i tan Vancouver 1960-1973 33 11 Average cost of a t y p i c a l serv iced lo t in GVRD 1964-1973 34 12 The cost of housing in GVRD in terms of bu i ld ing costs and serv iced land pr i ces 1964-1973 35 u i i LIST OF FIGURES Figure Page 1 Interact ion of supply and demand for housing 10 2 F e r t i l i t y rates 24 3 Diagram of s t a t i c analys is of r e s i d e n t i a l due l l ing unit supply process 38 4 P i c t o r i a l representat ion of dynamic ana lys is of r e s i d e n t i a l due l l ing unit supply process 45 ACKNOWLEDGMENTS I would l i k e to express my appreciat ion to Dr. S . U. Hamilton for h is suggestions and counsel throughout the prepar -at ion of th i s t h e s i s . I would also l i k e to thank Mrs. G. Rol lo for her ass istance in the cor rec t ion of t h i s t h e s i s . F i n a l l y , I am g ra te fu l to my wife for her understanding during the preparation of t h i s t h e s i s . CHAPTER I INTRODUCTION The Problem This study i s an attempt to determine i f a shortage of supply of serv iced bu i ld ing l o t s , f o r development of s ing le family due l l ings in the louer mainland of B. C , r e l a t i v e to the demand for such l o t s ex is ts and to determine the ro le of the pub l ic sector (munic ipal , p r o v i n c i a l and federa l governments) in the assembly, development, and d i s p o s i t i o n of such serv iced lo ts in the louer mainland of B r i t i s h Columbia. The S ign i f i cance of the Problem The s i g n i f i c a n c e of t h i s problem i s that as less land i s made ava i lab le for housing const ruc t ion , r e l a t i v e to the increas ing demand for housing, the resu l t u i l l be a reduct ion of the number of due l l ing uni ts added to the e x i s t i n g stock or an increase in dens i ty . Since i t i s the standing stock of housing that determines the pr ice leve l s of housing in the market, increments to the ex i s t ing stock uhich are i n -adequate, u i l l r esu l t in an increase in the pr ice l e v e l s of standing s tock . The increased market pr ice leve l s for housing u i l l cause an increase in the pr ice of raw and serv iced land, as vendors of raw or serv iced land are in a pos i t i on uhere there i s a shortage of serv iced land r e l a t i v e to the demand for serv iced land and purchasers of th i s land can a f fo rd to pay more money for t h i s land as the increase in 1 2 the market pr ice of housing u i l l permit an increase in the pr ice of serv iced land . In e f f e c t the shortage of supply of serv iced land places increas ing pressure on the pr ice of land for immediate develop-ment. A further e f f e c t may be that the bui lder of a home on the more expensive serv iced land may bu i ld the most p r o f i t a b l e and usual ly the most expensive due l l ing unit poss ib le to take f u l l advantage of the highest market pr ice as determined by the market of e x i s t i n g stock, maximizing his b u i l d e r ' s p r o f i t . Thus the r e l a t i v e supply of the louer pr iced homes may be reduced u n t i l the supply of expensive homes s a t i s f i e s the demand. Hypotheses The hypotheses that u i l l be inves t iga ted , focus on the problem of a shortage of supply of r e s i d e n t i a l bu i ld ing lo t s in the Greater Vancouver region u i th reference to the ro le some m u n i c i p a l i t i e s played by re leas ing some of the i r holdings to increase the supply . A d d i t i o n -a l l y , reference i s made to the ro le of the p r o v i n c i a l and federa l government in cont r ibut ing touards the increase of such a supply . The f i r s t hypothesis to be analysed asks the quest ion: Is there a shortage of r e s i d e n t i a l bu i ld ing lo t s r e l a t i v e to the demand for r e s i d e n t i a l bu i ld ing lo t s in the Greater Vancouver area? The second hypothesis proposes that the pub l ic sec to r , u i th i t s pouers, land holdings and p o l i c i e s re la ted to the development of i t s hold ings, can play a d i rec t ro le in the supply of r e s i d e n t i a l bu i ld ing l o t s in the market. However, the d i f f e r e n t p o l i c i e s adopted by the three l e v e l s of government i s one of the causes of the shortage of bu i ld ing l o t s . 3 Limitat ions of the Study This thes is does not deal with a l l the powers ava i lab le to the publ ic sector for accommodating the ever increas ing urban growth such as the regulat ion and the taxat ion of land . It i s recognized that these are important const ra ints on the thes is and the research conducted here w i l l r e f l e c t these l i m i t a t i o n s . Concepts and d e f i n i t i o n of terms Housing p o l i c i e s : t h i s term re fe rs to l e g i s l a t i o n or reso lu t ion passed or adopted by governmental bodies in the f i e l d of housing. Publ ic land ho ld ings : t h i s term w i l l apply to land held by the munic ipa l , p r o v i n c i a l and federa l governments. It w i l l exclude a l l land held by Crown Corporations or other government agencies. Development process: t h i s term re fe rs to the assembly, sub-d i v i s i o n s e r v i c i n g and d i s p o s i t i o n of land by a pub l i c or pr ivate developer. Procedure in Development of Thesis Chapter II introduces a t h e o r e t i c a l market analys is of supply and demand. This provides a framework for the examination of empi r i ca l f indings re la ted to the supply and demand far housing uni ts in Metro-po l i tan Vancouver. In Chapter III the demand and supply for dwell ing uni ts in Metropol i tan Vancouver are analyzed separately in terms of demand and supply of s ing le family dwel l ings . Papulation and income f igures are used to e s t a b l i s h a l e v e l of demand. Supply i s determined according to ex i s t ing stack f igures based on census data and dwell ing unit s ta r t s for a l l categor ies of due l l ing uni ts in Metropol i tan Vancouver betueen 1967 and 1973 as compiled by Centra l Mortgage and Housing Corporat ion. S ingle family due l l i ng uni t s t a r t s are assumed i n d i c a -t i ve of the majority of the supply of serv iced r e s i d e n t i a l bu i ld ing l o t s . This mater ia l i s re la ted to the h i s t o r i c a l trend of average house pr ices in Metropol i tan Vancouver betueen 1967 and 1973 to determine the present market condit ions of supply and demand. Chapter IV re la tes the supply of housing to a s t a t i c and dynamic ana lys i s in order to determine the relevant fac to rs that may be a t t r ibuted to reducing the supply production process . Three c r i t i -c a l areas are i d e n t i f i e d in the dynamic process of supply . 1) The assembly of rau land 2) The municipal approval process 3) The construct ion process u i t h regard to the se rv i c ing of due l l ing s i t e s . Chapter V makes an ana lys is of the municipal ro le in the assembly, s u b d i v i s i o n , se rv i c ing and d i s p o s i t i o n of land for r e s i -d e n t i a l purposes in the Greater Vancouver area . F i r s t l y , a rev ieu of municipal pauers i s undertaken to determine i f such p a r t i c i p a t i o n in the development process i s p a s s i b l e . Secondly, three m u n i c i p a l i t i e s are se lected to determine the i r p o l i c i e s u i th regard to the development of the i r land holdings for r e s i d e n t i a l purposes. T h i r d l y , an inventory of the i r land holdings i s made to determine the amount of undeveloped lands uhich i s under municipal ounership. F i n a l l y , i t uas poss ib le to conclude that m u n i c i p a l i t i e s r e t a i n most of the i r land holdings for planning considerat ions and dispose of part of i t far p r o f i t purposes on ly . Chapter VI re la tes to the p r o v i n c i a l and federa l ro le in the 5 production of serv ices lo t s for r e s i d e n t i a l purposes. In the f i r s t par t , the powers and the p o l i c i e s of the p r o v i n c i a l government are reviewed and an analys is of the Department of Housing i s ca r r ied out . In the second par t , the f e d e r a l government involvement in housing matters i s b r i e f l y reviewed and an in -depth ana lys is of sect ion k0-k2 of the Nat ional Housing Act i s ca r r ied out . Such sect ions are the main involvement of the senior government in the assembly, se rv i c ing and d i s p o s i t i o n of land for r e s i d e n t i a l purposes. Chapter UII summarizes general conclusions and ind icates top ics for fur ther study. CHAPTER II ^SUPPLY AND DEMAND FOR HOUSING THEORETICAL ANALYSIS Ana lys is of the supply of r e s i d e n t i a l d u e l l i n g un i ts must begin u i th an ana lys is of the supply and demand for the housing stock as a uhole . In c o n t r a d i s t i n c t i o n to many other consumer goods, con -sumers of housing can choose betueen buying e x i s t i n g d u e l l i n g un i ts uhich are up for r e s a l e , rent ing d u e l l i n g u n i t s , or buying a neu u n i t . At any given t ime, the uhole of the e x i s t i n g housing stock i s l a t e n t l y up for sa le or rent as u e l l as the t o t a l i t y of neu add i t ions to the housing s tock . If p r i ce l e v e l s d i f f e r betueen the tuo c a t e -gor ies of housing, s u f f i c i e n t holders of e x i s t i n g stock u i l l be induced into the market to buy neu homes and s e l l t h e i r o ld homes so -as to equal ize p r i c e s . If the p r i ce d i f fe rence i s in the other d i r e c t i o n a s u f f i c i e n t number of neu home buyers u i l l be induced to pass up neu homes in favour of o lder ones, u n t i l , once again the pr ice l e v e l s are approaching e q u a l i z a t i o n . At any one t ime, the e x i s t i n g housing stack makes up the greatest bulk of the housing market. Increments to the housing stock normally range from tuo to four per cent per annum. Therefore , p o t e n t i a l s e l l e r s of e x i s t i n g housing make up n inety s i x to ninety eight per cent of the p o t e n t i a l market at any one t ime. Neu housing *It may be argued that only a smal l percentage of the e x i s t i n g stock may be up for sale at any one given t ime. This does not take into account that i f there uere major p r i ce d i f f e r e n c e s , more e x i s t i n g housing uould come onto the market. 6 7 makes up only tuo to Four per cent . The numbrjr of ac tua l and p o t e n t i a l s e l l e r s i s cons iderab le . In most cunes, i n d i v i d u a l f a m i l i e s own e x i s t i n g housing. Each family s e l l s i t s oun un i t at the p r i ce i t can obtain without reference to any p r i ce f i x i n g agreements betueen s e l l e r s . Edmund Pr ice po ints out that there are approximately 650 bu i lders i n the Greater Vancouver area.' ' ' Each b u i l d e r acts as an independent agent i n s e l l i n g h i s product . Richard Moore in te rv ieued s i x t y three developers supply ing e i t h e r r e s i d e n t i a l b u i l d i n g s i t e s 2 and/or r e s i d e n t i a l d u e l l i n g s to the reg iona l market. In terms of * the economists' d e f i n i t i o n of pure competit ion , i t appears that the market f o r . t h e housing s tock , as a uhole , approaches pure competit ion i f r e s i d e n t i a l d u e l l i n g s can be considered as l i v i n g space purely ** and s imply . The housing stock and the i n t e r a c t i o n s of supply and demand for the housing stock can be diagrammed roughly as ind ica ted below. Occupants of + Met immigrat ion/ ^ Number of e x i s t i n g stock emigrat ion p a r t i c i p a n t s who + can f inance pur -net household chase of r e n t a l formation or r e s i d e n t i a l [ dwel l ing un i t s = index E x i s t i n g housing stock Net add i t ions to housing number 100% + stock (2% to k%) I f the index number i s 1 - r e s i d e n t i a l un i t p r i ces w i l l s t a b i l i z e (assu-ming no change in 'the propensity to consume, of the p a r t i c i p a n t s ) . If * "Pure competition i s def ined by the economist as a t e c h n i c a l term: 'per fect compet i t ion ' e x i s t s only i n the case where no farmer, bus iness -man or laborer i s a b ig enough part of the t o t a l market to have any personal in f luence on market p r i c e ."3 * * The point should be made, however, that dwel l ing u n i t s are not normally considered as purely and simply l i v i n g space. Each dwel l ing un i t has a c e r t a i n locn t ion u i t h l i n k s to or proximity to places of em-ployment, shopping, schoo ls , rec reat ion f a c i l i t i e s and des i rab le neighborhoods. Such s p e c i f i c l oca t ions d i f f e r e n t i a t e to some degree the r e s i d e n t i a l dwel l ing un i t market. 8 the index number i s g r e a t e r than 1 p r i c e s r i s e u n t i l e i t h e r i ) net immigration/ e m i g r a t i o n balance changes, i i ) r a t e of net haushold formation d e c l i n e s - u s u a l l y through doubling up of households, i i i ) number of p a r t i c i p a n t s able to f i n a n c e entry i n t o the market d e c l i n e s e i t h e r through the e s c a l a t i o n of the r e n t a l p r i c e index or the e s c a l a t i o n of the p r i c e s of homes (neu and e x i s t i n g ) , i v ) s u f f i c i e n t number of new housing u n i t s ( r e n t a l or s a l e ) enter market through i n c r e a s e d pace of c o n s t r u c t i o n , v) any combination of the above e i t h e r decreases demand or i n c r e a s e s supply. I f the index number i s l e s s than 1, then p r i c e l e v e l s u i l l f a l l u n t i l such time as some combination of the above o u t l i n e d f a c t o r s e i t h e r i ncreases demand or reduces supply. F i l t e r i n g occurs throughout the housing s t o c k . Owners o f e x i s t i n g housing s e l l t h e i r homes and buy neu or used housing or move tD r e n t a l accomodation. Occupiers of r e n t a l accomodation buy neu or e x i s t i n g homes. F i l t e r i n g p a t t e r n s normally, although not a l u a y s , f o l l o w the r e l a t i v e a b i l i t y of the i n d i v i d u a l p a r t i c i p a n t s to fi n a n c e the a c q u i s i t i o n of a d u e l l i n g u n i t . As t o t a l net disposable income a l l o c a t e d to housing of the i n d i v i d u a l p a r t i c i p a n t ( s ) i n c r e a s e s r e l a t i v e to other p a r t i c i p a n t s ) the p a r t i c i p a n t u i l l normally upgrade h i s housing accomodation. I t should be noted houever t h a t as i n d i v -i d u a l incomes i n c r e a s e a s m a l l e r p r o p o r t i o n of income i s spent on housing. The income e l a s t i c i t y f o r demand has been measured as high • as 1.5 to 2 by Reid (1958)^ however there i s more c o n c l u s i v e evidence to suggest t h a t income e l a s t i c i t y i s c l o s e r to a range of .5 to 1. Oksanen (1966) has found that housing stock e l a s t i c i t i e s f o r income 5 range from .3 to .5 and flow e l a s t i c i t i e s are below 1. Uhler (1968) al s o supports t h i s a n a l y s i s a3 he has found income e l a s t i c i t i e s range •Such st u d i e s are based on normal not current incomes. 9 tatueen .34 and . 5 7 . ^ Lee (1964) supports these f ind ings concluding that income e l a s t i c i t y i s less than unity hence the proport ion of 7 i_,come spent 'on housing f a l l s as income r i s e s . The w i l l ingness and/or a b i l i t y of p a r t i c i p a n t s to " f i l t e r " i j or down through the accomodation spectrum i s o f ten in f luenced by asp i ra t ions and needs, such as , s i ze of family and need for Ez=ce; family and neighborhood assoc ia t ions and t i e s ; psycho log ica l i -portance of status to the i n d i v i d u a l ; expectat ions as to future income l e v e l s ; pursui t of l i f e s t y l e s which lead to a l l o c a t i n g funds g iz other consumer goods and a c t i v i t i e s . One important determinant of the i n d i v i d u a l ' s w i l l i ngness to p a r t i c i p a t e in t h i s f i l t e r i n g process i s h is expectat ions as to future housing p r i c e s . If the par t ic ipant i s convinced that the p r i ce of housing w i l l continue to esca late , he w i l l l i k e l y use any means at h is d i s p o s a l to purchase a r e s i d e n t i a l dwell ing uni t "now" rather than wa i t . The net e f f e c t of th i s phenomenon i s the t rans fe r of future demand to the present . 5^-mary of Supply and Demand The overview of the supply and demand fo r housing stock given in the previous s e c t i o n s , while lack ing in same d e t a i l s and in refinement, does present a working model of the f a c t o r s that are i n -strumental to a n a l y s i s . These fac to rs are depicted in Figure 1 . In Figure 1 , current supply i s depicted by S-^Sg and current D=i-and by D j ^ * At one point in t ime, the p r e v a i l i n g p r i ce would be F. . If there i s a smal l increase in the supply to S^S^ that i s qui te s~2l l r e l a t i v e to the number of e x i s t i n g uni ts in s tock , and no change i - demand, p r i ces would f a l l to P^, a smal l decrease. I f , on the z'.her hand, demand increased to D ? D p while supply increases to S 9 S 9 , Figure 1 ID In teract ions of Supply and Demand for Housing Source: Hamilton, S.LJ . , Pub l i c Land Banking - Real or I l l u s i o n a r y  Benef i t s? Report for the Urban Development Ins t i tu te of Ontario , 1974, p. 10. 11 prices u i l l r i s e to P^- J As there are p h y s i c a l l i m i t s to increases in supply as u e l l =.= l i m i t s to the number of r e s i d e n t i a l due l l i ng s i t e s the planning process u i l l approve, the increases in supply for Canadian urban centres has been less than the increases in demand. If t h i s , as L T . Hamilton points o u t , ^ has been the case, i t uould account for a ir;=jor port ion of the p r i ce r i s e s in Canadian housing in the past Decade. "The problems of supply of housing and b u i l d i n g l o t s , as ser ious as they may be, are not as c r i t i c a l as the changes in demand. Grouing popu lat ion , r a p i d l y r i s i n g incomes, demand for bet ter housing, and increased con -cent ra t ion in a feu urban areas are c reat ing i n s a t i a b l e demand for housing and l a n d . Over the past ten years , incomes and disposable incomes have r i s e n more r a p i d l y than housing expenditures, and the concentrat ion of populat ion into urban areas has cont inued. In a d d i t i o n , important neu i n c e n t i v e s , in the form of s p e c i a l income tax s tatus for p r i n c i p a l res idences , has bo ls te red the already extensive demands for housing, e s p e c i a l l y ouner-s h i p . S i r n i l a r i l y , improved mortgage terms and p r o v i n c i a l f inanc ing for second mortgages have a l l contr ibuted to the increased demands. " H Ef fect of Surplus Demand on Land P r i c i n g Given that an excess of demand v i s - a - v i s supply for the housing stock as a whole u i l l r a i s e p r i ce l e v e l s for the neu housing s tock , naming on stream, dramatic changes u i l l occur in the p r i ces paid f o r serv iced d u e l l i n g s i t e s through the act ion of leverage . Even TTcre dramatic p r i ce changes u i l l take place for rau land due to the ef fect of compounded leverage . Table 1 sets out some assumptions about the average p r i ce levels of e x i s t i n g housing as these p r i ce changes occur through t ime. The bu i lder u i l l take h is p r i c i n g clue from the average p r i ce zf comparable houses in comparable locat ions to the one he i s going ia b u i l d . I n s t i n c t i v e l y , he knous that he cannot in f luence the 12 Table 1. E x i s t i n g Due l l ing Stock Pr ice Rises Through Time. Percentage Percentage Percentage Change Change change Year 1 Year 2 Year 3 Year 1 to 2 Year 2 to 3 Year 1 to 3 Average Pr ice Lsvel of Ex is t ing Comparable rouses in Comparable $ $ $ Locations 26,000 30,000 38,000 + 15% + 27% + 46% o v e r a l l p r i ce of housing for the aggregate increment to housing stock in any one year i s only tuo to four per cent of the t o t a l e x i s t i n g stock. He knous that i f h i s p r i ce l e v e l i s too h igh , the buyer u i l l prefer e x i s t i n g housing and h is uni t u i l l not s e l l . He a lso knous that i f h is p r i ce l e v e l i s too l o u , a c r a f t y speculator u i l l s e l l e x i s t i n g housing to buy the b u i l d e r ' s product at an immediate ' p r o f i t ' to the s p e c u l a t o r . The b u i l d e r a lso i n s t i n c t i v e l y knous that buyers u i l l , on average, pay a premium for neu housing due to such in f luence as improved des ign , louer maintenance and r e p a i r c o s t s , bet ter f i n -ancing terms and the increased s tatus of ouning a neu home. The e f f e c t of the b u i l d e r ' s p r i c i n g of h i s house for sa le rn the maximum pr ices that he u i l l pay for se rv i ced r e s i d e n t i a l c u s l l i n g s i t e s i s demonstrated in Table 2. C l e a r l y , i f he rece ives rare far h i s house from year to year , he can a f f o r d to pay more for the l o t . The ac tua l p r i ce he pays u i l l be the end pr i ce far h is "nouse, less the costs of const ruct ion and p r o f i t . If house p r i ces r i se more on a percentage bas is than const ruct ion costs r i s e on a 13 percentage b a s i s , then p o s i t i v e leverage w i l l r e s u l t . For ins tance , as Tsble 2 demonstrates, i f house p r i ces r i s e by 27% while bu i ld ing costs go up by 20%, l o t p r i ces w i l l esca late by 41%. Negative leverage i s a lso a d i s t i n c t p o s s i b i l i t y . Assume that house p r i ces remained constant at $30,000 while const ruct ion costs rose by 20%, from $20,ODD to $23,000, l o t p r i ces would drop from $9,200 to $7,000 - a 23% decrease. Table 2. E f f e c t of Leverage on R e s i d e n t i a l Dwell ing S i t e P r i c e s . Percentage Percentage Percentage change change change Year 1 Year 2 Year 3 Year 1 to 2 Year 2 to 3 Year 1 to 3 Pr ice of home b u i l t by bui lder $30,000 $34,500 $43,800 + 15% + 27% + 46% Bui ld ing costs & P r o f i t 20,800 23,000 27,600 + 10% + 20% + 33% Maximum Resident-i a l D u e l l -ing S i te Pr ice 9,200 11,500 16,200 + 25% + 41% + 76% The developer, pub l i c or p r i v a t e , i s part of the p r i c i n g process. The bu i lder takes h is p r i c i n g clue from the p r i ce l e v e l for ex is t ing comparable hous ing . The developer takes h i s p r i c i n g c lue from the maximum r e s i d e n t i a l dwel l ing s i t e p r i