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An examination of the land inventories of major private sector residential developers in Metropolitan… Winspear, John Bryan 1974

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AIM EXAMINATION OF THE LAND INVENTORIES OF MAJOR PRIVATE SECTOR RESIDENTIAL DEVELOPERS IN METROPOLITAN VANCOUVER  by JOHN BRYAN UINSPEAR B.A., U n i v e r s i t y o f B.C. 1960 B.Ed., U n i v e r s i t y o f C a l g a r y 1969  A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE IN BUSINESS  ADMINISTRATION  i n the Department •f Commerce and B u s i n e s s  Administration  Ue accept t h i s t h e s i s as conforming t o t h e reauired  standard  THE UNIVERSITY OF BRITISH COLUMBIA APRIL, 197^  In presenting this thesis in p a r t i a l f u l f i l l m e n t of the requirements far an advanced degree at the University of B r i t i s h Columbia, I agree that the l i b r a r y s h a l l make i t freely available for reference and study.  I further agree that permission  tensive copying of this thesis for scholarly purposes may by the head of my department or his representatives.  far exbe granted  It i s under-  stood that copying or publication of this thesis for f i n a n c i a l gain B h a l l not be allowed without my written  permission.  Department of Commerce and Business Administration The University of B r i t i s h Columbia Vancouver 6, Canada.  i  ABSTRACT  The focus of t h i s d e n t i a l developers inventories  i s on the r a l e of the major  resi-  i n the Vancouver region i n terms of the rau land  presently  held and the d i f f i c u l t i e s  to these land i n v e n t o r i e s i s to determine whether provide  study  encountered i n adding  to r e p l e n i s h land s u p p l y .  the major p r i v a t e  substantial r e l i e f  sector  The  objective  developers can  from the present d u e l l i n g u n i t  supply/  demand imbalance. Information  on the land holdings of t u e l v e  uas c o l l e c t e d through the r e l a t i v e  the use of a q u e s t i o n n a i r e .  developers  Information  as to  s i z e s of urban a r e a s , sewer a r e a s , seuer catchment a r e a s ,  development a r e a s , and the p a r c e l s u i t h i n c o l l a t e d from planning r e p o r t s , the data r e v e a l s t h a t p r i v a t e land i n v e n t o r