ce l e v e l . The p r i ce that the developer pays for raw land i s leveraged in the same way as the p r i ce that bu i lde rs pay for se rv iced dwel l ing s i t e s . If the p r i ce paid for a serv iced s i t e - i n c r e a s e s more on a 14 percentage bas is than the s e r v i c i n g costs the e f f e c t u i l l be upward leveraging on the pr ice paid for raw l a n d . If the s e r v i c i n g costs escalate more rap id l y than the percentage p r i ce increase for serviced s i t e s , the e f f e c t w i l l be downward leveraging on the p r i ces paid for raw l a n d . ' Table 3. E f f e c t of Leverage cm Raw Land P r i c e s . Percentage Percentage Percentage change change change Year 1 Year 2 Year 3 Year 1 to 2 Year 2 to 3 year 1 to 3 Pr ice paid by bui lder for serv iced bui ld ing s i t e $ 9,200 11,500 16,200 + 25% + 41% . + 76% Serv ic ing costs + municipal imposts + p r o f i t s 5,200 6,300 9,100 + 21% + 45% + 75% Maximum raw land pr ice per s i t e 4,000 5,200 7,100 + 30% + 37% + 78% Note that Table 3 also demonstrates negative leverage in the t rans i t i on in raw land p r i ces from year 2 to year 3 . S e r v i c i n g costs in the hypothet ica l example have r i s e n from $6,300 in year 2 to $9,100 in year 3 . In the same year, the p r i ce paid by the bu i lder for serv iced bu i ld ing s i t e s increased by a l esse r percentage of 41% from $11,500 to $16,200. The e f f e c t on the maximum raw land p r i ce per s i te i s negative leverage . The p r i ce paid for a raw lo t increased only 37% from $5,200 to $7,100 while the pr ice paid for a se rv i ced l o t increased by 41%. Consider the imp l i ca t ions for the p r i ce paid for raid l o t s i f the pr ice paid by the bu i lde r had only r i s e n by a much lower percentage. Table 4 points out negative leverage . Table 4. Negative Leverage. Year 2 Year 3 Percentage change Pr ice paid by bu i lder for serv iced bu i ld ing s i t e Serv ic ing costs + municipal imposts + p r o f i t s Maximum raw land pr ice per s i t e 111,500 13,225 6,3DTJ 5,200 9,100 4,125 + 15% + 45% - 21% Ef fec t of Surplus Demand on the Supply of Housing Units to the Market If the pr ice of e x i s t i n g housing stock i s c l imbing at an unusually rap id r a t e , the bu i lder u i l l develop 'expec ta t ions ' as to the p r i ce that he may be able to obta in f o r h i s product i f he w a i t s . I f the expected increment in p r i ce i s considerably more than h i s holding costs for the f i n i s h e d house, he w i l l tend to withold supply from the market. He withholds supply in a very simple f a s h i o n . He simply p r i ces the house at what he expects future p r i ce l e v e l s to be, thereby t r a n s f e r r i n g present supply at present market p r i ces into future supply at' expected future market p r i c e s . The bu i lder w i l l not of ten withhold supply for any considerable per iod of t ime. F i r s t l y , the holding casts are too onerous. In e f f e c t , the bu i lder has to f inance the ent i re cast of the lo t plus -a cost of const ruct ion of the house at current i n t e r e s t r a t e s . ecandly, the bu i lder needs h is c a p i t a l to buy another lo t and s t a r t 1= const ruct ion process over aga in . Pr ice (1972) pointed out that 12 _ i lders are c h a r a c t e r i s t i c a l l y under c a p i t a l i z e d . T h i r d l y , -= bu i lder i s always concerned about temporary setbacks in the =rkst even though the general d i r e c t i o n i s upwards. The bu i lde r • J U S that temporary setbacks in p r i ce add to h is car ry ing casts in educing the p r o f i t l e v e l that he w i l l receive from the eventual sale r the house. Four th ly , the bu i lder i s usual ly aware that he w i l l irn a higher return on h is c a p i t a l invested i f he i s to s e l l the •use and re invest the proceeds in purchasing more serv iced l o t s , i r t i c u l a r i l y i f he perce ives the leverage ac t ion on the p r i c e of ; rv iced l o t s to be p o s i t i v e in d i r e c t i o n . In summary, i t i s not to be expected that the bu i lder w i l l thhold h is product from the market for long per iods of time but he .11 tend to withhold i f the short term pr ice l e v e l s are inc reas ing •=matically. On the other hand, the bu i lde r w i l l tend to acce le ra te i9 supplying of houses to the market i f he perceives short time akness in p r i c i n g for e x i s t i n g housing s tock . The bu i lder knows rat h is car ry ing costs are too heavy. The developer w i l l a lso tend to withhold supply of se rv iced ts from the market i f he perceives that the short term pr ice r i s e s r e x i s t i n g stock are e f f e c t i n g p o s i t i v e leverage on the p r i ce ructure for serv iced dwel l ing s i t e s . Normally, the developer w i l l t withhold l o t s from the market for long as he i s faced with the me problems as the b u i l d e r . Carry ing costs are too high and c a p i t a l required for the purchase of raw land . The developer w i l l only nd to withhold i f the short term pr ice r i s e s are dramatic . 17 The holder of raw land also has expectat ions as to the future pr ice l e v e l s for raid l a n d . These expectat ions u i l l be p a r t i c u l a r l y fue led uhen the e f f e c t of compounded leverage i s uork-ing p o s i t i v e l y both on the p r i ce of serv iced l o t s and also on rau land p r i c e s . The landholder in these periods 'knous' that h is land u i l l double in value next year . The landouner i s quite re luc tant to s e l l . Furthermore, the landholder i s in an exce l len t p o s i t i o n to uai t for fu r ther abnormal p r i ce i n c r e a s e s . The landouner knous that his car ry ing costs are very l o u , p a r t i c u l a r i l y in r e l a t i o n s h i p to the amounts that he expects to rece ive from fur ther u i n d f a l l ga ins . The landholder tends to u i thho ld rau land from the market in periods of abnormal p r i ce i n c r e a s e s . Such u i thho ld ing makes the assembly of rau land more d i f f i c u l t and more time consuming. Delays in land assembly reduce the quant i ty of rau land uhich may be feed into the supply process for eventual conversion into d u e l l i n g u n i t s . C o l l e c t i v e l y , landouners are uorking in t h e i r oun best i n t e r e s t by u i thholding land from the market. i s Footnotes Edmund V. P r i c e . "The House Bu i ld ing Industry in Vancouver", Unpublished Master 's of Business Adminis t rat ion t h e s i s , the Un ivers i t y of B r i t i s h Columbia, Vancouver, 1970. 2 Richard A. Moore. "Development P o t e n t i a l Model for the Vancouver Metropol i tan Area" , Unpublished Master 's of Business Administrat ion t h e s i s , The Un ivers i t y of B r i t i s h Columbia, Vancouver, 1972. "'P. A. Samuelson, Economics: An Introductory A n a l y s i s . Toronto :McGrau-Hi l l Company of Canada L t d . , 1966, p. 4 6 . l+ M. G. Re id , " C a p i t a l Formation in R e s i d e n t i a l Real E s t a t e " , Journal of P o l i t i c a l Economy 6 6 : 1 3 1 - 1 5 3 , 1958. 5 E. Oksanen, "Housing Demand in Canada, 1947-1962: Some Prel iminary Exper imentat ion" , Canadian Journal of Economics and P o l i t i c a l Sc ience , 3 2 : p . 3 1 2 , 1966. ^R. A. Uhler , "The Demand for Housing and Inverse P r o b a b i l i t y Approach", The Review of Economics and S t a t i s t i c s 5 0 : p . 1 3 3 , 1968. 7 T . H. Lee, "The Stock Demand E l a s t i c i t i e s of IMon Farm Housing", The Review of Economics and S t a t i s t i c s 46 : p . 8 8 , 1964. g Greater Vancouver Regional D i s t r i c t , "The Housing Issue" A Discussion Paper for the Greater Vancouver Regional D i s t r i c t , prepared by the GVRD Planning Department (Vancouver: The Greater Vancouver Regional D i s t r i c t , Feb. 13 , 1974) , p. 4 . g S . U. Hamilton, Pub l i c Land Banking - Real or I l l u s i o n a r y  Benef i t s , Report of the Urban Development Ins t i tu te of Ontar io , 1974, p. 9 . " ^ I b i d . , p. 9 . 1 1 I b i d . , p. 9 . 12 E. P r i c e , Op. c i t . CHAPTER III SUPPLY AMD DEMAND FOR HOUSING IN METROPOLITAN VANCOUVER Chapter II dealt u i th the supply and demand for housing in - E o r e t i c a l terms. Ana lys i s of the GVRD housing market v e r i f i e s the antention that the demand for r e s i d e n t i a l d u e l l i n g uni ts in t h i s =gion exceeds the supply. Demand for housing may be measured as a funct ion of populat ion nd income. "Growing populat ions , r a p i d l y r i s i n g incomes, demand or better housing and increased concentrat ions in a feu large urban raas are c reat ing i n s a t i a b l e demands for housing and land"''' In the reater Vancouver Regional D i s t r i c t the p r i ces of housing, p a r t i c -l a r l y s ing le family d u e l l i n g s , have been . inc reas ing r a p i d l y (Refer a column 5, Table 1). It may be argued that the p r i ce of housing 3 reaching a point where the t y p i c a l consumer of housing cannot urchase the same house he bought tuo years ago in today 's market, = the increases in costs of housing have exceeded the increase in i s gross income requi red to s a t i s f y the convent ional q u a l i f i c a t i o n s or mortgage f i n a n c i n g . The fo l lowing a n a l y s i s supports t h i s con -l u s i o n . However, t h i s may not be in te rp re ted as an i n d i c a t i o n hat the demand for housing should decrease. A b r i e f ana lys i s of the 33ic economics of the housing market and the funct ion of papulat ion routh as a cause of demand w i l l c l a r i f y the argument that there s a strong demand in the housing market in the G .V .R .D . 19 20 Demand For Housing as a Function of Income The i n d u s t r i a l workers of B r i t i s h Columbia composed 42% of the t o t a l labour force of 1,000,045 in July 1971. Table 5 ind ica tes the gross monthly income of the average i n d u s t r i a l worker between 1963 and 1973 and r e l a t e s these f igures to the average pr i ces of ex is t ing and new homes in the Greater Vancouver Regional D i s t r i c t and the d o l l a r increase in the p r i ces of these homes between 1963 and 1973. These f i gu res are r e l a t e d to the increase in the amount of the monthly payments requi red to amortize a mortgage at the average annual i n t e r e s t rate over a per iod Df twenty - f i ve years with a 5% and 25% down payment. Column 9 i n d i c a t e s that i f the average worker purchased the average pr i ced home in the GVRD in 1973 with a 25% down payment h is monthly p r i n c i p a l and i n t e r e s t payments would be $56.84 higher than they would have been for a home in 1972 and t h i s increase i s $21.84 greater than the increase in h is gross monthly income for the same p e r i o d . P r i o r to 1973 the monthly increases in gross income have been greater than the increase in monthly i n t e r e s t and p r i n c i p a l payments requ i red to f inance the purchase of a new home even in the case where there was a 5% down payment. If an i n d u s t r i a l worker in B .C . purchased an average pr iced home in the GVRD in 1971 for $26,471 (column 5, Table 5) with a down payment of $6,617 (25%) the monthly mortgage payments at the p r e v a i l i n g rate of 10% in 1971 on a debt of $19,853 would be $177.59 of p r i n c i p a l and i n t e r e s t amortized over 25 years . The maximum debt permitted with a 30% debt service r a t i o would have been $198.24 (column 4, Table 5 ) . The debt serv ice i s below the requi red income. If one considers the purchase of an average e x i s t i n g home in the Greater Vancouver Regional D i s t r i c t in 1973 according to the T B b l e 5 The P r i c e o f Homes I n M e t r o p o l i t a n V a n c o u v e r R e l a t i v e t o A v e r a g e I n c o m e s o f I n d u s t r i a l W o r k e r s i n B . C . 1 9 6 3 - 1 9 7 3 1 2 3 if 5 6 7 § 2 19 i L M o n t h l y D o l l a r % c h a n g e Maximum A v e r a g e D o l l a r Gros3 c h a n g e i n i n c o m e amount o f p r i c e c h a n g e i n c o m e i n m o n t h l y o f i n o f a v e r - i n c o m e i n c o m e s i n g l B p r i c e a g e t o s e r - f a m i l y w o r k e r v i c e a d w e l l -i n 8 . C . m o r t g a g e i n g s i n d e b t M e t r o b a s e d o n V a n c o u v e r 3 0 % d e b t s e r v i c e r a t i o A v e r a g e a n n u a l i n t e r e s t r a t e s The a n n u a l The m o n t h l y i n c r e a s e i n i n c r e a s e i n i n m o r t -gage d e b t u i t h a 2 5 % down p a y m e n t m o r t g a g e p a y m e n t s o f p r i n c i p a l a n d i n -t e r e s t w i t h a 2 5 % down p a y m e n t The a n n u a l i n c r e a s e i n m o r t g a g e d e b t w i t h 5% down payment a The m o n t h l y i n -c r e a s e i n m o r t g a g e p a y m e n t s o f p r i n c i p a l a n d i n t e r e s t w i t h a 5% down p a y m e n t $ 3 9 0 . £43 4 0 7 . 8 1 4 3 6 . 4 1 4 5 5 . 4 9 4 9 5 . 1 7 5 2 3 . 2 9 5 6 0 . 5 2 5 9 7 . 8 7 6 6 0 . 8 3 7 1 3 . 7 2 71*8.92 $ 1 1 7 . 1 3 8 1 2 , 6 3 7 7% $ 1 7 . 3 8 4 . 5 % 1 2 2 . 3 4 1 3 , 2 0 3 $ 5 6 6 7 $ 4 2 4 2 8 . 6 0 7 . 0 1 3 0 . 9 2 1 3 , 9 6 5 7 6 2 6 7 / 8 5 1 1 2 9 . 0 8 6 . 7 . 1 3 9 . 6 5 1 5 , 2 0 0 1 3 3 5 7 3 / 8 1 0 0 1 3 0 . 6 8 6 . 6 1 4 8 . 8 5 1 7 , 8 3 6 2 6 3 6 7 7 / 8 1917 2 7 . 1 2 5 . 5 1 5 5 . 9 9 2 0 , 5 9 5 2 7 5 9 8 7 / 8 : 2 0 5 9 3 2 . 2 3 7 . 1 1 6 8 . 1 6 2 3 , 9 3 9 3 3 4 4 9 ' 1/4 2 5 0 8 3 3 . 3 5 6 . 7 1 7 9 . 3 6 2 4 , 2 3 9 1 3 0 0 10 3 / 8 9 1 5 6 2 . 9 5 1 0 . 5 1 9 8 . 2 f t 2 6 , 4 7 1 2 2 3 2 10 1 6 1 4 5 3 . 0 9 8 . 0 2 1 4 . 1 8 2 9 , 7 1 4 3 2 4 3 9 1/8 1432 3 5 . 0 0 4 . 9 2 2 4 . 6 8 3 8 . 5 6 1 8 8 4 7 9 1/2 6 6 3 5 on S t a t i s t i c s C a n a d a , C a n a d i a n S t a t i s t i c a l R e v i e w , H i s t o r i c a l i 2 . 9 9 3 . 4 7 7 . 2 4 1 4 . 3 6 1 6 . 6 1 2 1 . 1 1 8 . 2 8 1 4 . 3 2 2 0 . 0 8 5 6 . 8 4 $ 537 7 2 3 1258 2504 2 6 2 1 3116 1235 2 1 2 0 3 0 3 0 8 4 0 4 $ 3 . 7 8 4 . 8 5 9 . 0 5 1 8 . 8 9 2 1 . 3 2 2 6 . 1 9 1 1 . 0 4 1 8 . 7 9 2 5 . 9 3 7 2 . 3 4 ( 5 ) B a s e d on t h e a v e r a g e p r i c e s o f s i n g l e f a m i l y d w e l l i n g s i n t h e GVRD d e r i v e d f r o m R e a l E s t a t e T r e n d s i n M e t r o p o l i t a n  V a n c o u v e r . P u b l i s h e d b y t h e S t a t i s t i c a l S u r v e y c o m m i t t e e o f t h e G r e a t e r V a n c o u v e r R e a l E s t a t e B o a r d A s s o c i a t i o n 1 9 5 3 t o 1 9 7 3 . ( 7 ) R e a l E s t a t e T r e n d s i n M e t r o p o l i t a n V a n c o u v e r 1 9 6 3 - 1 9 7 3 . ( 8 ) The a n n u a l i n c r e a s e i n t h e r e q u i r e d l o a n t o p u r c h a s e a home i n M e t r o p o l i t a n V a n c o u v e r w i t h a 2 5 % down p a y m e n t . ( 9 ) The m o n t h l y i n c r e a s e i n m o r t g a g e p a y m e n t s o f p r i n c i p a l a n d i n t e r e s t a m o r t i z e d o v e r 25 y e a r s w i t h a down p a y m e n t o f 2 5 % . ( 1 0 ) The a n n u a l i n c r e a s e i n t h e r e q u i r e d m o r t g a g e l o a n t o p u r c h a s e a home i n M e t r o p o l i t a n V a n c o u v e r w i t h a 5% down p a y m e n t . ( 1 1 ) The m o n t h l y i n c r e a s e i n t h e m o r t g a g e p a y m e n t s o f p r i n c i p a l a n d i n t e r e s t a m o r t i z e d o v e r 25 y e a r s w i t h a down p a y m e n t o f 5 % . 22 c r l t s r i a n used in Table 5 u i th a 25% dciun payment of $9,640 the iTc-thly payments of p r i n c i p a l and i n t e r e s t on the remainder of $:Z5,920 would be approximately $241.30. Refer r ing back to Table 5 , criumn 4, i f the average worker wished to obtain a mortgage from a c n v e n t i o n a l lender who used a 30% debt serv ice r a t i o , the monthly • a.'-ants great ly exceed those permitted, $224.68). This very element-ary ana lys is excludes the monthly c a l c u l a t i o n of property tax which wi-ild be added to the p r i n c i p a l and i n t e r e s t payments when c a l c u l -ating the minimum requi red 30% of gross income to s a t i s f y the debt . Hr -sver , i t i s obvious that the average i n d u s t r i a l worker i s not capable of purchasing the average p r i c e d home in the Greater Vancouver Regional D i s t r i c t . One may argue that the purchaser may turn to a l t e r n a t i v e s . j r c e s of f inance which do not consider the debt serv ice r a t i o as a major fac tor in determining the amount of the mortgage that could be granted. Cred i t Unions w i l l present ly lend at 75% of the market value of a home charging a s l i g h t l y higher i n t e r e s t rate permit t ing a s l i g h t l y higher debt to serv ice r a t i o . In 1973 the cost of an average pr iced home in the GVRD increased by $8,847. A 25% down payment requires $2,211 cash in add i t ion to the amount requ i red for a home ir. 1972. The average i n d u s t r i a l worker would have to generate an a r r i t i o n a l $2,211 in savings or would have to save approximately 24% D f his gross income for 1973. It should be noted that the preceding analys is merely gives an i n d i c a t i o n of the r e l a t i o n s h i p between the irromes of a large por t ion of the labour force and t h e i r capaci ty to finance homes purchased in 1973. There are many important va r iab les t rs t have not been cons idered . A most important conclus ion i s that e .en i f th i s argument i s accepted, there i s s t i l l a strong demand . 23 for housing which w i l l keep p r i ces h igh . An economic ana lys i s of the housing market requi res recog -n i t ion of a very important economic condi t ion that puts the housing market in a unique a n a l y t i c a l s i t u a t i o n . Addi t ions to the supply of housing account for a very smal l por t ion of the t o t a l supply. The t o t a l stock of s ing le family dwel l ings in the GVRD i s estimated to be 215,445 for the year of 1971.^ The add i t ion to the housing stock in 1971 in the form of s ing le family dwell ings was approximately 5,674 or approximately 2% of the net s tock . Approx-imately 6,726 un i t s were added in 1972 and 5,525 in 1973, y i e l d i n g a stock of 227,698 s ing le fami ly dwel l ings . LJhen cons ider ing housing demand, t h i s aspect of the market i s . c r i t i c a l . Since there are so few housing un i t s created in r e l a t i o n to the t o t a l housing s tock , the amount of demand requi red to absorb the addit ions to the stock are not that g rea t . The average i n d u s t r i a l worker who purchased a home i n the GVRD at the average p r i c e of $26,471 accord ing . to Table 5 with a mortgage of $20,000 can s e l l h i s house for $38,561 in 1973. A f te r paying h i s mortgage o f f , he has approximately $18,000 cash which he would use as a down payment towards the purchase of another home. It i s qui te pass ib le that he may have saved funds ta buy a more expensive home and that he could serv ice the debt given h i s increased equity p o s i t i o n . Combining the a c t i v i t i e s of home owners who have r e a l i z e d a tremendous equity gain and those who are enter ing the market today, the process of f i l t e r i n g takes place and the add i t ions to the stock of housing are qu ick ly absorbed. 24 Demand for Housing as a Function of Populat ion Since the addi t ions to the housing are not that great the demand for housing does not require a s i g n i f i c a n t number of purchasers to give i t s t reng th . A demographic ana lys i s u i l l revea l that increases in populat ion and prospect ive home buyers in the GVRD has created a s u f f i c i e n t demand in the housing market to keep pr ices h igh . ind icates a steady papulat ion grouth in the GVRD betueen 196S and 1971 and produces a bas is for f o r e c a s t i n g s i g n i f i c a n t increases in population in the f u t u r e . A b r i e f cons iderat ion of each component of grouth provides a goad i n d i c a t i o n of the impact t h i s grouth u i l l have on the housing demand. S t a t i s t i c s Canada ind i ca te that the f e r t i l i t y rate uhich i s taken to be the number of ch i ld ren born to a female during her en t i re reproductive l i f e span i s l e v e l l i n g o f f . In r e l a t i o n to Figure 2 the f o l l a u i n g comments may be made regarding f e r t i l i t y ra tes according to S t a t i s t i c s Canada. Analys is of b i r t h r a t e s , mor ta l i t y ra tes and migrat ion rates Figure 2 F e r t i l i t y Rates 4.2 2.4 High 2 ~ ~ - Lou I960 1965 1970 1975 1980 1985 Source: Populat ion pro jec t ions for Canada 1969-1984, S t a t i s t i c s Canada 1970. 25 - There e x i s t s a marked dec l ine in t o t a l f e r t i l i t y from 3.9 to approximately 2.4 in the 196Q's but an achieved l e v e l l i n g out around 1969. - Consider ing the projected ranges to 1984, the most p r a c t i c a l rate i s the medium and u i l l be used as no evidence i s a v a i l a b l e to the cont rary . - The a r r i v a l of a t h i r d c h i l d does not genera l l y a l t e r a f a m i l y ' s need for fami ly housing as does the a r r i v a l of the f i r s t and second c h i l d ; the re fo re , the p ro jec t ions to 1984 have l i t t l e e f f e c t ; the move from an apartment to a s ing le family or a row d u e l l i n g i s usual ly i n i t i a t e d by the f i r s t or second c h i l d . - If a high f e r t i l i t y rate p r e v a i l s say to 2 . 8 , then there u i l l be s i g n i f i c a n t populat ion e f f e c t s but in terms of the household these u i l l not be a f f e c t e d u n t i l the l a t e 1980*s. A rev ieu of an ana lys i s by the Greater Vancouver Regional D i s t r i c t on populat ion grouth confirms these conclus ions by basing i t s forecast on the f a c t that the number of b i r t h s i n the GVRD was 10% louer than the expected number of b i r t h s using the knoun rates for a l l of 5 B.C. Thus, the trend of papulat ion grouth in t h i s area should be r e -duced. Death rates according to S t a t i s t i c s Canada approximate 7.4 people per 1000 of popu la t ion . The GVRD ana lys i s has found t h i s rate to be f a i r l y constant . Migrat ion rates are the most important in an ana lys i s of the GVRD. Migrat ion rates are most important in a papulat ion ana lys i s of the GVRD. Approximately 76.5% of the populat ion increase betueen 1966 and 1971 i s accounted for by mig ra t ion .^ 66% of the t o t a l number of 26 migrants (103,592) were between the ages of 20 and 29 and 28% were 7 between the age of 30 and 39. If one assumes a migrat ion of approx-imately 20,000 per year and that approximately 60% of these are in the age bracket of 20 to 28 t h i s aspect of populat ion growth should have an e f f e c t on demand for housing. It i s not known what percentage of these people would q u a l i f y for f inanc ing of the homes in the present market, however, s ince t h i s age group i s v o n e with the highest f e r t i l i t y r a t e . One could argue that these people would a f f e c t the demand for s ing le family dwel l ings . It i s important to note that they may purchase homes at var ious p r i ce l e v e l s in the housing market absorbing the homes vacated by those moving into more or l e s s expensive homes. The forecast for future growth in the GV/RD i n d i c a t e s that pop-u l a t i o n should increase by 141,678 from 1,028,345 in 1971 to 1,169,923 in 1976. The papulat ion increase forecast for those aged between 20 and 29 should be approximately 7,347 per annum of 25.8% of the average t o t a l populat ion increase of 28,335. The age group between 30 and 39 w i l l have a populat ion increase of approximately 6,202 per annum which i s 21% of the t o t a l populat ion increase per annum. The populat ion s t a t i s t i c s confirm the f a c t that there i s a s i g n i f i c a n t expected growth rate i n populat ion p a r t i c u l a r l y in the age bracket most l i k e l y to enter the housing market. The ent i re demand ana lys is of t h i s chapter has concentrated on s i n g l e family dwel l ings in order to i n t e r p r e t the demand s i t u a t i o n of t h i s p a r t i c u l a r sector of the market. There- i s s u f f i c i e n t information a v a i l a b l e to suggest that the demand for dwel l ing un i ts as a whole i s very strong and u i l l maintain i t s high l e v e l in the f u t u r e . A review of s t a t i s t i c s provided by Centra l Mortgage and Housing Corporat ion and the Economics and S t a t i s t i c s D i v i s i o n of Canada confirm t h i s f a c t . 27 Table 6 re la tes household formation to the t o t a l number of due l l ing s t a r t s between 1961 and 1976. Table 6. Household Formation and Dwelling Unit S tar ts in Metro-p o l i t a n Vancouver 1961 - 1976. Household Formation Family IMon Family To ta l Duel l ing Unit S tar ts 1961 - 1966 23,900 19,700 43,600 46,391 1966 - 1971 42,100 22,400 64,500 69,851 1971 - 1976 55,400 35,600 91,000 98,280 Source : CMHC, Canadian Housing S t a t i s t i c s yearly addi t ions and K i rk land , J . S . , , Demographic Aspects of Housing Demand to 1986 CMHC, Economics and S t a t i s t i c s D i v i s i o n , 1971. The Supply of Housing in Metropol i tan Vancouver Household formations averaged 8,720 annually for the f i r s t ha l f of the 1960's . Housing s t a r t s were 9,278 annual ly . Between 1966 and 1971 the annual average of dwell ing uni ts was 13,970. The average number of household formations were 12,900 for the same per iod . The estimated household formation based on census data between 1971 and 1976 i s approximately 18,200 per year . Approximately 20,000 dwell ing uni ts per year w i l l be required to meet the estimated rate of housing formation. Since 1971 dwell ing unit s t a r t s have been f a l l i n g short of the projected demand. In 1971 there,were 15,553 s t a r t s , in 1972 there were 14,126 and in 1973 there were 14,953 (reference to Tables 7, 8, and 9 provide a de ta i led breakdown of s t a r t s ) . This f igure i s 4,703 uni ts short of the projected dwell ing unit s t a r t s of 1971-1976 per annum required to s a t i s f y housing formation. Thus given the projected popu-l a t i o n growth and housing formation and the t o t a l production of due l l ing Table 7. R e s i d e n t i a l Bu i ld ing A c t i v i t y - Duel l ing Starts in Metropolitan Vancouver 1967-1973 1967 1968 1969 1970 1971 Total 1972 1972* 1973 Single detached 5,980 5,146 4,763 4,482 5,283 25,654 5,625 7,300 6,726 -Semi Detached and Duplex 348 512 402 350 391 2,003 368 368 . 362 6,328 5,658 5,165 4,832 5,674 A l . 27,657 5,993 7,668 7,088 Row 208 311 580 839 1,057 2,995 1,635 945 Apartments 7,085 9,721 11,945 7.762 8,822 45,335 6,896 6,920 7,293 10,032 12,525 8,601 9,879 A2 .48,330 8,103 8,531 7,865 Total Annual S tar ts 13,621 15,690 17,690 13,433 15,553 75,987 14,096 16,199 14,953 * Includes Langley, Maple Ridge and P i t t Meadows Source: CMHC no CD Table 8 . Res ident ia l Bu i ld ing A c t i v i t y - S ingle Family Duel l ing Starts in Metropolitan Vancouver 1967 - 1973 1967 1968 1969 1970 1971 Total 1972 1973 Vancouver 595 528 393 405 595 .2,516 601 699 Burnaby 523 558 498 330 596 2,505 496 544 Neu Westminster 42 15 6 8 22 93 21 19 North Vancouver 531 514 454 412 539 2,450 438 524 West Vancouver 268 242 155 118 114 897 139 165 1,959 1,857 1,506 1,273 1,866 8,461 1,695 2,131 Coquitlam 819 428 231 206 248 1,932 350 52 Port Coquitlam 599 341 413 310 305 1,968 289 28 Port Moody 168 113 63 42 46 432 23 3 1,586 882 707 558 599 4,332 662 83 Richmond 512 507 516 590 610 2,735 718 1,529 Surrey 829 ' 870 729 738 859 4,025 1,070 1,158 White Rock 119 120 117 115 157 628 108 77 Delta 1,267 1,389 1,570 1,551 1,583 7,360 1,729 1,502 2,727 2,886 2,932 2,994 3,207 14,748 3,625 7,020 Miscellaneous 56 33 20 7 - 116 11 39 Total Metro-Vancouver 6,328 5,658 5,165 4,832 5,674 27,657 5,993 Langley - C i ty l l k 1 7 3 Langley - Mun ic ipa l i t y 1,174 1,197 Lions Bay 19 29 Maple Ridge 2 9 0 4 8 3 P i t t Meadous 3 8 153 •Includes duplexes 1,635 2,011 Source: CMHC Table 9 . R e s i d e n t i a l Bu i ld ing A c t i v i t y - . M u l t i p l e Duel l ing Star ts Metropol i tan Vancouver 19G7 - 1973 1967 1968 1969 1970 1971 Tota l 1972 1973 Vancouver 3 ,649 4,626 6,106 1,290 2,716 18,387 1,936 2,610 Burnaby 1 ,310 1,628 1,320 2,116 2,124 8,498 1,119 1,027 New Westminister 914 1,106 . 673 344 133 3,170 149 742 North Vancouver 713 1,170 1,449 884 868 5,084 943 675 west Vancouver 217 133 163 340 197 1,050 183 707 6 ,803 8,663 •9 ,711 . 4,974 6,038 36,189 4,330 5,761 Coquitlam 241 503 837 516 482 2,579 555 168 Port Coquitlam 59 130 231 140 426 986 64 64 Port Moody 102 158 134 370 75 839 . - 78 402 791 1,202 1,026 983 . 4,404 619 330 Richmond _ 69 696 1,424 845 3,034 ' 996 336 Surrrey 10 379 595 469 1,575 3,029 1,420 989 White Rock 72 26 189 159 95 541 347 492 Delta 6 104 131 549 3.43 1,133 96 21 88 578 1,612 2,601 2,858 7,737 2,859 : 1,838 7 ,293 10,032 12,525 8,601 9,879 48,330 7,808 7,865 Miscel laneous Langley - C i ty Langley - M u n i c i p a l i t y Lions Bay Maple Ridge P i t t Meadous 295 354 8 66 264 106 723 370 Source: CMHC 31 units the supply i s F a l l i n g behind the demand. A b r i e f ana l ys i s oF the tuo major components oF s ing le Family duel l ing c o s t s , the land and the cost oF labour and m a t e r i a l s , u i l l put the case oF the cause oF increased costs of housing in perspect ive and u i l l i nd ica te areas of i n t e r e s t regarding p o l i c y to reduce housing cos ts . Tables 10 and 11 provide a l i s t of p r i c e s of serv iced l o t s and the casts af const ruct ion based on mater ia l and labour for the period of 1964-1973. These f i gu res are assembled in Table 12 uhich provides a breakdown of the r e l a t i o n s h i p between the cost of land and the cast of const ruct ion der i v ing an estimated cost of a home. Between 1964 and 1973 the percentage of t o t a l cost of a s i n g l e fami ly dwel l ing re lated to the cost of const ruct ion s t e a d i l y dec l ined from' 71% in 1970 to 49% in 1973. The p r i ce of se rv i ced land as a percent of the t o t a l cost of housing has increased from 29% i n 1964 to 51% in 1973. The most s i g n i f i c a n t increase in the cost of a home was between 1972 and 1973. The amount of the increase i s $12,965. 71% of t h i s increase i s a t t r ibutab le to land while only 29% of t h i s increase i s a t t r i b u t a b l e to the increased cost of labour and m a t e r i a l s . It i s most important that one note these f i g u r e s have no r e l a t i o n s h i p to the market value cost of a s i n g l e fami ly dwe l l ing . These f igures merely i nd i ca te an e f fec t of the market and not a cause. This confirms the t h e o r e t i c a l ana lys is that the costs of land are a funct ion of new house values which, in tu rn , are determined mainly, by the p r i ce of e x i s t i n g housing. Construct ion cos ts , e i the r bu i ld ing costs or land c o s t s , cannot m a t e r i a l l y a f f e c t the current general l e v e l of market p r i c e s . Th is l o g i c a l conc lus ion i s re la ted to the fact that the housing stock i s much la rger than the increment to housing. Re lat ing t h i s important r e a l i z a t i o n to the cost f i gu res determined in Table 12 the supply problem is put into a totally neu perspective. 33 Tel le 10. Cast af Construct ion of S ing le Family Duel l ings in Metropol i tan Vancouver 1964-1973 Year Cast/sq . f t . s td 1200 f t . bungalou Mate r ia l Annual and Do l la r labor cost Change Annual Chang % Cost e Index 1554 10 .60 12,720 1% 104 .3 15SS ' 11 .67 14,004 1,284 7% 113 .2 1557 12 .49 14,988 984 7% 116 .8 1553 13 .55 16,260 1, :272 s% 128 .1 1559 14 .64 17,568 1,308 s% 141 .0 1570 1^ .37 17,224 - 334 -2% 137 .5 1571 14 .45 17,340 116 1% 138 .2 1972 16 .02 19,224 1,884 11% 153 .3 1973 19 .22 23,064 3,840 20% 183 .0 Source: Real Estate Trends in Metropol i tan Vancouver by the S t a t i s t i c a l Survey Committee af the Greater Vancouver Real Estate Board Assoc ia t ion 1961 - 1973. Table 1 1 . Average Cast cif a T y p i c a l Serv iced Lot in Gl/RD ( i964 -1973) Pr ice of Serv iced Annual Do l la r Annual % Lot Change Change 1964 5 ,061 + 411 - 8 % 1966 5,810 749 14% 1967 7,710 1,900 32% 1968 9,600 1,890 24% 1969 11,500 1,900 19% 1970 11,520 20 0% 1971 13,200 1,680 14% 1972 14,708 1,508 11% 1973 23,833 9 ,125 . 62% Source: Determined from Table IX The Housing Issue prepared by the Planning Department of the Gl/RD 1973. Table 12. The Cast of Housing in GvHU i n Ternii Of Ouildlng Ousts Bt'iij Oe.rvluBr.1 Loud Pr ices 19G4-1973 Year T o t a l Cost M a t e r i a l & Land Annual Annual Change due Change due s e r v i c e d Labour B S as a Percent D o l l a r to mat. & labor to land cos t land + a % of T o t a l % of change Change cost l a b o r + Cost T o t a l i n t o t a l i n T o t a l % D o l l a r s m a t e r i a l s Cost cost Cost D o l l a r s % 1964 17,760 . 71% 29% 1966 19,814 70% 30% 11% 2,P54 66% 1355.64 34% 698.36 1967 22,698 66% 34% 14% 2,884 34% 980.56 66% 1 ,903 .44 1968 25,860 62% 38% 13% 3,162 40% 1264.80 60% 1 , 8 9 7 . 2 0 1969 29 ,068 . 60% 40% 12% 3,208 40% 1283.20 60% 1 , 9 2 4 . 8 0 1970 28,744 59% 41% . - 1% - 324 100% - 324 - -1971 30,540 56% 44% 6% 1,796 6% 107.76 94% 1 , 6 8 8 . 2 4 1972 33,932 56% 44% 11% 3,392 55% 1865.60 45% 1 , 5 2 6 . 4 0 1973 46,897 49% 51% , 38% 12,965 29% 3755.65 71% 9209.35 Source : Tables 10 and 1 1 . U1 36 Footnotes X S . U. Hamilton, Dp. c i t , p. 9 . 2 The Canadian S t a t i s t i c a l Review, August 1971 and August 1973, S e r i a l #11-003. Employment Earnings and Hours, August 1971 and August 1973 S e r i a l #72002. ^The Greater Vancouver Regional D i s t r i c t , The Housing Issue Vancouver: A Report by the S t a f f of the Greater Vancouver Regional D i s t r i c t Planning Committee, p. 12. Cent ra l Mortgage and Housing Corporat ion S ing le Family Due l l ing S t a t i s t i c s 1971, 1972, 1973. 5 The Greater Vancouver Regional D i s t r i c t , Populat ion Forecast Vancouver GVRD Planning Department 1973. ^Population Forecast , Op. C i t . 7 Populat ion Forecast , Op. C i t . fl Populat ion Forecast , Op. C i t . CHAPTER IV THE SUPPLY OF SERVICED RESIDENTIAL DUELLING SITES - AN EXAMINATION OF THE FACTORS DETERMINING QUANTITATIVE EXPECTATIONS OF INCREMENTS TO EXISTING HOUSING STOCK THROUGH THE DEVELOPMENT OF SERVICED RESIDENTIAL DUELLING SITES Shortfalls of the supply of residential duelling sites have been documented clearly. The increases in the size of the existing housing stock have not been sufficient to meet the demand expecta-tions generated by net family formations and net migration into the region. It is instructive nou to look at the supply side of the supply/demand equation in order to gain some insights into the a b i l i t y of the suppliers (private developers and/or public agencies) to meet the demands for residential duelling units uithin specified time horizons.* Static Analysis of the Residential Duelling Unit Supply Process Vieued as a static program frozen at any given point in time, the potential supply of residential duelling units in the region may be compared to mathematical sets (see Figure 3). These sets on limitations are particular to the region under consideration. Such limitations may or may not occur in other regions. Perhaps a striking •These expectations do not take into account the limited expansion possible of the process of conversion of residential duelling sites to actual residential duellings. Even i f an unlimited number of residential duelling sites is available, there is a finite capacity of the construction industry to build homes due to incipient shortages of materials, labor management and capital. 37 38 FIGURE 3 Diagram,of Static Analysis of Residential Duelling Unit Supply Process 39 example of such d i f fe rences uould be Houston, Texas, where the non-use of zoning by-laws precludes the c reat ion of development areas . The major set i s the supply of urban designated land within the region, at any given t ime. This would be the acreage of land e i ther zoned for urban r e s i d e n t i a l useage or land which the municipal •r p rov inc ia l au thor i t i es w i l l permit eventual ly to be rezoned into urban r e s i d e n t i a l land . A s p e c i f i c example of the land within t h i s major est would be the acreage designated as non a g r i c u l t u r a l l y frozen land designated by the i n d i v i d u a l m u n i c i p a l i t i e s as s u f f i c i e n t for each m u n i c i p a l i t y ' s urban needs for the f i v e year per iod from 1973 to 1978. These areas, as approved by the Land Commission administer ing the Act on behalf of the Province of B r i t i s h Columbia sets the l i m i t s be-yond 'dnich development cannot proceed within the f i v e year time hor izon, unless leakages occur in the conversion of " f rozen" farm land into urban land. The la rgest subset would be that acreage of urban land which i s s u f f i c i e n t l y c lose to trunk sewer so as to permit development on an economically sound b a s i s . Someone, e i ther the pr ivate developers and/or the munic ipal i ty concerned must underwrite the costs involved in pro -viding l a t e r a l sewer l i n k s , water l i n e s and roads to the land under cons iderat ion . Although considered as a s t a t i c supply for the sake of th is ana lys is the number of acres var ies as a d i rec t r e s u l t of the re la t ionsh ip between lo t p r i c e s , se rv i c ing costs and raw land c o s t s . As lot pr ices r i s e , i t may become more f e a s i b l e to buy less expensive land further away from the e x i s t i n g in f ras t ruc tu re and to occur th i s higher costs of providing serv ices to that land . Within th i s se t , the supply of economically f e a s i b l e land w i l l vary with the pr ice of lo ts 'jjhich i s in turn a funct ion of the r e l a t i v e shortage of supply in 40 the existing and incremental housing stocks in relationship to effective demand. Thus, within this set, the economic forces of the market could be at work: - the supply of serviceable land u i l l in-crease in relationship to the prices paid for the product, serviced land. This analysis does not take into account the externalities which may accompany this development of land further away from this existing infrastructure. Examples of such externalities would be the provision of schools, longer arterial roads and increased community services. The set of land which is economically feasible to service is further limited through the creation of a further subset or subsets of land within the set of land which is economically feasible. Munici-palities in the region designate "development areas" in which the municipalities w i l l permit development to take place normally. These are circumscribed areas set out by the municipal planners in consul-tation with the municipal council. Furthermore such development areas may be given time horizon priorities by the municipality concerned. For example, a municipality w i l l designate an area as Development Area 1 in which a certain level of i n f i l l i n g and development must be achieved before applications w i l l be considered for Development Area 2. Such Development Areas usually, but not always, coincide with the municipality's scheme for providing the necessary infrastructure to that area - particularly sewage treatment f a c i l i t i e s . The boundaries of these development areas may or may not be f i n i t e . In certain i n -stances, certain of the municipalities in the region may consider and approve applications for development from holders of parcels adjacent to or completely outside these development areas. It may be that developers and/or landowners may be able to convince Council that the vantages to th is munic ipa l i t y c f ty ing the non-designated parce l dsr considerat ion to the in f ras t ruc tu re may outweigh the d i s -vantages to the m u n i c i p a l i t y . The incidences of such leakage are duced in the reg ion , however, due to the s p l i n t e r i n g of land owner-ip patterns which make assembly of a s u f f i c i e n t large parce l to =tify the a d d i t i o n a l o f f - s i t e costs which would be incurred by the valoper in ty ing the parce l outside the designated area into the i s t i n g i n f r a s t r u c t u r e . It i s important to point out that the number of acres i n -uded within the subset of designated urban areas i s not the sole tarminant of the number of r e s i d e n t i a l dwell ing uni ts which may be ppl ied from the land in t h i s subset . The o v e r a l l density of develop-nt permitted w i l l a f f e c t the number of r e s i d e n t i a l un i ts that could supp l ied . Such o v e r a l l dens i t ies are the subject of an in te rac t ion tween developers proposing projects and the munic ipa l i t y approving valopments. Some m u n i c i p a l i t i e s w i l l re l y so le l y upon ex i s t ing zoning designate o v e r a l l d e n s i t i e s ; others w i l l consider zoning changes rough land use cont rac ts . For instance , i f s ing le family density ly were permitted by the munic ipa l i t y concerned, then the number r e s i d e n t i a l dwell ing uni ts p o t e n t i a l l y suppl ied would be considerably jer than i f mul t ip le family or mixed density were permitted. Supply of Land Assumed Density Factor Po tent ia l number of r e s i d e n t i a l uni ts ngle 'Family 1000 acres x 4/acre 4000 uni ts xed density 1000' acres x a/acre 8000 units I t i p l e family 1000 acres x 12/acre 12000 uni ts Given the set of acreage included within t h i s designated valopment area(s) times the average o v e r a l l expected density to be rmitted in that area, considerat ion should be given to the l i m i t -ions to the p o t e n t i a l number of r e s i d e n t i a l due l l ing uni ts to be p p l i e d . Due to l i m i t a t i o n s to land assembly u i t h i n , the s p e c i f i e d ea there i s a subset of land u i t h i n the set of development area(s) ich i s the land which can be assembled by pr ivate developers and/or b l i c agencies. This subset of assembled land may be as large as = developable areas, but in most instances i t i s much smal le r , ree l s u i t h i n an assembly area are often i n t e r r e l a t e d to some degree, ny parcels are "key" in that the road pat terns , sani tary and storm uers , sani tary seuer pumping s ta t ions must be located on these ree ls to e f f i c i e n t l y serv ice the area . F r i c t i o n s in the assembly process ar ise from a number of f fe rent f a c t o r s . Instrumental amongst these fac to rs uould be: -Landowners' unwi l l ingness to s e l l due to misplaced expectations at land may be e l i g i b l e for a higher and better use than that d e s i g -ted . For instance , ouners often f e e l that the i r land i s su i tab le r mult ip le family use rather than s ing le fami l y . Such expectations tan may have been generated from observations of " leakages" from a zoning category to another as promoted by developers and fostered the approving m u n i c i p a l i t y . Landouner reluctance to s e l l out to the i r preference to con-nue enjoying the use to uhich the land i s present ly put in sp i te of a lure of monetary reuards . For instance, many smaller acreages are id by o lder people who want to " l a s t out the i r days on the l a n d " , ny farmers wish to continue farming on the land present ly under the i r n t r o l . Present l y , the use of a p a r t i c u l a r parce l may be af such a h use that the developer cannot br ing the surrounding proper t ies the same use because the demand for t h i s high use does not s t . For ins tance , a chicken farm or motel , o r , most commonly, an ansive or s e r i e s of expensive homes may preclude assembly of an : i r e t r a c t at an o v e r a l l p r i ce permit t ing economic development. p a r t i c u l a r l y vexing problem in the Greater Vancouver and Lower ser Val ley region i s the predominance of expensive homes on one ! two acre s i t e s . . (especially vexing to the developer) . Landowners i n f l a t i o n a r y expectat ions have been fueled by the id p r i ce increases in the r e g i o n . Reluctant to s e l l t h e i r land a l l , landowners of ten p r i ce the land at l e v e l s which discount i n -:t ionary expectat ions fa r into the f u t u r e . Landowners often d i s t r u s t p a r t i c i p a n t s in the r e a l estate lustry. These landowners adopt the a t t i tude of "burying t h e i r head the sand" and refuse to even d iscuss the p o s s i b i l i t y of s a l e . The coincidence of these parce ls withheld r i s e s almost geo-r i c a l l y with the number of landowners whose land was to be assembled a given area . In p r a c t i c a l terms, the assembler knows that he w i l l into many times the res i s tance in gathering together t h i r t y acres m ten separate landholders than in put t ing together a comparable r ty acre pa rce l held by three owners. The value of e x i s t i n g s t ructures usual ly r i s e s s i g n i f i c a n t l y n a greater number of landholders hold a given acreage. In the vious example, i t may be that there are ten or more homes placed the t h i r t y acre parce l held by ten landowners while only three =s may be on the comparable t h i r t y acre p a r c e l . In aggregate, the combined e f f e c t of s p l i n t e r e d landholdings 'or holdouts are considerably important when cons ider ing the kk Potent ia l supply of r e s i d e n t i a l due l l ing uni ts within the reg ion . It may be poss ib le within a l im i ted time horizon to assemble a l l or =v=n a s i g n i f i c a n t port ion within a designated urban development =.r = a, but, i f such i s not the case, the r e s i d e n t i a l dwell ing supply pipel ine becomes const r i c ted at the outset . The e f f e c t i s most p r a --punced i f the munic ipa l i t y holds the boundaries of the development =.r = a constant and do not permit s i g n i f i c a n t " leakages" of p o t e n t i a l psvelopments from outside the development areas . Z /namic Analys is of the Res ident ia l Unit Supply Process Given the pool of p o t e n t i a l r e s i d e n t i a l dwell ing s i t e s as indicated by s t a t i c a n a l y s i s , i t i s now necessary to turn to. a dynamic analysis of the production process over time to determine the r e l a t i v e E f f i c i e n c y or i n e f f i c i e n c y of t h i s production process . Foremost amongst the c r i t e r i a by which to judge the process w i l l be the time required to br ing r e s i d e n t i a l dwell ing uni ts t o market and the a t t r i t i o n in numbers of dwell ing unit s i t e s which never can came to market or iihose production w i l l be delayed beyond normal expected time hor izons . It i s one thing for developers and/or pub l i c agencies t o have raw land in inventory and q u i t e another for these raw acreages to be t r a n s -"crmed into serv iced bu i ld ing s i t e s ready for r e s i d e n t i a l cons t ruc t ion . r i g u r e k sets out the dynamic process in s i m p l i f i e d diagramatic form. The time taken for the conversion of raw land into serv iced r e s i d e n t i a l s i t e s can vary considerably from munic ipa l i t y t o munic i -pa l i t y in the reg ion . The time taken to br ing serv iced r e s i d e n t i a l pui ld ing s i t e s t o market can also vary considerably within a munic i -pa l i t y from decade t o decade. Time taken can be broadly broken down into time spent on three f u n c t i o n s : -45 FIGURE 4 P i c t o r i a l Representation of Dynamic Analys is of Res ident ia l Duel l ing Unit Supply Process Duel l ing unit construct ion A Subdiv is ion construct ion and/or s i t e se rv i c ing A :ars V7 cn ra cn cn cn -p •H •n CO n -P ZJ cn c n x : c cn •rH 3 rH D n rH FH QJ x : 3 - P XI cn 03 cn cn CO Q. • 03 n E - P Z) c C 03 E c cx •H a rH cn cn cn > a 03 _J XJ A time X J E c 03 O cn -H cn -p CO CJ ZI X I ( H C - P co cn rH C • u~ a • •p c -H • c •H • -p a . a i 03 c u -H C rH •H rH 03 E 3 O XI f-l o c 03 x : . y cn CO -H - P C 03 E • - P Guiding the development through the municipal approval process A Assembly of rau land 46 1. The assembly of raw land 2. The municipal approval process 3. The construction process uith regard to servicing the duelling si t e . Assembly of Rau Land Rau land assembly is a process that may happen quite quickly or i t nay be drawn out over a considerable period of time. It may be that the developer and/or public agency has sufficient land in inven-tory L-hen the creation of a development area is announced by the municipality. It may be that an experienced assembler can put to-gether a parcel sufficiently large for development within a matter of weeks. In most instances, however, land assembly in the region is a S I D U , frustrating task which takes at least several months and even last far years. Competition between the developers is intense. A number of developers may be working on an area simultaneously. Each may acquire crucial "key" parcels, frustrating the attempts of the others. Often, long periods of intensive negotiation betueen the developers u i l l de-termine uhich developer(s) end up uith the developable package. A l l assemblies are subject to the time consuming problem of dealing with "holtinuts". It may be in the end, that their efforts come to naught. Competition amongst the developers is not of interest for the crucial question is the number of raw sites which may be gathered to-gether in aggregate by a l l the participants. The point to note is that there may be considerable delays encountered by the participants in assembling the.land due to competition among themselves. The Municipal Approval Process The time taken to guide subdivisions and/or multi-family bui ld ing s i t e s through the municipal approval process i s the c r i t i c a l element in the time taken to convert rau land into serv iced bu i ld ing s i t E s . The number of i n te rac t ions betueen the developer and the munic ipal i ty are s tead i l y increas ing and the issues are becoming more complex as urban areas expand and encounter problems inherent u i th grouth. The subd iv i s ion approval process of the Borough of Scarbor -ough = 3 out l ined by Andre Derkouski''" ind icates that there are 90 agencies that may have a voice in the process of development approval . The process of approval i s being constrained by the multitude of issues uhich a r i se in the cases of equating s o c i a l casts u i t h pr ivate costs . It i s unfortunate that u i t h i n the complexity of the process i t i s only the developer uho represents the consumer of housing as various agencies involved are general ly those concerned u i th the impost of addit ions to housing stock in the e x i s t i n g housing stock and the tradE - a f f of the increased costs of development imposed upon the munic ipal i ty vs the benef i t Df municipal population grouth. The f i n a n c i a l p o s i t i o n of m u n i c i p a l i t i e s and the ro le of the p rov inc ia l government has an important impact upon the time required in process of approval . In cases uhere municipal budgets are not capable of incur r ing a d d i t i o n a l development the incent ive of the munic ipal i ty to reduce the time required for approval does not e x i s t . In s0.713 cases the time created by a s lou approval process i s an asset to the munic ipa l i t y i n the respect that i t may requi re the add i t iona l time to determine the optimal type of development given i t s f i n a n c i a l pos i t ion or succeed in impressing the p r o v i n c i a l govern-ment that a ser ious municipal f inance s i t u a t i o n e x i s t s . The planner also has an important ra le regarding the e f f i c i e n c y of the dynamics of the approval process . A comprehensive plan re la ted 48 to the financial position of the municipality and the optimal develop-ment situation required in order to satisfy the municipal budget provides the superstructure in which the planner may introduce his concepts regarding the services that are required in the develop-ment of a municipality. The approval process must function within the general framework outlined by the planner. If the objectives and goals of the municipality are not well established in a comprehensive plan the micro economics of the approval process cannot function properly. If the engineer or school board or other various author-ities involved in the approval process are not cognizant of an overall municipal planning policy uith specified objectives the approval process is burdened as various authorities attempt to relate their function of approval to the undetermined policy. The local politician also has an important function regarding the time required for approval process. There is a very important trade-off between the technical assets or disadvantages of a develop-ment and i t s impact in the p o l i t i c a l environment in the community. The primary concern of the local poli t i c i a n . i s to observe that the ratepayer is not being harmed by a development in respect that public and social costs created by a development do not exceed the benefit tD the community as a uhole. Some of the considerations that the politician uould take into account are: 1. Tax burden to existing residents; 2. Resistence of residents to grouth in population; 3. Environmental costs; 4. Desire of residents to upgrade the quality of residential units by encouraging consumers of a high income scale; 5. Resistence to increased density (multi-family projects). 49 These are a feu of the const ra ints that can be imposed on the supply of housing uni ts in the dynamic process of subd iv is ion approval . The d i rec t r e s u l t s uiould be a decrease in the number of r e s i d e n t i a l uni ts brought on and increases in the time taken to obtain approval . Subdiv is ion Construct ion The subdiv is ion construct ion stage of the dynamic process i s not unduly c o n s t r i c t i n g in terms of t ime. Serv ic ing of land can usual ly be accomplished in three to s ix months given normal cond i t ions . Mater ia l shortages are however, a problem at ce r ta in t imes. No a t t r i t i o n s in supply occur in that no due l l ing s i t e s uould be l o s t at th is s tage. Duel l ing Unit Construct ion Duel l ing unit construct ion time lags do occur but are not unduly c r i t i c a l . Res ident ia l due l l ings usual ly take from three to nine months to complete. Completion periods can be lengthened through shortages of labor and m a t e r i a l s . No a t t r i t i o n in the number of r e s i d e n t i a l due l l ing uni ts occurs at t h i s s tage. The publ ic sector ro le in the assembly, development and d i s -pos i t ion of serv iced r e s i d e n t i a l due l l ing s i t e s u i l l be more p a r t i c u -l a r l y analysed in the f o l l o u i n g chapters . Footnotes Andre Derkouski, Res ident ia l Land Development in Ontar io , a report prepared by the Urban Development Ins t i tu te of Ontar io , November 1972. CHAPTER \1 THE MUNICIPAL RDLE IN THE ASSEMBLY, DEVELOPMENT AND DISPOSITION OF LAND FOR RESIDENTIAL PURPOSES Although assembly, subdiv is ion and development have usual ly been car r ied out by pr ivate developers, ce r ta in m u n i c i p a l i t i e s have also become involved in the process for various reasons. T r a d i t i o n -a l l y the m u n i c i p a l i t i e s ' ro le has been to provide serv ices to the new r e s i d e n t i a l s u b d i v i s i o n s , and, more p a r t i c u l a r l y , to approve such subd iv i s ions . However, t h i s thes is u i l l be mainly concerned with the * ro le the m u n i c i p a l i t i e s played in the development process and not the t r a d i t i o n a l ro le prev iously mentioned. Munic ipal powers w i l l be b r i e f l y reviewed, and p o l i c i e s r e -garding the development process w i l l be studied more c a r e f u l l y in the m u n i c i p a l i t i e s of Surrey, Burnaby and North Vancouver D i s t r i c t , as wel l as the i r land ho ld ings . F i n a l l y , impl i ca t ions of such p o l i c i e s w i l l be discussed in r e l a t i o n to the e x i s t i n g housing shortage. Legal Powers Under sect ion 92(8) of the B r i t i s h North America Act , municipal governments became Dne of the r e s p o n s i b i l i t i e s assigned to the prov inces . The range of powers, r e s p o n s i b i l i t i e s and revenue sources assigned to the municipal uni ts estab l ished in each province are set out in *The assembly, development and d i s p o s i t i o n of land for immediate and future pr ivate uses, p a r t i c u l a r l y in regard to housing. 51 52 p rov inc ia l l e g i s l a t i o n . As Crawford s t a t e s : " . . . . I t i s important to remember that the l e g a l competence of a corporat ion to act i s l im i ted to the pouers given in i t s charteT or other source of incorporat ion and conversely that pouers uhich are not so expressly granted are beyond i t s l e g a l c a p a c i t y . " Chapter 255 of the P r o v i n c i a l Statutes , the Municipal Act of Br i t i sh . Columbia, designates the pouers and duties of a l l m u n i c i p a l i -t i es of the Province, except those of the C i ty of Vancouver. Among tn= pouers and duties are many uh ich , d i r e c t l y or i n d i r e c t l y , a f f e c t tr,= f i e l d of housing, such as zoning pouers (s . 702-710), land subdiv is ion regulat ions (s . 711-713), assessment and taxat ion (s . 367-434) and f i n a l l y , pouers for a c q u i s i t i o n ( s . 465) and d i s p o s i t i o n of rea l property (s . .471, 477 and 477 a ) . A. Acqu is i t i on and development of land Sect ion 465 confers upon Counci l the pouer to develop land L'.ndar municipal ownership for r e s i d e n t i a l purposes. In addi t ion Counci l ray, in accordance with a by-law or r e s o l u t i o n , acquire land for such purposes, namely r e s i d e n t i a l development. F i n a l l y , in accordance with = by-law and with the approval of the Lieutenant-Governor in Counc i l , t ie Counci l may acquire land by expropr ia t ion . Consequently, the r u n i c i p a l i t i e s have a l l the necessary powers to carry out any r e s i -r e n t i a l development. Furthermore, under sect ions 214 and 215 of the E. C. Municipal Act , the m u n i c i p a l i t i e s are empowered to .enter into a partnership agreement with any other l eve l s of government for housing r_rposes. However, sect ion 216 p roh ib i t s such partnership with any r r i vate developer. "..-awer granted in 1958 by an amendment to the B. C. Munic ipal Act . 53 B. D ispos i t ion of Land Sect ion 471 empowers the m u n i c i p a l i t i e s to s e l l by auction •r otherwise any municipal land which i s not reserved or dedicated tD publ ic uses. The municipal counc i l may also pass a by-law enabling them to lease for a term not exceeding 99 years any land su i tab le for r e s i d e n t i a l purposes (s . 477). Cer ta in condit ions in th i s l a t t e r sect ion l i m i t the la t i tude of the m u n i c i p a l i t i e s . However, those condit ions do not apply when land i s leased for the purpose of providing housing (s . 477a). The only r e s t r i c t i o n l i m i t i n g the munic ipa l i t ies i s contained in sect ion 470 whereby the counc i l i s not allowed to dispose of i t s land through an option agreement; as mentioned e a r l i e r , a l l d i s p o s i t i o n of municipal land i s done through the bidding process . M u n i c i p a l i t i e s have a l l the necessary powers, to a c t i v e l y par -t i c i p a t e in the development process . To f u l l y appreciate such powers, the p o l i c i e s of three se lected m u n i c i p a l i t i e s w i l l be analysed. Municipal P o l i c i e s (se lected m u n i c i p a l i t i e s ) The fac t that m u n i c i p a l i t i e s are landholders i s not a highly publ ic i zed matter . However, due to acc identa l circumstances some mun ic ipa l i t i es own large port ions of undeveloped lands within the i r boundaries. A major part of those landholdings was acquired during the depression years . In the ear ly years , the i r main concerns were to dispose of land as fast as they could to increase the i r f i n a n c i a l p o s i t i o n . Rea l i z ing the p o t e n t i a l worth of the i r ho ld ings , munic i -Power granted in 1964 by an amendment to the B. C. Municipal Act . 54 p a l i t i a s began to e s t a b l i s h p o l i c i e s and g u i d e l i n e s . Such p o l i c i e s followed by these se lected m u n i c i p a l i t i e s over the years in regard to the i r land h o l d i n g s , u i l l be examined. A. Surrey The D i s t r i c t Mun ic ipa l i t y of Surrey did not consider the potent ia l worth of i t s holdings u n t i l 1965. At that t ime, the planning department of the•• munic ipa l i t y issued a report deal ing with contro l of urban growth. One of the p o l i c i e s recommended to Counci l was in regard to the ro le that the lands under municipal ownership 2 could play in the cont ro l of growth. The report s t a t e s : " . . . . ( t h e y should r e t a i n ) large parce ls of land in publ ic ownership as a means of postponing or hastening develop-ment in given a r e a s . " Consequently, t h i s recommendation seems to ind icate that the munic i -p a l i t y was going to withhold land for planning considerat ions rather than for development. The fo l lowing reasons were g iven : Sur rey 's past p o l i c y , p a r t i c u l a r l y in regard to zoning and prov is ion of s e r -v i ces , had resu l ted in an extremely scat tered development which was d i f f i c u l t and cost l y to s e r v i c e . As a r e s u l t of ind isc r iminate sub-d i v i s ion in the f i f t e e n years subsequent to World War II, much of the land in Surrey had been subdivided in a manner which l e f t very few large parcels ava i lab le for planned, co -o rd inated , comprehensive development. Consequently, the retent ion and the a c q u i s i t i o n ( i f f i n a n c i a l l y poss ib le ) of large underdeveloped parce ls of land would prevent such scattered development. To achieve that goa l , the report s ta tes :^ " . . . . a t leas t for a few years, a ce r ta in percentage of the budget (should be set as ide ) , for the express purpose of land a c q u i s i t i o n of a range and degree which w i l l enable i t to cont ro l the pace of subd iv is ion a c t i v i t y in se lected areas of the m u n i c i p a l i t y . " 55 It was discovered that only two large parce ls of land were considered for a c q u i s i t i o n fo l lowing the r e p o r t ' s recommendations. The f i r s t parce l was adjacent to a large municipal holding known as "Sunnyside Acres" (453.acres ) . It contains 153 acres (mare or l ess ) and i t was owned by White Rock Waterworks L imi ted . However, the acqu is i t ion was not completed for undisclosed reasons. The second pares! known as "Green Timbers S i t e " (approximately 430 acres) was acquired in 1969. Several reasons were given for making so few a c q u i s i t i o n s . They were v i r t u a l l y the only large consol idated parcels of su i table land ava i lab le for a large scale comprehensive development l e f t within the m u n i c i p a l i t y . Even though there were large areas of underdeveloped and badly subdivided land under pr ivate or municipal ownership, no land conso l idat ion was considered due to a lack of s t a f f and exper t i se . However, the main const ra int was the f i n a n c i a l i n -a b i l i t y to carry out such an a c q u i s i t i o n program. As there i s no c l a s s i f i e d inventory of smal l municipal land 4 holdings in the m u n i c i p a l i t y , a municipal land use map was used to. ascertain the amount of undeveloped municipal land ho ld ings . D i s -counting the two large parce ls of land under municipal ownership mentioned above, i t was discovered that 762 acres were under municipal con t ro l . However, few of those p a r c e l s , namely 200 acres (more or l e s s ) , were within the designated urban growth areas estab l i shed by Counc i l . However, fur ther land conso l idat ion was required to get a subdiv is ion approval . Rea l i z ing the f i n a n c i a l p o t e n t i a l of such hold ings , in 1973, Counci l h i red a former developer to carry out the development of municipal holdings within the designated urban growth areas . Such development would be p r o f i t - o r i e n t e d and no cons iderat ion would be 56 given to the ex i s t ing housing s i t u a t i o n . As there i s no d e f i n i t e po l icy out l ined by Counci l regarding the development of smal l holdings under municipal ownership in the near fu tu re , each develop-ment proposal would be judged on i t s own mer i t . The lack of a c l a s s i f i e d inventory w i l l obl ige the land de-partment to get the approbation of many municipal d i v i s i o n s p r io r to s tar t ing the development of any given parce l of land .* Furthermore, the planning department w i l l exercise a t igh t cont ro l on any municipal development, namely because such municipal undertaking would inf luence the type of development that would be required by any pr ivate developer. Consequently, the process i s going to be very cumbersome and lengthy, espec ia l l y in the immediate fu tu re . The other const ra int w i l l be the lack of money to carry out such development; as there i s no revolv ing fund e s t a b l i s h e d , the authority to borrow such money w i l l have to be obtained from the p rov inc ia l government. In addi t ion to these problems, the munic ipa l i t y i s ha-pered by a lack of q u a l i f i e d s t a f f to enable large scale develop-ment to take p l a c e . However, at the end of 1973 Counci l approved the d i s p o s i t i o n of 4C acres of municipal land for r e s i d e n t i a l purposes. Such project set the framework for a po l i cy of land d i s p o s i t i o n . The fo l lowing procedure was adopted: the munic ipa l i t y analysed one p a r t i c u l a r s i t e , completed the assembly, obtained a l l the necessary approvals and offered through the tendering process, that parce l of land . The bidders had to come up with a value on that parce l of land coupled with a plan of development. *As there i s no land c l a s s i f i c a t i o n a l l the departments, such as parks and school branches, requ i r ing land for pub l i c purposes, w i l l have to be contacted. 57 As the land uas undeveloped but zoned for single family duellings, the municipality had to approve the bidder uho offered a reasonable price for the parcel of land. The planning department recommended to council the bidder uhich had, in their opinion, the best plan of development. Such procedure enabled the municipality to obtain immediate cash far i t s parcel of land and retained control on.the type of development that uould take place. By using such a policy, the municipality did not s e l l i t s parcel of land unconditionally; i t forced the buyer to proceed uith the development in a relatively short period of time. Also, there is no municipal financing required, unless the municipal land is not large enough to permit such development. In that project, the munici-pality had to borrou for a short period of time an amount of $4QD,0DD from the provincial government to acquire additional land. In that specific project, the municipality sold the parcel of land for $1.1 million dollars realizing a profit of six hundred thousand * dollars. Finally, i t should be pointed out that the municipality u i l l benefit from that project in two uays. A portion of the profit realized u i l l serve to establish a land development fund. Consequently, no provincial borrouing u i l l be necessary to-carry out similar pro-jects. Secondly the type of development uhich u i l l take place u i l l create additional revenues to the municipality when completed. From the private developer's point of view, there s t i l l exist some ad-vantages .because the hassle of land assembly is avoided, and, there is no municipal approval to obtain; such approvals were granted prior •Approximate profit after paying back the loan and deducting the ad-ministrative costs incurred during the land consolidation. 58 to the tendering of the l a n d . A l so , there i s s t i l l p r o f i t to generate through the s e r v i c i n g and the d i s p o s i t i o n of serv iced l o t s . In summary, i t must be emphasized that the main points of the land p o l i c y in the D i s t r i c t Mun ic ipa l i t y Df Surrey a r e : ' - r e ten t ion of large holdings for planning c o n t r o l ; - lack of comprehensive p o l i c y u i t h regard to development of smal l holdings not requi red for p u b l i c purposes; - a very l i m i t e d number of land holdings i n the e x i s t i n g designated urban growth areas to enable a large i n v o l v e -ment in land development. B. Burnaby 1) Background As with most of the other m u n i c i p a l i t i e s , the' D i s t r i c t Mun ic ipa l i t y of Burnaby acquired i t s land holdings through fo rec losure on land for tax payment d e f a u l t , e s p e c i a l l y during the depression years . At one po in t , the D i s t r i c t had acquired c lose to k0% o f the land within i t s boundar ies. Over the years the Counc i l p o l i c y was to dispose of most of the parce ls of land which were s e r v i c e d , as r a p i d l y as a p p l i c a t i o n s to purchase were r e c e i v e d . A l l the undeveloped lands under munic ipal ownership were kept in a reserve u n t i l fu r ther land conso l ida t ion made i t poss ib le to dispose o f . However, during the 1960's , Counc i l became more re luc tant to approve d i s p o s i t i o n of undeveloped lands , because pr i vate developers were r e a l i z i n g too large a p r o f i t through development of such lands . As a r e s u l t , the mun ic ipa l i t y considered i t more appropr iate to r e t a i n ownership of e x i s t i n g land holdings as wel l as acqu i r ing a d d i t i o n a l 5 l and . In December 1968, Counci l passed a r e s o l u t i o n to that e f f e c t : *Dther reasons being a change in the method of land d i s p o s i t i o n and new municipal p o l i c i e s . 59 The munic ipa l i t y u i l l undertake a gradual a c q u i s i t i o n of undeveloped land adjacent to ex i s t ing municipal land holdings and u i l l , uhenever i t i s p o s s i b l e , acquire the remaining s t r a t e g i c undeveloped holdings u i t h i n i t s boundaries. Tuo reasons uere given for such p o l i c y : F i r s t l y , the source of municipal ho ld ings , namely, land acquired through fo rec losure , uas d r a s t i c a l l y d imin ish ing , but the cost of neu land a c q u i s i t i o n s uas increas ing very r a p i d l y . Secondly, as the munic ipa l i t y wanted to obtain cont ro l of a l l undeveloped parcels of land as an a d d i t i o n a l planning t o o l to curb growth, a d d i t i o n a l funds were needed to achieve such a g o a l . This argument shows the weakness of the zoning power. To consol idate e x i s t i n g land ho ld ings , the Counci l agreed to devote 2-3 m i l l s out of the municipal budget. Furthermore, Counci l passed a reso lu t ion in June 1970^ to reserve a l l the monies- r e a l i z e d on the d i s p o s i t i o n of tax sa le lands as exc lus ive ly as poss ib le to that same o b j e c t i v e . Consequently, the munic ipa l i t y was f i n a n c i a l l y able to achieve i t s land conso l idat ion program. 2) Munic ipal land holding ana lys is To e s t a b l i s h p r i o r i t i e s in the i r land a c q u i s i t i o n program, the planning department c a r r i e d out a thorough ana lys is of each munic ipa l i t y owned parce l of land and determined the type of present and future uses in accordance with the o v e r a l l community needs. The 7 report uas re leased in 1971 and included the f o l l o u i n g recommendations. The report ind icated that 3,325 acres uere under municipal ounership (approximately 14.8% of the t o t a l acreage of the munic i -p a l i t y ) : that 2,214 acres should be reta ined pending a v a i l a b i l i t y of serv ices and fur ther s u b d i v i s i o n : that 1,D10 acres shoudl be sold c o n d i t i o n a l l y , subject to consolidation and municipal guide l i n e s : that 12 acres should be so ld cond i t i ona l l y subject to c o n s o l i d a t i o n : 60 that 4 acres should be so ld subject to ex i s t ing land uses. From the analys is of the repor t , i t seems evident that the m u n i c i p a l i t y ' s po l i cy was to r e t a i n most of i t s holdings for use as a v i t a l planning t o o l to r e a l i z e short and long term cont ro l over municipal growth. To supplement t h i s a f f i r m a t i o n , i t was demonstrated, by a survey ca r r i ed out in January 1974, that the munic ipa l i t y owned 3,664 acres of undeveloped lands (of which 500 acres i s r e -served for publ ic uses ) . By r e l a t i n g that survey to the report issued in 1971, i t was establ ished that the reso lu t ion passed by Counci l in 1968 was fol lowed very c l o s e l y , namely the a c q u i s i t i o n of undeveloped land to consol idate ex is t ing municipal holdings and i t s re tent ion pending a v a i l a b i l i t y of s e r v i c e s . Consequently, the prov is ion of serv ices and the r e -tent ion of large t rac ts of undeveloped land are the two major too ls • of the munic ipa l i t y to ensure order ly development. However, the munic ipa l i t y adapted a po l i cy re la ted to the d i s p o s i t i o n of land; such po l i cy a f f e c t s only marginal smal l holdings which are not required by the munic ipa l i t y for c e n t r a l development. Counci l passed in 1970 the fo l lowing reso lu t ion which i s s t i l l in force today:^ - The best i n t e r e s t s of the munic ipa l i t y w i l l be served by a cont inuat ion of the sale po l i cy for a l l r e s i d e n t i a l lands which may be decided to be placed in a sale p o s i t i o n ; - I f , and when, any large t rac t of land scheduled for r e s i d -e n t i a l development becomes a v a i l a b l e , the Counci l at that time s h a l l re-examine the s i t u a t i o n to consider the p o s s i -b i l i t y of leas ing the ent i re s i t e ; 61 - Under- no circumstances u i l l counc i l consider the lease concept for i n d i v i d u a l or smal l groups of r e s i d e n t i a l l o t s . Such po l i cy uas adapted for the f a l l o u i n g reasons. The muni-i p a l i t y i s p r imar i l y assembling land for planning c o n t r o l . Any a r g i n a l land unnecessary for that purpose can be sold in order to "crease the f i n a n c i a l revenues of the m u n i c i p a l i t y . Such revenues cu ld serve the purpose of acqui r ing add i t i ona l s t r a t e g i c parcels of and which w i l l i n fact contr ibute to the o v e r a l l wel l being of the u n i c i p a l i t y . So far as the d i s p o s i t i o n of a large undeveloped t rac t f land i s concerned, the leas ing opt ion was adopted in order to keep c n t r o l on the o v e r a l l type of development. The munic ipa l i t y also cu ld share in the accruing values that ownership in the property culd prov ide. Such p o l i c y ind ica tes c l e a r l y that the municipal involvement n the development process i s l i m i t e d mainly to land assembly for lanning c o n t r o l . Any land d i s p o s i t i o n i s only accepted when there i s n i n s u f f i c i e n t amount of land ava i lab le to exercise adequate cont ro l n the future development of the surrounding a rea . The other cons ider -ation i s the locat ion of such parcels of l and . In summary, the main points of the land p o l i c y of the D i s t r i c t w u n i c i p a l i t y of Burnaby a re : - Consol idat ion and re tent ion of undeveloped land holdings for planning c o n t r o l ; - A c q u i s i t i o n of s t r a t e g i c undeveloped parce ls of land to cont ro l the type of development in the surrounding area; - D ispos i t ion by sa le of marginal parcels of land in order to increase the ex i s t ing land revolv ing fund. 62 C. North Vancouver D i s t r i c t 1) Background D U B to the rough topography of the North Share and the d i f f i -cu l t ies faced in prov is ion of adequate s e r v i c i n g , mast of the land reverted to the D i s t r i c t in the ear ly 1930's . The D i s t r i c t , incapable c f meeting i t s debts, was in rece iversh ip u n t i l 1948. During that period the D i s t r i c t was r i c h in land but poor in revenue. To s t a b i l i z e t ie f i n a n c i a l s i t u a t i o n , the Commissioner, appointed by the p r o v i n c i a l crvernment to administer the D i s t r i c t , adopted the fo l lowing p o l i c y . Trie municipal land should be disposed of at a l l cost in order to increase the revenues through property taxat ion . To achieve that goal municipal land was so ld at 50% of the assessed value (approximately one- th i rd of market v a l u e ) . After r e - i n s t a l l m e n t of Counc i l , the same po l i cy was fol lowed u n t i l 1952, when the land was to be disposed of at the assessed value (approximately 60% of market va lue ) . However, the sa le pr ice was gradually increased to the market value, but was negotiated and approved by Counc i l . During the 1950's , pr ivate developers were able to acquire large undeveloped parcels of land from the d i s t r i c t and subdivide them into l o t s . Such lo ts within those new subdiv is ions were disposed of by cevslopers at a large p r o f i t . To regulate the land p o l i c y , the Ccunci l h i red a planner and a land agent in 1956. In October 1956 a pol icy of land sale by pub l i c tender was estab l i shed in the D i s t r i c t tz supersede the former po l i cy of d i rec t negot ia t ion . In 1957, Counci l adapted the po l i cy of d isposing of municipal lend by publ ic tender, with one except ion . The Counci l maintained the p r i n c i p l e of d i rec t negot iat ion for the d i s p o s i t i o n of substandard 63 i ts ; the reason being that only tuo persons, namely the adjacent jnsrs, could obtain such municipal l and . The land uas unsuitable ;r development but could generate revenues to the D i s t r i c t . Counci l approved the f i r s t land a c q u i s i t i o n in March 1958. i= purpose of such a c q u i s i t i o n uas to consol idate ex i s t ing municipal i l d ings . Subsequently, the land uas disposed of under a municipal ji-mitment to provide s e r v i c e s . During the f o l l o u i n g years, the i l i c y uas to dispose of smal l undeveloped acreages to pr ivate •velopers. Houever, in 1962, Counci l agreed to serv ice i t s oun ibdiv is ions and s e l l l o t s on an i n d i v i d u a l basis to cont rac tors . ; a l i z i n g the p r o f i t s made on such developments, Counci l estab l ished _956) a revolv ing land development fund to exercise- the po l i cy of a i l i n g i n d i v i d u a l serv iced l o t s . This sale provided Counci l u i th dd i t iona l sources of f inanc ing required for road cons t ruc t ion . Further , in 1969, Counci l abol ished the se rv i c ing option in =ss sale tenders uhich permitted developers the opportunity of erv ic ing the s u b d i v i s i o n . After 1969 the D i s t r i c t adopted the j l i c y of carry ing out the f u l l development of a l l municipal lands id disposing of serv iced l o t s on an i n d i v i d u a l b a s i s . In order to alp the b idders , the D i s t r i c t s t i l l maintains an up - to -date . inventory current lo t s a l e s . This inventory i s ava i lab le to any i n d i v i d u a l ion request at the municipal o f f i c e . By f o l l o u i n g such a po l i cy of :nd d i s p o s i t i o n the D i s t r i c t uas able to carry out add i t i ona l c a p i t a l ;provement programs uithout having to burden i t s l o c a l taxpayers. Houever, Counci l uas and remains re luctant to approve any neu ;nd a c q u i s i t i o n . Preference i s given to the r e p l o t t i n g prov is ions 'a i lab le to the m u n i c i p a l i t i e s under the B. C. Munic ipal Act ; . 825-858). Those sect ions empouer the Counci l to designate an area Sk for r s p l a t t i n g , whereby a new land subd iv is ion w i l l take place and w h e r e b y each owner w i l l be compensated f i n a n c i a l l y DT otherwise for the loss of t h e i r property . Where only land i s invo lved , the same amount of land w i l l revert to the owner under the new s u b d i v i s i o n . F i n a l l y , Counci l r e l i e d mostly on i t s actua l land holdings to achieve i t s land development p o l i c y . It was assumed that there was no need to acquire a d d i t i o n a l l and . For v e r i f i c a t i o n of t h i s assumption, an ana lys is of the municipal land holdings was ca r r i ed out and a survey made in 1973 was used as re fe rence . 2) Munic ipal Land Holdings Analys is -For the purpose of the ana lys is the D i s t r i c t w i l l be div ided into two s e c t i o n s ; namely, the Capilano area (from the West Vancouver municipal boundaries to the Seymour River) and the Seymour area (from the Saymour River to the Indian Arm Ri.ver). Reasons for the d i v i s i o n are as fo l lows : a) IMo major development w i l l take place in the Seymour area u n t i l the planning department confirms the locat ion of the town center . Presently , negot iat ions are taking place with the Nat ional Harbours Board to determine the f e a s i b i l i t y of using the i r lands in an o v e r a l l redevelopment concept. A d d i t i o n a l l y , a study i s present ly being p re -pared to determine the type of development to take place in the ent i re Seymour area . b) Due to the rough topography of the whole d i s t r i c t , Counci l establ ished the fo l lowing guide l ines r e s t r i c t i n g land development: (1) In the Seymour area, phase I w i l l cons is t of developing lands up to a maximum of 550 feet above the sea l e v e l . In phase II i t w i l l be up to 1050 f e e t . 65 (2) In the Capilano area , i t u i l l be up to a maximum of 1050 feet in phase I and up to 1250 feet in phase II . These gu ide l ines were es tab l i shed due to the d i f f i c u l t y in provid ing the necessary se rv i ces and the cost involved i f they uere prov ided. Such gu ide l ines r e f l e c t the present s i t u a t i o n . To be cons is tent u i t h the munic ipal gu ide l ines above the ana lys i s uas set accord ing l y . In the survey used as a reference, 1 ' " 1 7,604 acres are shoun under munic ipal ownership. Hauever, approx-imately 264 acres are under the con t ro l of the C i t y of North Vancouver. Approximately 1,640 acres i s present ly used or. reserved for pub l i c purposes. Consequently, 5,680 acres i s present ly undeveloped. The breakdown of undeveloped lands i s as f o l l o w s : (a) Seymour Area Phase I 1,000 acres Phase I I . 620 acres • Lands held but present ly i n a c c e s -s i b l e for development 2,160 acres (b) Capilano Area Phase I.... 500 acres Phase II 600 acres Lands held but present ly i n a c c e s -s i b l e for development 800 acres The land development po l i cy set by Counci l i s to provide an amount of 2 m i l l i o n d o l l a r s per year touard the c a p i t a l program of the munic ipa l i t y and there appears to be enough undeveloped lands to achieve t h i s f i n a n c i a l g o a l . Furthermore, the rap id l y increas ing p r i ces for serv iced l o t s reduces the u i l l i n g n e s s of the D i s t r i c t to accelerate i t s development p o l i c y . As l o t p r ices increase less l o t s are developed to meet the Counci l target of 2 m i l l i o n d o l l a r s p r o f i t per year . 66 3) Land D i s p o s i t i o n Program (Appendix A) U i th regard to munic ipal p o l i c y on land d i s p o s i t i o n , i t uas mentioned e a r l i e r that the mun ic ipa l i t y disposed of serv iced lo ts on an i n d i v i d u a l bas is o n l y . U n t i l r e c e n t l y , the method of d i s -p o s i t i o n uas by sale to the highest b idder . In June 1973, Counc i l adopted the f o l l o u i n g p o l i c y : " ^ The p o s s i b i l i t y of o f f e r i n g r e s i -d e n t i a l l o t s for lease or purchase at the option of the tenderer ; the lease being made on a prepaid b a s i s . The f o l l o u i n g reasons uere given for the p o l i c y . The only d i f fe rence betueen a sa le and a prepaid lease i s the r igh t to r e v e r s i o n . When an i n d i v i d u a l acquires a piece of land by purchase, he has the opt ion of keeping or s e l l i n g i t . A prepaid lease has the same features but for a given per iod time (99 years in t h i s c a s e ) . Furthermore the m u n i c i p a l i t y did not decide to use t h i s approach to reduce the cost of housing, but did re l y on the e x i s t i n g t i gh t market s i t u a t i o n in the r e g i o n . A l l the advantages remain u i th the s e l l e r (the D i s t r i c t of North Vancouver in t h i s c a s e ) . The m u n i c i p a l i t y ' s f i r s t experience u i t h the prepaid lease approach uas very s u c c e s s f u l . The d i f fe rence betueen a sa le and a prepaid lease for 99 years amounted to approximately $2,DOC per l o t . This small d i f fe rence i s the only reason counc i l agreed to the prepaid lease concept. Houever, such approach impl ies that the amount l o s t today i s less than the present value of the amount that u i l l be received at the exp i rat ion of the l e a s e . The land department did not l i k e d isposing of a permanent asset ( land) to invest in uast ing assets such as road uorks and 67 serv ices u i th l i fespans of only f i f t e e n to fo r ty years . The main question ra i sed was what w i l l happen when such wasting assets w i l l have to be replaced and there i s no more land l e f t to s e l l ? The prepaid lease arrangement w i l l guarantee such f u t u r e . A l te rnat i ves would be taxat ion or the establishment of a s ink ing fund to replace such wasting a s s e t s . The other favorable aspect of a prepaid lease over an ordinary ground lease i s the fact that the munic ipa l i t y does not wish to incur any a d d i t i o n a l expenses by way of admin is t ra t ion , renegot iat ion and defaul t on ground lease payments. The munic ipa l i t y did get the best of both opt ions , i . e . the r igh t of revers ion as a lessor of land and the avoidance of the administ rat ion cost of ground leases by a prepayment clause at the time of a c q u i s i t i o n . The main points in favor of the m u n i c i p a l i t y ' s adoption of such po l i cy have been descr ibed b r i e f l y . In the next sect ion the impl i ca t ions of the po l i cy w i l l be analyzed f u r t h e r . In summary, i t should be restated that the d i s t r i c t i s i n -volved in the land development process for the fo l lowing reasons: a) to f u l f i l l i t s c a p i t a l improvement program; b) to maintain enough land in reserve to achieve f inanc ing required far c a p i t a l improvements; c) to dispose of serv iced l o t s on a prepaid lease bas is and r e t a i n the r igh t of redevelopment at the. exp i rat ion of the ground l e a s e s ; d) to prevent a d d i t i o n a l increase in property taxes. Impl icat ions The m u n i c i p a l i t i e s surveyed undoubtedly used the i r land holdings as a planning t o o l to curb the growth. Their land p o l i c i e s were to re ta in ownership of large undeveloped parcels of land and, ,=n f i n a n c i a l l y poss ib le , acquire a d d i t i o n a l lands for planning •rposes. Uhen development occurred, i t uas mainly a planning c i s i o n . Houever, the main purpose of municipal land development = , and i s present ly , to create a d d i t i o n a l revenues to the munic i -l i t i e s . The housing s i t u a t i o n uas never a key factor in decis ions _; develop land . Counci l p o l i c i e s regarding the amount of land that uld be re leased for r e s i d e n t i a l development uas re la ted to the "aunt of land under municipal ounership. F i n a l l y , municipal land Idings are s t i l l the basis of long term planning o b j e c t i v e s . There no ind i ca t ion of change in the fu tu re . Of the m u n i c i p a l i t i e s sur -yed, the munic ipa l i t y of -North V/ancouver D i s t r i c t i s the only one i l c h produces r e s i d e n t i a l serv iced lo ts on a cont inual b a s i s . Houever, ;= purpose of such a po l i cy i s mainly to f u l f i l l i t s c a p i t a l improve-znt programs. What are the impl i ca t ions of such land a c q u i s i t i o n , holding ~d d i s p o s i t i o n p o l i c i e s ? Land in designated urban areas uhich i s .thheld from the market by any given munic ipa l i t y has a d i rec t impact i the housing s i t u a t i o n . A d d i t i o n a l l y , as the munic ipa l i t y has the :uer to e s t a b l i s h and modify those designated urban areas there i s : other corporat ion or i n d i v i d u a l uhich can compete u i th th i s pouer. The d i s t r i c t m u n i c i p a l i t i e s of Surrey and Burnaby u i thhe ld :nd from the market for planning considerat ions and depending upon • i = i r f i n a n c i a l a b i l i t y , acquired add i t iona l land supposedly to c=rcise a cont ro l over grouth. In r e a l i t y uhat they are doing i s - p l y ouning as much land as pass ib le and obtaining the p r o f i t -, = n such land i s going to be re leased for development. These land =nks resu l t in less land for pr ivate developers. Restra in ing the . - a i l a b i l i t y of land su i tab le for r e s i d e n t i a l development creates a 69 ortage. The D i s t r i c t of North Vancouver does not acquire land on s imi la r basis as e x i s t i n g land holdings are s u f f i c i e n t for the i r ads. The munic ipa l i ty however, keeps a t ight cont ro l on i t s velopment program. No more serv iced lo ts are being of fered than at i s necessary to f u l f i l l the D i s t r i c t ' s f i n a n c i a l needs. F i n a l l y , the m u n i c i p a l i t i e s , by re ta in ing the i r land holdings t h i n designated urban areas, contr ibute d i r e c t l y to the ex i s t ing u s i n g shortage. To emphasize the above comment, i t should be ntioned that the Munic ipa l i t y of Burnaby owns 63% of a l l undeveloped nds su i tab le for r e s i d e n t i a l development within i t s boundaries, far as the Munic ipa l i t y of North Vancouver D i s t r i c t i s concerned, owns 64% of such undeveloped land . Based on t h e i r land p o l i c i e s i d the i r land hold ings, i t i s concluded that they have a d i rec t feet on the e x i s t i n g housing shortage, with regard to the Mun ic i -l i t y of Surrey, such conclusion i s not r i g h t . The Munic ipa l i t y <ns only 2% of the undeveloped land within the designated urban owth areas . The lack of revenues, coupled with a lack of expert ise i the development process, w i l l not enable the munic ipa l i t y to play d i rect ro le in the production of r e s i d e n t i a l bu i ld ings lo t s Appendix E ) . As demonstrated, land d i s p o s i t i o n p o l i c i e s are p r o f i t or •ntral or iented depending upon the type of d i s p o s i t i o n . The option fared by the D i s t r i c t Munic ipa l i t y of North Vancouver i s the perfect ample of a combined p r o f i t and contro l o r i e n t a t i o n . The prepaid sse option approved by the D i s t r i c t of North Vancouver on recent s i d e n t i a l serv iced lo ts i s a d i rec t benef i t derived from the i s t i n g t ight housing market. 70 Houever, in a ground lease option on serv iced r e s i d e n t i a l : j=l l ing s i t e s , there i s aluays a threat uhen leases expi re , that -= p r o v i n c i a l government uauld l e g i s l a t e to protect the l essees . ~ = leases can be extended by statute and the lessees can be given h= r ight to acquire the f reehold for a nominal sum arguing that the repaid amount uas almost equal to a sale p r i c e . In f a c t , problems f such a po l i cy i s of concern in the future for the lessor (North encouver D i s t r i c t in th i s case ) . One point worth mentioning i s hat the munic ipa l i t y did not want to subordinate the ground lease 3 the mortgage. The reason was that the munic ipa l i t y did not want a be faced with forec losure procedures. However, to lessen the r e -uced mortgageabi l i ty of the future buyer, a prepaid lease option or 99 years was dev ised. Such an approach, in f a c t , enables the uyer to obtain f inanc ing at the same terms and condi t ions as a buyer f a f reehold i n t e r e s t . The e f f e c t s are again of a long term nature threat of enfranchisement at the exp i rat ion of the lease by the r o v i n c i a l government). As far as the D i s t r i c t M u n i c i p a l i t i e s of Surrey and Burnaby r= concerned, the i r land d i s p o s i t i o n programs are so marginal that here i s no actua l e f fec t on the ex i s t ing housing s i t u a t i o n . The _ n i c i p a l i t y of Surrey does not own enough undeveloped land su i tab le r r r e s i d e n t i a l purposes while the Munic ipa l i t y of Burnaby i s more nterested in land banking than land development. However, an analys is of the housing s ta r t s in the three j n i c i p a l i t i e s surveyed, does not seem to ind icate that they are estra in ing growth. From 1966 to 1973, those three m u n i c i p a l i t i e s •..proved between 28% and 32% of a l l the housing s t a r t s in the Greater 71 Vancouver Regional D i s t r i c t (Appendix F ) . If ue compare the housing s tar ts in 1973 to the amount of land designated for r e s i d e n t i a l uses in the Greater Vancouver Regional D i s t r i c t , ue can a r r i ve at a 12 d i f fe rent conc lus ion . A recent survey publ ished by the Greater Vancouver Regional D i s t r i c t ind icates that there i s 57,352 acres designated for r e s i d e n t i a l use. Of t h i s amount, 5D13 acres (8%) are located in the D i s t r i c t of Burnaby, 27,979 acres (48%) in the D i s t r i c t of Surrey, and 4,215 acres (7%) in the D i s t r i c t of North Vancouver. In 1973, the D i s t r i c t of Burnaby approved 7% of the housing s tar ts in the GVRD uh i le having 8% of the undeveloped land designated for r e s i d e n t i a l use u i t h i n i t s boundaries. The D i s t r i c t of North Vancouver also approved 7% of the housing s ta r t s uh i le having 7% of the undeveloped land designated for r e s i d e n t i a l use u i t h i n i t s boundaries. Houever, ouning respec t i ve l y 63% and 64% of the e x i s t i n g undeveloped land u i t h i n t h e i r boundaries, they u i l l a f f e c t considerably the housing market i f they maintain the i r ex i s t ing land p o l i c i e s . In the case of the Munic ipa l i t y of Surrey, the s i t u a t i o n i s completely d i f f e r e n t . In 1973, the Munic ipa l i t y approved 16% of the housing s tar ts in the GVRD uh i le having 48% of the undeveloped land designated far r e s i d e n t i a l use u i t h i n i t s boundaries. As the Munic ipa l i t y ouns only 2% of the undeveloped land designated for r e s i d e n t i a l use, the ef fect of i t s land p o l i c i e s are minimal . Other inducements uhich are not relevant to th i s thes is u i l l have to be devised by the Munic ipa l i t y to encourage r e s i d e n t i a l development. In conc lus ion , i t i s re levant to mention that the munic ipa l -i t i e s of Burnaby and of North Vancouver D i s t r i c t as land ouners, can d i rec t l y a f f e c t the housing s i t u a t i o n i f they maintain the i r e x i s t i n g 72 land p o l i c i e s . In the case of the Munic ipa l i t y c f Surrey, i t s land p o l i c i a s u i l l have a minimal e f f e c t unless f i n a n c i a l support from the senior l e v e l s of government can be obtained in the a c q u i s i t i o n of land in the designated urban areas . 73 Footnotes "''K. S . Crawford, Canadian Munic ipal Government, Toronto: Univers i ty of Toronto Press , 1954, p. 48. 2 The Corporation of the D i s t r i c t of Surrey Planning Department "Perspect ives 8 1 " , (Surrey: Surrey Planning Department, 1965), p .78. 3 I b i d . , p. 80. it Surrey Land Use Map, obtained from the Greater Vancouver Regional D i s t r i c t Planning Department (updated by the author, January 1974). 5 Counci l Minutes, December 1968 ( D i s t r i c t of Burnaby). ^Counci l Minutes, June 1970 ( D i s t r i c t of Burnaby). 7 The Corporation of the D i s t r i c t of Burnaby Planning Depart-ment, Munic ipal Land Study, Part 1 - a categor ized inventory , (Burnaby: Burnaby Planning Department, January 1971. Q Burnaby Land Use Map, obtained from the Greater Vancouver Regional D i s t r i c t Planning Department (updated by the author, January 1974). • Counci l Minutes, March 1970 ( D i s t r i c t of Burnaby). "^North Vancouver D i s t r i c t Land Use Map, obtained from the Greater Vancouver Regional D i s t r i c t Planning Department (updated by the author, January 1974). "'""'"Council Minutes, June 1973 ( D i s t r i c t of North Vancouver). 12 I n f i l l study, prepared by Thompson, Pratt and Partners for the Greater Vancouver Regional D i s t r i c t Planning Department, A p r i l 1974. CHAPTER VI THE PROVINCIAL AND FEDERAL ROLE IN THE ACQUISITION, DEVELOPMENT AND DISPOSITION OF LAND FOR RESIDENTIAL PURPOSES Housing matters are always a concern of the senior l eve l s of rrvernment. Their d i rec t p a r t i c i p a t i o n in the a c q u i s i t i o n , develop-m e n t and d i s p o s i t i o n of land for r e s i d e n t i a l purposes w i l l be des-cr ibed in p a r t i c u l a r . In the f i r s t par t , the p r o v i n c i a l powers and p o l i c i e s w i l l be analysed. In the second par t , the federa l powers = -d p o l i c i e s w i l l be reviewed. F i n a l l y , the impl icat ions of such p o l i c i e s w i l l be b r i e f l y summarized. The P r o v i n c i a l Role Housing f a l l s within p r o v i n c i a l j u r i s d i c t i o n as s p e c i f i e d by rha fo l lowing powers granted to the Provinces under sect ion 92 of rha B r i t i s h North America A c t . 1 2. Di rect taxat ion within the province for the r a i s i n g of a revenue for p r o v i n c i a l purposes. 8 . Munic ipal i n s t i t u t i o n s in the prov ince . 10. Local works and under tak ings . . . 11. The incorporat ion of companies with p r o v i n c i a l ob jec ts . 13. Property and c i v i l r i gh ts in the prov ince . 16. General ly a l l matters of a mainly l o c a l or pr ivate nature in the prov ince. In f a c t , the c o n s t i t u t i o n a l powers of the Provinces have no l i m i t a t i o n s , e s p e c i a l l y when deal ing with housing matters . The 74 75 p r o v i n c i a l l e g i s l a t o r s can enact any type of statute uhich becomes lau e n d enforced through Court . (As long as such statutes do not a f fect pouers c o n s t i t u t i o n a l l y granted to the Federal government.) A. Legal Pouers As mentioned above, the P r o v i n c i a l government has the con-s t i t u t i o n a l pouers to enact any type of l e g i s l a t i o n u i th regard to housing. Houever, emphasis u i l l be put on l e g i s l a t i o n deal ing u i th the a c q u i s i t i o n , development and d i s p o s i t i o n of land for housing pur -poses. Under the former S o c i a l Credi t government, one piece of l e g i s -2 l a t ion uas enacted: The Housing Act . It uas simply a piece of l e g i s l a t i o n complementary to the Nat ional Housing Ac t . To emphasize th i s comment, Mr. Nicholson, Min is ter of Housing in the p r o v i n c i a l l eg i s la tu re recent ly s t a t e d : 3 The previous government's lack of i n t e r e s t in housing meant that the Province uas forced to re l y p r a c t i c a l l y exc lus i ve l y on the serv ices of the Centra l Mortgage and Housing Corpor-ation (CMHC). The Act empouered the p r o v i n c i a l government to acqui re , develop and dispose of any type of land for housing purposes on a partnership basis u i th the Federal government. The former government did form a reg iona l housing department in November 1971 in the Greater Vancouver a rea . Its pouers uere l imi ted to the a c q u i s i t i o n of land for pub l i c purposes. Due to the lack of p r o v i n c i a l funding, the department did not acquire much land . To supplement th i s pauc i ty , the department recent ly requested the p rov inc ia l government to amend i t s "Let ters patent" to permit es tab -lishmsnt of a reg iona l non -p ro f i t housing a s s o c i a t i o n . If such pouer i s granted, the neu organizat ion u i l l be empouered to apply fa r federa l funds under the neu sect ion 15.1 of the Nat ional Housing 76 Act.* A l t e r n a t i v e l y , the p r o v i n c i a l government can buy the land and lease i t back at 4% to a non -p ro f i t o rgan i za t ion . In a d d i t i o n , no ground lease payments s ta r t u n t i l the project i s completed and occupied. However, the reg iona l organizat ion u i l l only acquire land far lou income housing p r o j e c t s . In 1973, the government (Neu Democratic Party) enacted the 5 Housing Incentive Fund Act under the cont ro l of the Department of Municipal A f f a i r s . This Act provided a ID m i l l i o n d o l l a r fund a v a i l -able to any munic ipa l i t y in B r i t i s h Columbia for land a c q u i s i t i o n or housing development for the general p u b l i c . U n t i l recent l y , the province did not have any housing agency to carry out land a c q u i s i t i o n for general housing purposes. This uas the main cause of the government's apathy touards housing. As Mr. Nicholson s t a t e d : ^ Incredib ly , the previous government had only one c i v i l servant responsib le for i t s s o c i a l housing programs. To r e c t i f y the s i t u a t i o n , l e g i s l a t i o n creat ing a Department of Housing, u i th pouers of superv i s ing , acqu i r ing , developing, mainta in ing, improving and disposing of housing in the prov ince, uas introduced ** in the l e g i s l a t u r e . This b i l l received Royal Assent on November 2nd, ** * 1973. The minister responsib le has a l l the powers to p a r t i c i p a t e act ive ly in the housing market. F i n a l l y , the enactment of t h i s Act , amended many other Acts deal ing u i th housing in general (Appendix B ) * Any n o n - p r o f i t organizat ion can apply for 100% f i n a n c i n g , uhich cavers land a c q u i s i t i o n and construct ion c o s t s . In a d d i t i o n , 10% of the t o t a l loan i s donated. ** B i l l 49, c reat ing a Department of Housing Act , introduced in the l e g i s l a t u r e (October, 1973). *** Department of Housing Act , chapter 110 of the B r i t i s h Columbia statutes (1973). 77 but uhich are not re levant to t h i s d i s c u s s i o n . U n t i l the enactment of t h i s l e g i s l a t i o n the province had no housing po l i cy re la ted to the a c q u i s i t i o n , development and d i s p o s i t i o n of land for housing purposes. The f i r s t task of the Department uas to es tab l i sh such p o l i c i e s . B. P o l i c i e s Rea l i z ing the growing housing needs in B r i t i s h Columbia, one of the Department object ives uas to put housing on the market. To achieve that ab jec t i ve , dec is ions uere made u i th regard to the type of housing the government should get involved i n , and the locat ion of such housing. The second dec is ion uas re la ted to the land a c q u i s i t i o n program; uhat funds uere provided, hou funds would be a l l o c a t e d , and f i n a l l y who would carry out the land a c q u i s i t i o n . As the government does not want to compete u i th the pr ivate sector in i t s land development programs i t was decided that the government's r e s p o n s i b i l i t y was to provide accommodation to people not usual ly serv iced by the pr ivate sec tor , namely low income people. A lso , ren ta l housing was severely reduced due to changes in the federa l Income Tax Act (income she l te r a l lowance) . To a l l e v i a t e th i s s i t u a t i o n , the p r o v i n c i a l land acqu is i t ion , programs uere or iented tauards these two needs. The gu ide l ines d i rected a c q u i s i t i o n of land that could be brought rap id l y onto the market. To acquire such land , the province r e l i e d an the Regional Housing Department of the Greater Vancouver area. During 1973, the Regional Housing Department contacted a l l the mun ic ipa l i t i es to f i n d out the a v a i l a b i l i t y af su i tab le land within municipal boundaries. The process of land s e l e c t i o n was based 78 •n three main f a c t o r s : the pr ice of land, the proximity of s e r v i c e s , and the p o s s i b i l i t y of rap id presentat ion to the market. The Regional Housing Department optioned many s i t e s but exerc ised the r ight to purchase 61.1 acres at a cost of $5.1 m i l l i o n . The other options were abandoned due to lack of funds. Out of the 746 acres purchased by the p r o v i n c i a l government in 1973, only 61.1 acres uere acquired in tha Greater Vancouver region and aver one -ha l f (approximately 38 acres) uas purchased in the D i s t r i c t Mun ic ipa l i t y of Burnaby. The t h i r d type of dec is ion uas re la ted to the land development program, i . e . do ue serv ice the land and dispose of i t or do ue carry out the complete s e r v i c i n g and construct ion? The p r o v i n c i a l government adopted tuo sets of p o l i c y : f i r s t l y , provis ion of serv iced land tD non -p ro f i t groups and co -operat ive organizat ions , and secondly, to serv ice land and b u i l d housing for people una cannot a f fo rd to buy from the pr ivate s e c t o r . 7 Under the second p o l i c y , the Min is ter s t a t e d : I have determined that the needs of e lde r l y B r i t i s h Columbians should be p r imar i l y met by senior c i t i z e n housing developed by non -p ro f i t sponsors such as churches, serv ice c lubs , and other c i t i z e n groups. It i s preferable that l o c a l people and vo lun -teers be involved in looking a f te r the e lde r l y rather than a large government agency. The government uauld provide the necessary f inanc ing for the con-s t ruct ion and uauld make ava i lab le land uhich the p r o v i n c i a l govern-ment acquired on behalf of those groups. To achieve that purpose, the government u i l l put 10 m i l l i o n d o l l a r s under the E lder l y C i t i zens Housing Act , uhich u i l l be administered by the Department of Housing. With regard to co -operat ive organizat ions , the Min is ter g further s t a t e d : 79 The Department of Housing, nou a c t i v e l y a s s i s t s co-operative housing p r o j e c t s by l e a s i n g land at a ground rent of U%,. of i t s value and p r o v i d i n g bridge f i n a n c i n g . The Department of Housing acquired most of the shares of D u n h i l l Development L t d . to ca r r y out t h e i r housing programs. Reasons f o r such a move were:^ The a l t e r n a t i v e s to. a c q u i r i n g D u n h i l l uere e i t h e r to engage i n a complicated and time consuming task of e s t a b l i s h i n g a large Crown house b u i l d i n g o r g a n i z a t i o n from s c r a t c h , or to continue to r e l y completely on c o n s u l t i n g f i r m s . I s e l e c t e d the f i r s t p r o p o s i t i o n f o r the time being because we must move r a p i d l y to get houses on the market; and to r e l y s o l e l y an c o n s u l t a n t s simply means a l o t of expense with nothing l e f t over i n the way of a r c h i t e c t u r a l design DT engineering c a p a c i t y that can be a p p l i e d to other p r o j e c t s . However, t h i s f i r m w i l l be only one of the housing development arms of the Province. Other arrangements such as tenders and b u i l d e r proposal c a l l s w i l l s t i l l be used. F i n a l l y , the f o u r t h and l a s t type of d e c i s i o n was r e l a t e d to the land d i s p o s i t i o n program, i . e . do we w e l l or lease the land? The Minister•made i t q u i t e c l e a r when he s t a t e d : For the most part the government w i l l lease r a t h e r than d i s -pose of land Dn a fee simple b a s i s , because we b e l i e v e that i t i s proper that f u t u r e f u r t h e r p r i v a t e s p e c u l a t i o n be pro-h i b i t e d and that any w i n d f a l l p r o f i t that occurs from an increase i n land values should be enjoyed by a l l members of the community. However, the i n f o r m a t i o n r e l a t e d to the procedure of g i v i n g out these land leases was not made a v a i l a b l e to the author. F i n a l l y , i t should be pointed out that Mr. Nicholson used the term " f o r the most p a r t " i n h i s speech to comply with a statement made by Mr. Basford.* I f the p r o v i n c i a l government disposes of land through l e a s i n g arrangements o n l y , the Federal government may * Mr. Basford i s M i n i s t e r of State f o r Urban A f f a i r s i n the Federal government. He i s also r e s p o n s i b l e f o r the C e n t r a l Mortgage and Housing Corporation which i s a d m i n i s t e r i n g the N a t i o n a l Housing Act. completely cut o f f i t s f i n a n c i a l support because the Federal p r e f e r -ence i s for a combination of lease and sale arrangements. In summary, the p r o v i n c i a l p o l i c i e s are or iented mainly t o -wards a s p e c i f i c sector of the population uhich i s not adequately serv iced by the pr ivate sec to r . There i s no in tent ion to compete with the pr ivate sector ; on the contrary , there i s a need for both sectors to work towards the same ob jec t i ve : the production of housing uni ts for the population of B r i t i s h Columbia. C. Establishment of a P r o v i n c i a l Land Inventory Following the c reat ion of a p r o v i n c i a l Housing Department, the second step in so lv ing the housing problem was the establishment of a p r o v i n c i a l land inventory . The p r o v i n c i a l cabinet commissioned the Department of Lands, Forests and Water Resources to carry out an inventory of a l l lands owned by any Department or Crown Corporation under p r o v i n c i a l j u r i s d i c t i o n . One of the main purposes was to exer -c ise a better cont ro l over the d i s p o s i t i o n of p r o v i n c i a l lands . However, p r io r to any land d i s p o s i t i o n , the Department of Housing w i l l have f i r s t r e f u s a l , namely the r ight to invest igate i t s p o t e n t i a l for housing purposes. Present ly , no information i s a v a i l a h l e . * However, a survey** was ca r r ied out in 1973 which shows the amount of land owned by the p r o v i n c i a l government in the D i s t r i c t of Surrey, the D i s t r i c t of Burnaby and the D i s t r i c t of North Vancouver. In Surrey, the Province owns 1,862 acres of l and . The major * No information w i l l be re leased u n t i l the Survey i s completed. Comment made by an o f f i c i a l of the Department of Lands, Forests , and Water Resources. **Survey done by the Greater Vancouver Regional D i s t r i c t Planning Department in A p r i l 1973, updated by the author in January 1974. 81 part i s under the reserve estab l ished by the Land Commission.* The remaining part i s outside the designated urban growth areas es tab -l i shed by the m u n i c i p a l i t y . In Burnaby, the province owns 1,652 acres of l and . The undevel -oped part (approximately 365 acres) i s adjacent to Simon Fraser Un i ve rs i t y . Due to the municipal counc i l a t t i t u d e , t h i s land u i l l undoubtedly remain undeveloped. In fac t the s i t u a t i o n i s s i m i l a r to the Endowment Lands uhere the Univers i ty of B r i t i s h Columbia i s s i t u a t e d . In North Vancouver D i s t r i c t , the province ouns 7D7 acres of land (excluding the B l a i r R i f l e Range s i t e purchased under F e d e r a l -P r o v i n c i a l pa r tnersh ip ) . Excluding the lands dedicated to pub l i c use, the remaining lands cannot be developed for housing purposes due to the rough topography. In summary there i s no i n d i c a t i o n that the r e s u l t of the survey car r ied out by the p r o v i n c i a l government u i l l a f f e c t the housing s i t u a t i o n unless the government uses i t s pouers to develop i t s land holdings adjacent to Simon Fraser Un ivers i ty in the munic ipa l i t y of Burnaby. D. Impl icat ions As demonstrated, the p r o v i n c i a l government did not have any po l i cy u n t i l 1973 with regard to land a c q u i s i t i o n for housing purposes. However, the c reat ion of t h i s new housing department and the estab -lishment of a p r o v i n c i a l land inventory w i l l hopeful ly r e l i e v e the housing pressure . The Province i s already committed to the purchase The Land Commission was estab l ished in December 1972 to preserve the a g r i c u l t u r a l land in the Province of B r i t i s h Columbia. 82 land that can be brought rap id l y onto the market. A d d i t i o n a l l y , varnment programs are estab l ished to reach a c lass of people most facted by the housing s i t u a t i o n , namely the low and moderate income s o l e . Uhat are the impl i ca t ions of such p o l i c i e s ? The p r o v i n c i a l i i c i e s u i l l provide housing, but, in the next feu years, the using problem u i l l s t i l l e x i s t . As the cont ro l of land remains t h the m u n i c i p a l i t i e s , no p r o v i n c i a l p o l i c i e s aim.at r e l i e v i n g i s t i n g pressures . If no measures are used to encourage m u n i c i p a l i -as to open up neu urban areas, the government involvement u i l l have minimal impact on the o v e r a l l market. Uhat i s needed i s a f i n a n c i a l po l i cy to encourage the mun ic i -l i t i e s to provide a d d i t i o n a l urban land . A d d i t i o n a l l y , the cost of r v i c i n g should be taken up by the p r o v i n c i a l government. The p r o f i t s s l i z e d in such neu subdiv is ions should be invested in the munic ipa l i t y ich provides such a d d i t i o n a l housing u n i t s . Uhat i s b a s i c a l l y lack ing i s some immediate p o l i c i e s to en -urage the development of neu housing u n i t s . The m u n i c i p a l i t i e s mit grouth due to a lack of f i n a n c i a l a b i l i t y to cope u i th theo i t i a l and l i nge r ing cost of development placed on them. The p r o v i n c i a l vsrnment proposes neu developments uithout regard to municipal needs. The idea of bu i ld ing mul t ip le housing uni ts on Croun land d leas ing t h i s land at subsid ized rates u i l l benef i t a l i m i t e d ~ber of people but u i l l in no uay r e l i e v e the e x i s t i n g housing s i t u a t i o n . uaver,the idea of providing land at subsid ized rates to lou income aple and old age pensioners i s very good indeed. IMo mention uas made in the p r o v i n c i a l p o l i c i e s to provide a i d e n t i a l serv iced due l l ing s i t e s . This type of housing i s l e f t the hands of the pr ivate developer and m u n i c i p a l i t i e s . There i s 83 ind i ca t ion that , in the fu ture , the p r o v i n c i a l government u i l l provide any support for t h i s kind of development. Furthermore, there i s no i n d i c a t i o n that the development of i . - f i l l land* u i t h i n the e x i s t i n g designated urban areas u i l l be pro -- i~t = d. Such u n d e r - u t i l i z e d land i s one of the reasons the mun ic ipa l -i t i e s uant to r e t a i n ounership and/or acquire any future land uhich h i l l be designated urban. As there i s nD j o in t municipal and pro -v i n c i a l agreement in the development of th is type of land , the housing - s r k e t as a uhole i s a f f e c t e d . To summarize, the p r o v i n c i a l p o l i c i e s are aimed at r e l i e v i n g the housing shortage, but the approach in so lv ing these problems i s " t in accordance u i th the municipal p o l i c i e s . M u n i c i p a l i t i e s r e t a i n - e s t of the i r land holding for future planning considerat ions and try PO acquire s t r a t e g i c undeveloped parce ls of land to cont ro l the pace of development u i t h i n the i r boundaries. By r e s t r a i n i n g development of the i r land hold ings , the m u n i c i p a l i t i e s contr ibute to the e x i s t i n g "•using shortage. Conversely, the P r o v i n c i a l government acquires • land uhich can be brought rap id ly onto the market to r e l i e v e the ex i s t ing pausing s i t u a t i o n . As any other developer, the P r o v i n c i a l government needs to get T T L i n i c i p a l approval to proceed u i th any type of development. To grant such approval , m u n i c i p a l i t i e s claim that they need more f i n a n c i a l assistance from the Province to cope u i th the a d d i t i o n a l costs created -7 neu r e s i d e n t i a l developments. If such f i n a n c i a l ass istance i s not prov ided,•munic ipal i t ies have the pouer to refuse any neu development it Land uhich i s already serv iced but uhich i s u n d e r - u t i l i z e d . 84 =v=n one requested by the Prov ince. In view of such d i f f e r e n t p o l i c i e s , i t i s evident that fur ther consultat ions would be required by the two leve ls of government. Delays created by such consul tat ions w i l l undoubtedly a f f e c t the reusing market. In the three m u n i c i p a l i t i e s surveyed, there i s only the Kun ic ipa l i t y of Burnaby who has undeveloped land su i tab le for r e s i -dent ia l development under the ownership of the Prov ince. In 1973, t ie Province bought 38 acres su i tab le for mult ip le r e s i d e n t i a l uni t development. In a d d i t i o n , the Province owns approximately 365 acres adjacent to Simon Eraser Un i ve rs i t y . As the intended po l i cy of the Province i s to put housing on every parce l of land under i t s owner-snip, c o n f l i c t s may ar ise in the implementation of such p r o v i n c i a l pol icy with-the Munic ipa l i t y of Burnaby. In f a c t , the Municipal Counci l claims that no development would occur on the parce l of land adjacent to the Simon Fraser Un i ve rs i t y . Such controversy ac tua l l y exists in regard to the development of the Endowment Lands ( U . B . C . ) . Co the remaining 38 acres , development w i l l occur but intens ive con-su l tat ions w i l l precede such undertaking. To summarize, the e f f e c t of the p r o v i n c i a l government p a r t i -c ipat ion in the housing market w i l l be minimal in the three munic ip -a l i t i e s surveyed. As far as the p o l i c i e s of the Province and T T : _ - i c i p a l i t i e s are concerned, there ex i s t s a c o n f l i c t that can be r e -sr ived by providing a d d i t i o n a l f i n a n c i a l assistance to m u n i c i p a l i t i e s unich w i l l approve a d d i t i o n a l r e s i d e n t i a l development. 85 i*- = Federal Role Housing matters are c o n s t i t u t i o n a l l y the r e s p o n s i b i l i t y of "h= Provinces (B.IM.A. Act , sect ion 92) . However, the Federal govern-ment involved i t s e l f as ear ly as the turn of the century in such nat te rs . To remain within i t s c o n s t i t u t i o n a l powers, the hederal involvement was merely a desire to e s t a b l i s h general s o c i a l p o l i c i e s in the prov inces . Thereaf ter , i t s ro le increased to the point that i t s f i n a n c i a l input i s now e s s e n t i a l to the achievement of any po l i cy dealing with housing matters . Such Federal involvement i s summarized in Appendix C. In the fo l lowing sect ions the ro le of the Federal zavernment in the assembly> development and d i s p o s i t i o n of land for r e s i d e n t i a l purposes ,w i l l be more p a r t i c u l a r l y analysed. A. Background Centra l Mortgage and Housing Corporation i s the Crown corpor -ation charged with car ry ing out Canadian federa l housing l e g i s l a t i o n . "MHC i s responsible to the government through a designated minister end reports to Parliament through the m i n i s t e r . It was incorporated dy an Act of Parliament in 1945. Under t h i s Act , the Nat ional Housing -zi, 1954, subsequent amendments and e a r l i e r Housing Acts , the "crporat lon i s empowered t o : - Insure mortgage loans made by banks, t rus t and loan companies, and other approved lenders on new and ex i s t ing housing; (IMHA, sect ion 15) . - Make mortgage loans to borrowers unable to obtain insured loans from pr ivate lenders on new and e x i s t i n g housing; (IMHA Section 58) . - Make mortgage loans on low- renta l housing pro jects (IMHA Section 15) . - Make loans to u n i v e r s i t i e s , co -operat ive a s s o c i a t i o n s , char i tab le corporat ions , vocat ional and t e c h n i c a l schools , 86 t r a i n i n g h o s p i t a l s , schools for s p e c i a l groups of handi -capped persons, provinces DT the i r agencies, to a s s i s t in provid ing accommodation for res ident students and married students and t h e i r f a m i l i e s : (IMHA Sect ion 42) . - Make loans to prov inces , m u n i c i p a l i t i e s , or municipal sewerage corporat ions to a s s i s t in the construct ion or expansion of sewerage treatment projects for the cont ro l of water and s o i l p o l l u t i o n ; (NHA Section 51) . - Provide insurance to banks on loans made far home improve-ments, and guarantee returns from moderate-rental housing pro jects b u i l t by l i f e insurance companies and pr ivate inves to rs ; (NHA Sect ions 13, 14, 28, 29, 34) . - Buy and s e l l insured mortgage loans , make loans to mortgage lenders , on the secur i t y of mortgages and purchase of the debentures of lending i n s t i t u t i o n s ; (NHA Sect ion 10) (CMHC Act , Sect ion 28) . - A s s i s t provinces and m u n i c i p a l i t i e s to redevelop and r e -h a b i l i t a t e urban renewal areas in accordance with an o f f i c i a l p lan ; (NHA Act , Sect ion 22) . - Make long-term loans tD prov inces , m u n i c i p a l i t i e s or the i r agencies for the construct ion or a c q u i s i t i o n of housing p ro jec ts ; arrange under a F e d e r a l - P r o v i n c i a l partnership agreement to bu i ld ' and operate publ ic housing p ro jec ts ; make loans . to assemble land for r e s i d e n t i a l purposes; and provide grants to a id in meeting l a s s e s ; (NHA Sect ions 40, 42, 43, 44) . - Construct , awn and manage housing pro jects on i t s own account and on behalf of the f e d e r a l government departments and agencies; (NHA Sect ion 55) (CMHC Act , Sect ion 29) . - Encourage the development of better housing and sound community planning and, in carry ing out t h i s r e s p o n s i b i l i t y , to undertake or arrange for studies and research on t e c h -n i c h a l , economic and s o c i a l aspects of housing; (NHA Sect ions 35, 36, 37) . - Encourage creat ion of new communities to r e l i e v e the pressure on the e x i s t i n g urban centers ; (NHA Sect ion 45) . However, t h i s ana lys is w i l l concentrate on the extent of the Federal government in pub l i c land assembly, development and d i s p o s i t i o n comprised in sect ions 40 and 42 (National Housing A c t ) . 87 B. Evolut ion of Federal P a r t i c i p a t i o n From 1949 to 1969, the main federa l ass istance to provinces and m u n i c i p a l i t i e s for the assembly of land uas c a r r i e d out under the cost -p lanning arrangements of sect ion 40 of the Nat ional Housing Act . Under th is s e c t i o n , CMHC had the option to enter into a partnership u i th the provinces on a 75%-25% b a s i s . The redera l government uould provide 75% of the land a c q u i s i t i o n cost and the provinces 25%. Hou-ever, the 25% of the a c q u i s i t i o n cost uould be shared by the province and the munic ipa l i t y (percentage subject to n e g o t i a t i o n ) . The basic procedure to obtain such f i n a n c i a l ass istance uas as f o l l o u s : the request of f i n a n c i a l ass istance for a project and i t s proof of need uas coming from the mun ic ipa l i t y , through the province to the CMHC. In B r i t i s h Columbia, the munic ipa l i t y uas responsible for the a c q u i s i t i o n of the land and the necessary trunk serv ices extension to the s i t e uh i le the CMHC held the r e s p o n s i b i l i t y for p lanning, development and d i s p o s a l . Houever, the extension of such trunk serv ices uere t o t a l l y the expense of the m u n i c i p a l i t y . In add i t ion , the percentage of p r o f i t to the munic ipa l i t y uas only equal to i t s p a r t i c i p a t i o n in the par tnersh ip . Even i f CMHC recognised the use of sect ion"40 as a land banking 12 purpose in A p r i l 1968, the term of 15 years l i m i t e d such u t i l i z a t i o n by the Prov inces . Under th i s s e c t i o n , houever, some 32,000 acres in a l l the provinces uere acquired but only the B l a i r R i f l e Range (640 acres) in North Vancouver D i s t r i c t uas purchased in the Greater Vancouver Region. Three basic reasons uere given for t h i s s i t u a t i o n ; f i r s t l y , the change in procedure, p lanning, development and d isposa l being a p r o v i n c i a l r e s p o n s i b i l i t y . Secondly, the lack of a p r o v i n c i a l 88 housing agency in B r i t i s h Columbia to carry out such work. T h i r d l y , the hidden costs of the m u n i c i p a l i t i e s which were not covered by the partnership agreement, such as o f f - s i t e s e r v i c i n g . In 1964, sec t ion 42 was added to the Nat iona l Housing A c t . This sect ion allowed CMHC to provide loans of up to 90% of the cost at p re fer red i n t e r e s t rate to provinces for the a c q u i s i t i o n and serv i c ing of land , but s p e c i f i c a l l y for p u b l i c housing purposes. In 1SE5, sec t ion 42 was broadened to inc lude the a c q u i s i t i o n and development of land for general purposes. However, the per iod of time _as s p e c i f i e d ( u n t i l March 31, 1972). The loan term, was up to 15 years; only i n t e r e s t s were paid annual ly u n t i l the land was d i s -posed o f . P r i n c i p l e was paid on a p r o - r a t a bas is i f the land was gradual ly disposed o f . Approximately ID,ODD; acres were developed in Canada under t h i s s e c t i o n , but none in the Greater Vancouver a r e a . The main reason mentioned i s the lack of a p r o v i n c i a l agency to promote such f i n a n c i a l a s s i s t a n c e . Another reason i s that only raw land could be acquired under sec t ion 42. Sect ion 42 was r e i n s t a t e d in 1973 amendments to the Nat ional Housing Act with even broader t e r m s . T h e new loan p o l i c y w i l l cover uses i n c i d e n t a l to general housing purposes, namely a complete range of urban uses normally seen in a large sca le development. In a d d i t i o n , the term w i l l be extended to 25 years or 50 years i f the land i s to be disposed of under a leasehold arrangement; the i n t e r e s t payment on the Iran w i l l be deferred u n t i l the land i s disposed o f . However, in order to obtain such a l oan , debentures w i l l have to be issued in the name r f CMHC by the borrowing agency or mun ic ipa l i t y as a secur i t y touaros the l o a n . The bas ic elements of the Federal land p o l i c y have been c l e a r l y 89 enunciated by the Min is t r y of State for Urban A f f a i r s : - Land assembly has been c r i t i c i s e d far making a p r o f i t for the governments invo l ved . For t h i s reason, even where land i s so ld or leased at or near market p r i c e , the governments p a r t i c i p a t i n g should not r e t a i n p r o f i t s but would put them back into the market - at no cost to the • mun ic ipa l i t y - and other ameni t ies . Any remaining p r o f i t a f te r these lands are ass igned, could be appl ied to the c a p i t a l cost of community serv ice b u i l d i n g s . - F i r s t p r i o r i t y in the a l l o c a t i o n of Federal funds w i l l be given to lands that can be brought qu ick ly onto the market. - Land would be made a v a i l a b l e f ree of charge within the pro ject for a reasonable proport ion of p u b l i c housing. - we are prepared to a s s i s t provinces which undertake land assembly, and also to a s s i s t m u n i c i p a l i t i e s who wish to do so and have p r o v i n c i a l approva l . - Ue are prepared to f inance as part of the land assembly cost the i n s t a l l a t i o n of o f f - s i t e connecting trunk s e r v i c e s . C . Ana lys is of the Federal Land Holdings Federa l land ownership in B r i t i s h Columbia amounts to approx-imately 1,276,800 acres (Appendix D). Land i s held by var ious de-partments and Federal Crown agencies , for the f u l f i l l m e n t of t h e i r f u n c t i o n s . However, to r e l a t e such land holdings to the purpose of the a n a l y s i s , a s p e c i f i c study of three m u n i c i p a l i t i e s was c a r r i e d out to determine the p o t e n t i a l i t y of such land holding for r e s i d e n t i a l purposes. In the D i s t r i c t M u n i c i p a l i t y of Surrey, a recent survey* i n -dicated, that the Federal government** owrs approximately 429 a c r e s . Of th i s amount, twelve (12) acres are used by the Post O f f i c e , and * Survey c a r r i e d out by the Greater Vancouver Regional D i s t r i c t Planning Department, updated by the author January 1974. ** It should be painted out that a l l lands or water l o t s owned by the Nat ional Harbours Board are not inc luded in the survey. 90 the Customs Department. Two hundred s i x t y - e i g h t (268) acres are used by the Department of Communications, uh i le the remaining 149 acres are located d i r e c t l y across from the Annacis Is land i n d u s t r i a l estate ; the p o t e n t i a l use i s i n d u s t r i a l . There i s no land uhich i s avai lable for r e s i d e n t i a l uses. In the D i s t r i c t Munic ipa l i t y of Burnaby, the same survey i n -dicated a federa l land ounership of 337 ac res . Of t h i s amount, approximately 200 acres are present ly being disposed o f . The p r o v i n c i a l government i s acqui r ing the "George Derby H o s p i t a l " s i t e (37 acres) and the munic ipa l i t y i s negot iat ing the purchase of the remaining acreage for park purposes. A l l the other parce ls of land (137 acres) are presently used by var ious federa l departments. In the D i s t r i c t Mun ic ipa l i t y of North Vancouver, the same survey ind icated an amount of 1,252 acres under federa l ounership. Excluding the land inaccess ib le for development, and the land adminis-tered by the Department of Indian A f f a i r s and Northern Development on behalf of the Indian people, there i s only 640 acres known as the "B la i r R i f l e Range", which i s acceptable for r e s i d e n t i a l development. Due to municipal po l i cy l i m i t i n g development, approximately one - th i rd of the s i t e uould eventual ly be used for r e s i d e n t i a l purposes. The s i t e uas acquired by the jo in t partnership of the p ro -v i n c i a l government and Centra l Mortgage and Housing Corporation at the request of the munic ipa l i t y uhen i t becomes surplus to the needs of the Department of Nat ional Defence. D iv i s ion of opinion between the partners and the munic ipa l i t y have s t a l l e d development so f a r . It i s evident from the above ana lys is that the ex i s t ing Federal lend holdings w i l l not have a d i rec t e f f e c t in terms of the i r develop-ment p o t e n t i a l . Those lands would eventual ly become obsolete in the i r 91 present uses and the m u n i c i p a l i t i e s uauld acquire them. Houever, none of these s i t e s have a p o t e n t i a l for housing purposes; the i r only p o t e n t i a l i s that of park areas . To summarize, i t i s evident that the Federal land holdings su i tab le for r e s i d e n t i a l development cannot a f f e c t s u b s t a n t i a l l y , the housing s i t u a t i o n . In the three surveyed m u n i c i p a l i t i e s , the only parce l of land su i tab le for r e s i d e n t i a l development i s the " B l a i r R i f l e Range" s i t e . Due to the topography of the North Shore, the D i s t r i c t Munic ipa l i t y of North Vancouver estimates that 214 acres can be economically developed at the present t ime. As the s i t e uas a c -quired by the jo in t partnership of the senior l eve l s of government, ex i s t ing p o l i c i e s for the development are under p r o v i n c i a l j u r i s d i c t i o n . If ue consider the t o t a l pub l ic ounership of land su i tab le for r e s i d e n t i a l development in the D i s t r i c t Munic ipa l i t y of North Vancouver, the impact for the future prov is ion of housing i s tremendous. The combined l e v e l s of government oun 69% of a l l the undeveloped land su i tab le for r e s i d e n t i a l development, D. Impl icat ions Federal p o l i c i e s re la ted to housing matters are e s s e n t i a l l y a f i n a n c i a l support to the p r o v i n c i a l governments, and for m u n i c i p a l i t i e s . There i s no in tent ion uhatsoever from the Fredera l government to make a p r o f i t on any type of r e s i d e n t i a l development. As pointed out e a r l i e r , the Federal government u i l l f a c i l i t a t e the appropr iat ion of federa l funds to accommodate m u n i c i p a l i t i e s in the i r requirements. The purpose of the f i n a n c i a l ass istance i s to increase the a v a i l a b i l i t y of serv iced lo ts u i t h i n any given urban center . Houever, i t i s up to a p r o v i n c i a l agency or more l i k e l y m u n i c i p a l i t i e s to 92 ply for such ass i s tance . As p r o v i n c i a l approval i s required on any quest for federa l funds, there i s an increas ing burden put on the ovinces to co -ord inate and process those a p p l i c a t i o n s . The in tent ion of the Federal government i s to br ing the i r l i c i e s a f f e c t i n g land in to c loser alignment u i th p r o v i n c i a l p r i o r -t ies and p o l i c i e s . This approach, houever, impl ies that p r o v i n c i a l :varnments have such d e f i n i t e p o l i c i e s . It uas demonstrated that i n i c i p a l and p r o v i n c i a l p o l i c i e s are quite d i f f e r e n t . I f the deral ass istance i s to be of any value, i t i s up to the p r o v i n c i a l varnment and the m u n i c i p a l i t i e s to uork more c l o s e l y . The only quirement mentioned by the Min is ter of State far Urban A f f a i r s i s ia ted to the d i s p o s i t i o n of serv iced land ; there should be a corn-nation of sale and leas ing arrangements to encourage people of a l l vels of income to acquire such lands . To achieve such a goa l , .ere should be d e f i n i t e p o l i c i e s estab l ished by the p r o v i n c i a l • varnment. 93 Footnotes '''A. E. Grauer, Housing, "A Study Prepared for the Royal Commission on Dominion-Prov inc ia l R e l a t i o n , " Ottawa, 1939, p. 34. 2 Housing Act , R . S . B . C . , 1960, C. 183 . ' 3 Notes for speech made by Hon. Lome Nicholson, Minister of Housing in the B r i t i s h Columbia L e g i s l a t u r e , on 14th February, 1974, p. 2. 4 Greater Vancouver Regional D i s t r i c t Housing Department, Memorandum to the Board of D i rectors from the Housing Committee, January 23, 1974. 5 Housing Incentive Fund Act , Chap. 41 of the Statutes of B r i t i s h Columbia, 1973. ^Nates for speech made by Hon. Lome Nicholson, Min is ter of Housing in the P r o v i n c i a l Leg is la ture on Feb. 14, 1974, p. 2. 7 Ibid., p. 4. ^ I b i d . , p. 5 . 9 I b i d . , p. 7. I b i d . , p. 3 . i : L N a t i o n a l Housing Act , R . S . C . , 1970, c . N-10. 12 M. Dennis and S . F i s h , Programs in search of a p o l i c y : Low  income housing in Canada, (Toronto: A. M. Hakkert, 1972), p. 319. ^R. Basford , 1973 Nat ional Housing Act Amendments, explanatory nates on a B i l l , Centra l Mortgage and Housing Corporat ion, Jan. 30, 1973, p. 3 . 14 • Notes for speech made by Hon. R. Basford, Min is ter of State for Urban A f f a i r s at the Nat ional T r i - L e v e l conference on Urban A f f a i r s , Edmonton, October, 1973. CHAPTER VII SUMMARY AND CONCLUSIONS A primary preview of the thes i s and the l i m i t a t i o n s and weak--=sses of such a study are given below. This i s fol lowed by a b r i e f e -unc ia t ion of p o l i c i e s and recommendations that are evident to such research . F i n a l l y , i n d i c a t i o n i s given to fu r ther areas of study, based Dn the conclus ions achieved and l i m i t a t i o n s ou t l i ned i n th is study. Summary of the Thesis Perhaps t h i s t h e s i s can best be summarized by an expanded r e i t e r a t i o n of the chapter summaries. In Chapter I I , the t h e o r e t i c a l ana l ys i s of the demand and supply of r e s i d e n t i a l se rv i ced l o t s demonstrates that the standing stock of housing in the market determines the p r i c e l e v e l s of housing. Z~ the increase in supply i s not adequate to meet the demand in any r iven per iod o f - t i m e , t h i s w i l l r e s u l t i n a d i rec t increase in the pr ice of the standing stock of housing. This conclus ion re fu tes the argument put forward by many r e a l estate organizat ions which s tates that the add i t ions to the housing errck determines the p r i ce of e x i s t i n g housing. Whatever the pr ice z' undeveloped land i s , i t w i l l have no d i r e c t e f f e c t on the f i n a l - = j housing u n i t . I f a developer cannot purchase and develop un-reveloped land For housing purposes tD comply with the pr ice set by 9'. 95 the ex is t ing standing stock, he u i l l not b u i l d . Such bui lder developer can, houever, u i thho ld serv iced land from the market i f such pr ice i s increasing very r a p i d l y . As the holding costs are very expensive, such act ion i s of very short term. In Chapter III, the analys is of supply and demand for housing in Metropol i tan Vancouver demonstrates that a considerable number of peopla cannot a f fo rd to purchase a s ing le family due l l i ng due to the excessive pr ice of such type of accommodation. Houever, i t uas demonstrated that the demand for that type of housing uas very strong and u i l l maintain i t s l e v e l in the future despite the high c o s t . In Chapter IV,the ana lys is of the s t a t i c and dynamic develop-ment process demonstrated the main fac tors responsible for the shortage of supply of r e s i d e n t i a l serv iced l o t s . In b r i e f , i t should be pointed out that the expectation of the ouners of undeveloped land in designated urban areas are so high that assembly for development i s very d i f f i c u l t to achieve . Secondly, the municipal approval procedure for land subd iv i s ion i s so consuming that pro jects encounter delays uhich reduce supply of serv iced land for the market. F i n a l l y , the type of requirements demanded by m u n i c i p a l i t i e s reduces the quantity of r e s i d e n t i a l l o t s for a given area . In summary, i t should be pointed out that the supply of r e s i -dent ia l serv iced l o t s cannot meet the e x i s t i n g demand. Such con-c lus ion proves the f i r s t hypothesis uhich uas: there i s a shortage of r e s i d e n t i a l serv iced l o t s in Metropol i tan Vancouver. In Chapter V, the ana lys is shous that m u n i c i p a l i t i e s have the pauers and the land holdings to play an act ive ro le in the prov is ion of r e s i d e n t i a l serv iced l o t s . Houever, in the three m u n i c i p a l i t i e s studied i t uas demonstrated that the i r p o l i c i e s are not intended to reduce such a shortage. The three m u n i c i p a l i t i e s do use the i r land holdings for future planning cons iderat ions . Houever, uhen they supply such serv iced l o t s , i t i s in a very l imi ted fashion based on the i r f i n a n c i a l needs. In Chapter VI, the analys is ind icates that u n t i l recent ly the P r o v i n c i a l government did not have any housing p o l i c i e s . The neu p o l i c i e s ind icate that d i f f e r e n t types of accommodation such as mult ip le family d u e l l i n g s , u i l l receive s p e c i a l government s u b s i d i e s . There i s no ind icat ion , that r e s i d e n t i a l serv iced l o t s u i l l be p ro -vided by the p r o v i n c i a l government. As far as the Federal government i s concerned, i t i s hoped that the f i n a n c i a l a id provided for the m u n i c i p a l i t i e s u i l l be used. Houever, the P r o v i n c i a l government, as the coordinator of such federa l funds, u i l l need an agency u i l l i n g to r e d i s t r i b u t e such funds. As i t stands nou, no i n d i c a t i o n of such r e d i s t r i b u t i o n to m u n i c i p a l i t i e s i s ev ident . In summary, i t should be emphasized that the ro le of the publ ic sector in the development process of r e s i d e n t i a l serv iced lo ts i s ev ident . Houever, the d i f f e r e n t p o l i c i e s of the three leve l s of government ind icated that they contr ibuted to the e x i s t i n g shortage of serv iced land for r e s i d e n t i a l purposes. This conclusion ind icates that the hypothesis uhich re fe r red to the d i f f e r e n t p o l i c i e s of the three leve ls of government as a cause of the e x i s t i n g shortage of r e s i d e n t i a l serv iced l o t s , i s v e r i f i e d . L imitat ions and Weaknesses The basic l i m i t a t i o n of the thes is i s that i t i s r e s t r i c t e d to the analys is of one ro le of the publ ic sector in reducing the ex i s t ing shortage of r e s i d e n t i a l serv iced l o t s . IMo considerat ion i s 97 given to the other powers that the m u n i c i p a l i t i e s can exerc ise ; pr imar i l y those of regu lat ing the subd iv is ion of land and of taxa t ion . Those powers have a great inf luence on the form and the shape of urban growth. The f i r s t hypothesis deals with one type of accommodation: s ing le dwel l ings . However, there are other types of accommodation that can reduce the shortage Df housing uni ts which are more e f f i c i e n t in any growing urban center . The ana lys is of only one type of housing unit does not r e f l e c t the o v e r a l l need of any growing populat ion . In a metropol itan area such as Vancouver, t h i s type of she l te r i s be -coming less des i rable due to the amount of land and se rv i c ing r e q u i r e d . To ar r i ve at a much more accurate r e l a t i o n s h i p between the needs of the population (demand) and the d i f f e r e n t types of she l te r o f fered in the market (supply) , a more deta i led analys is should be undertaken to r e f l e c t such a choice and reasons for such a cho ice . The second hypothesis deal ing with the ro le of the pub l ic sector in the development process of housing uni ts should be extended to a l l forms of f i n a n c i a l a id ava i lab le to pr ivate and pub l ic developers to f u l f i l l the goal of provid ing housing accommodation to a l l types of income l e v e l s . Such ana lys is would more accurately r e f l e c t the ro le played by the senior l e v e l s of government. As i t was e a r l i e r concluded, p o l i c i e s re la ted to the assembly, development and d i s p o s i t i o n of publ ic lands far housing purposes, do not r e f l e c t the same ob jec t i ves ; the main.reason being that they do not want to provide the same type of housing to solve the e x i s t i n g shortage. To complete such a study, an analys is of a l l those ob jec -t i ves should be undertaken. 98 F i n a l l y , i t should be pointed out that th i s study c l e a r l y ind icates the complexity of such a problem: the prov is ion of serv iced land to accommodate a l l types of urban s t r u c t u r e s . Po l icy Recommendations The underly ing purpose of t h i s project uas of a tuofo ld nature . F i r s t , there uas a desire to demonstrate the shortage of supply of r e s i d e n t i a l serv iced l o t s and to ind icate the reasons for such shortage. This study demonstrates c l e a r l y such f a c t s . Secondly, uas a desire to ind icate the d i f f e r e n t p o l i c i e s of the three l e v e l s of government as one cause of such shortage. Conclusions ar r i ved at uauld support such f i n d i n g s . Based on the reasons for the d i f f e r e n t p o l i c i e s , a b r i e f enunciation of p o l i c i e s that can be devised u i l l hopeful ly consol idate such d i f f e r e n c e s . The Greater Vancouver Regional D i s t r i c t should e s t a b l i s h a "share of grouth" concept re la ted to the grouing demand for r e s i d e n t i a l serv iced l o t s . Such concept should receive f u l l acceptance by a l l the m u n i c i p a l i t i e s . If such acceptance i s not reached, reasons should be given by the munic ipa l i t y concerned. Houever, i t i s l e f t e n t i r e l y to the D i s t r i c t , a f te r having f i r s t consulted, u i th the m u n i c i p a l i t i e s , to f i n a l i s e such a concept. To induce the m u n i c i p a l i t i e s to develop the i r land hold ings , the f i n a n c i a l ass istance of the senior l e v e l s of government could be based an such concept. If any given mun ic ipa l -i t y has to provide a ce r ta in percentage of the grouth in one year, the senior l eve l s of government could provide f i n a n c i a l a id to equal the cost of providing land and s e r v i c i n g . Furthermore a l l the adminis -t r a t i o n costs incurred during the project can be claimed by the mun ic ipa l i t y . 99 Houever, such approach does not cover the a d d i t i o n a l costs of providing u t i l i t i e s such as parks and schools for the m u n i c i p a l i t y . To provide for those a d d i t i o n a l cos ts , the senior l e v e l s of govern-ment should be prepared to re invest a l l the p r o f i t s r e a l i z e d in such a venture in the munic ipa l i t y uhere the housing project i s undertaken. Such approach impl ies that a l l the r e s i d e n t i a l serv iced lo ts u i l l be so ld at market va lue . If the senior l e v e l s of government intend to dispose of the lo t s in any other uay, they should buy such l o t s at market value from the m u n i c i p a l i t i e s . This approach ind icates c l e a r l y that any in tent ion of the senior l eve l s of government to subsid ize future buyers u i l l not be made at the expense of the m u n i c i p a l i t i e s . F i n a l l y , th i s often c l e a r l y ind icates that the leas ing of r e s i d e n t i a l serv iced l o t s i s not favored. If the annual ground lease payment i s not subs id ized in one uay or another, there i s no immediate or future benef i t for the purchaser. A d d i t i o n a l l y , such an option creates administ rat ive and future l e g a l problems to the lessor (one l e v e l of government) that u i l l outueigh poss ib le future advantages. Impl icat ions for Further Study There are tuo obvious areas for fur ther research and study. Both are suggested by the sect ion in th i s chapter d iscuss ing " l i m i t a t i o n s and ueaknesses." F i r s t , the ro le of the m u n i c i p a l i t i e s in the develop-ment process should be r e l a t e d to the i r pouer of regu lat ing land sub-d i v i s i o n and land t a x a t i o n . In Chapter IV, the analys is of the const ra ints of the supply of r e s i d e n t i a l serv iced l o t s ind icates that the d isc re t ionary pouers of the m u n i c i p a l i t i e s to designate any given area.as urban use d i r e c t l y 100 af fec t the process of the supply of land for housing purposes. The a v a i l a b i l i t y of municipal lands u i t h i n those designated urban areas i s only an a d d i t i o n a l cont ro l in the hands of the m u n i c i p a l i t i e s . A d d i t i o n a l l y , the ro le of the senior l e v e l s of government i s l im i ted to i t s d i rec t p a r t i c i p a t i o n in the r e s i d e n t i a l development process . Other government programs uhich i n d i r e c t l y a f f e c t such process ex is t but they are not discussed in th i s study. Houever, i t should be pointed out that any study per ta in ing to housing matters in an urban center i s an extremely complex matter. F i n a l l y , i t should be emphasized that a d i rec t p a r t i c i p a t i o n of the publ ic sector i s becoming an ever increas ing fac tor that should not be over looked. In that respect , t h i s thes is i s only a beginning in the study of the pub l ic sector involvement in the r e s i d e n t i a l development process . BIBLIOGRAPHY A. Books Crawford, Kelv in S . Canadian Munic ipal Government. Toronto: Univers i ty of Toronto Press 1954. Samuelson, Paul A. Economics: An Introductory A n a l y s i s . Toronto: McGraw-Hil l Company of Canada L t d . 1966. Dennis, Michael and F i s h , Susan. Programs in Search of a P o l i c y . Toronto: Hakkert Press , 1972. B. P e r i o d i c a l s Lee, T. H. The Stock Demand E l a s t i c i t i e s of IMon Farm Housing. The Review of Economics and S t a t i s t i c s 46. 1964. Oksanen, E. Housing Demand in Canada, 1947-1962: Some Prel iminary Experimentation. Canadian Journal of Economics and Science 32. 1966. Reid , M. G. C a p i t a l Formation in Res ident ia l Real E s t a t e . Journal  of P o l i t i c a l Economy 66. 1958. Uhler , R. A. The Demand for Housing and Inverse P r o b a b i l i t y Approach. The Review of Economics and S t a t i s t i c s 50. 1968. C. Unpublished Mater ia l DerkDwski, Andre. Res ident ia l Land Development in Ontar io . Urban Development Ins t i tu te of Ontar io . 1972. Gerecke, Kent and Ideisman, Brahm. Evolut ion and Pract i ce of Canadian  Urban Planning. (U .B .C . - School of Community and Regional Planning 1972). ( C o l l . Reader - Planning 425). Goldberg, Michae l . R e s i d e n t i a l Developer Behavior: Some Empi r ica l F ind ings . Faculty of Commerce and Business Admin is t ra t ion , U .B.C. Vancouver, 1972. Hamilton, S . kl. Publ ic Land Banking - Real or I l l us ionary B e n e f i t s . Report of the Urban Development Inst i tute of Ontar io , 1974. Moore, R.A. Development P o t e n t i a l Model for the Vancouver Metro-po l i tan Area. Unpublished Master 's of Business Administrat ion t h e s i s . U . B . C : Vancouver, 1972. 102 P r i c e , E. V. The House Bu i ld ing Industry in Vancouver. Unpublished Master 's of Business Administrat ion t h e s i s . U .B.C. Vancouver, 1970. D. Government Pub l icat ions Federal Basford, R. 1973 Nat ional Housing Act Amendments: Explanatory Notes  on a B i l l . CMHC. 1973. Basford R. Notes for Speech at the Nat ional T r i - l e v e l Conference  on Urban A f f a i r s . CMHC. Edmonton 1973. Canadian Housing S t a t i s t i c s . CMHC. 1971-72=73. Grauer, A . E . Housing: A Study Prepared for the Royal Commission on  Dominion-Prov inc ia l Re la t ions . Ottaua 1939. Plunkett , T .V . The F i n a n c i a l Structure and Decision-Making Process  of the Canadian Munic ipal Government. Ottaua: CMHC 1972. Population Project ions for Canada. S t a t i s t i c s Canada. P r o v i n c i a l Nicholson, L. Notes for Speech in the B r i t i s h Columbia L e g i s l a t u r e . February 1974. Regional D i s t r i c t Land Use Maps (Surrey, North Vancouver D i s t r i c t , Burnaby). Prepared the Greater Vancouver Regional D i s t r i c t Planning Department 1973. The Housing Issue. Prepared by the Greater Vancouver Regional D i s t r i c t Planning Department, Vancouver, 1973. The Housing Issue: A Discussion Paper. Prepared by the Greater Vancouver Regional D i s t r i c t Planning Department, Vancouver, 1974. Population Forecast . Prepared by the Greater Vancouver Regional D i s t r i c t , 1973. Population Trends in Louer Mainland 1921-1986;. Prepared by the Louer Mainland Regional Planning Board, 1968. Municipal The Corporation of the D i s t r i c t of Surrey Planning Department. Perspect ives 81. Surrey: Surrey Planning Department, 1965. The Corporation of the D i s t r i c t of Burnaby Planning Department. Munic ipal Land Study, Part I - A Categorized Inventory. Burnaby: Burnaby Planning Department, 1971. E. Statutes Revised Statutes of Canada: 197C C. n-10 Nat ional Housing Act . Revised Statutes of B r i t i s h Columbia: I960 c.255 Munic ipal Act I960 c.183 Housing Act 1973 c.kl Housing Incentive Fund Act 1973 c . l l B Department of Housing Act F. Personal Interviews Corporation of the D i s t r i c t of Surrey. Personal interviews with Mr. R. Je f fe rson and Mr. G. Halsey -Brandt . Corporation of the D i s t r i c t of Burnaby. Personal interviews with Mr. Jack Belhouse and Mr. E. G r i s t . Corporation of the D i s t r i c t of North Vancouver. Personal interview with Mr. G. A. Wi l l iams . Central Mortgage and Housing Corporat ion . Personal interviews with Mr. R. Burns and Mr. L. Tye. Greater Vancouver Regional D i s t r i c t . Personal interview with Mr. F. Wyles. APPENDIX A ID 5 APPENDIX A Res ident ia l Lets Sold by the Munic ipa l i t y of North Vancouver D i s t r i c t Standard Substandard Pr ivate M u l t i - f a m i l y 1967 4D 3 46 5 1968 114 1 83 1 1969 91 1 71 -197D 123 3 35 3 1971 128 2 113 1 1972 146 - - 3 1973 184 (sold) 49 ( leased) N.B. Standard lo t s have 60 or 70 foot frontage Substandard lo t s have 33 foot frontage Pr ivate l o t s have - the o n - s i t e se rv i c ing ca r r i ed Dut by developer - the o f f - s i t e se rv i c ing paid by developer . but ca r r ied out by m u n i c i p a l i t y . Source: The D i s t r i c t Mun ic ipa l i t y of North Vancouver (Land Department) APPENDIX B 107 APPENDIX B The Department of Housing Act E f f e c t s The Department of Housing Act , uhen introduced, had the fo l lowing e f f e c t s : 1. Repealed - Housing Incentive Fund Act , c .41 of the Statutes of B r i t i s h Columbia, 1973. 2. Amended - Housing Act , R . S . B . C . 1960, c . 183 E lder l y C i t i z e n Renters Grant Act , c .18 of the Statutes of B r i t i s h Columbia, 1973 - E lder l y C i t i z e n s ' Housing Aid Act , R . S . B . C . 1960, c . 125 P r o v i n c i a l Home Acqu is i t i on Act , c . 39 of the Statutes of B r i t i s h Columbia, 1967. - P r o v i n c i a l Home-Owner Grant Act , R . S . B . C . 1960, c.308 Univers i ty Endowment Lands Administrat ion Act , R . S . B . C . 1960, c . 396. Source: Department of Housing Act , c.110 of the Statutes of B r i t i s h Columbia, 1973. A P P E N D I X C 109 APPENDIX C Canadian Housing Po l icy - A Chronology 1867 B.N.A. Act (Sect . 92) es tab l i shes p r o v i n c i a l j u r i s d i c t i o n for housing 1912 Commission of Conservation es tab l i shed , r e l a t e s disease and poor health to bad housing 1918 LJar Veterans Housing Act 1930 P r o v i n c i a l Acts permit moratorium on mortgage payments 1935 Dominion Housing Act (part of economic s t a b i l i z a t i o n p o l i c i e s ) funds for second mortgages 1938 Nat ional Housing Act - funds for mortgages 1939 Wartime Housing Limited 1941 Rent Controls 1942 Veterans Land Act 1944 Farm Improvement Loan Act 1944 Cur t i s Report 1945 Nat ional Housing Act and Centra l Mortgage and Housing Corporation - j o i n t loans 1948 Rental Insurance 1949 Land assembly on f e d e r a l / p r o v i n c i a l partnership basis 1953 Insured loans 1956 Urban renewal studies f inances ; 75%-25% sharing for publ ic housing I960 Student housing, sewage p lan ts , trunk sewer l i n e s 1964 Publ ic housing 90%-10% b a s i s ; urban renewal 75%-25% basis 1966 Loans on e x i s t i n g housing 1967 C.M.H.C. i n te res t rate f l o a t s 11D 1969 Hel lyer Task Farce 197D Min ist ry af Urban A f f a i r s ; L i t u i c k Report and events preceding 1971 Innovative housing 1972 Neighbourhood Improvement Programs; Land banks 1973 IMeu communities program Source: School of Community and Regional Planning, Univers i ty of B r i t i s h Columbia, 1973. APPENDIX D APPENDIX D Federal Land Holdings in B. C. Province of B r i t i s h Columbia Department Acreages Croun-ouned Leased Agr icu l ture 5,050.4 21.9 Customs and Excise 55.1 7.9 C • B • C • 130.2 22.5 C.M.H. 1.2 -COM - 12.1 DND 117,137.7 7,416.6 DOE 1,138.1 2,127.9 DOT 35,849.6 2,368.2 DPld 599.2 1,408.4 DMA - 271.0 -EMR 629.9 -IAN 1,100,920.7 50.2 NHB 8,849.6 -NHU 11.4 3.6 NRC 5,519.0 -PEN 558.3 -POU .8 RCM 77.7 16.3 Tota l 1,276,799.9 13,455.9 APPENDIX E 114 APPENDIX E Undeveloped Lands Ava i lab le for Res ident ia l Uses Munic ipal P r o v i n c i a l Federal Others To ta l Acres % Acres % Acres a' Acres % Acres Burnaby 3,164 63 38 .8 - - 1,811 35.2 5,013 Surrey 653 2 - - - - 27,326 98 27,979 North Vancouver D i s t r i c t 2,720 64 - - 214' 5 1,281 31 4,215 Source: I n f i l l study prepared by Thompson, Beruick, Pratt and Partners for the Greater Vancouver Regional D i s t r i c t , A p r i l 1974. (Munic ipal , P r o v i n c i a l and Federal land ownership prepared by the author) APPENDIX F APIOIUIX r Duel l ing Star ts in Metropol itan Vancouver 1966 - 1973 1966 1967 1968 1969 1970 1971 1972 1973 Star ts % Star ts % Star ts % Starts % Starts 3 % Starts % Star ts % Start^ % Burnaby 417 9 523 8 558 9 498 9 330 6 ' 596 10 496 8 544 7 Surrey 644 14 S29 13 870 15. ; 729 14 738 15 859 15 1,070 17 1,158 16 North Vancouver D i s t r i c t 355 7 443 7 447 7 401 7 381 7 503 8 402 6 521 7 Others 3,049 70 4,533 72 3,783 69 3,737 70 3,383 72 3,722 67 4,055 69 4,865 70 Tota l 4,465 100 6,328 100 5,658 100 5,165 100 4,832 100 5,680 100 6,023 100 7,088 100 *Duell ing s t a r t s mean Single detached, semi-detached and duplex Source: Centra l Mortgage and Housing Corporat ion, Annual S t a t i s t i c s 1966-1973. r - 1 m 

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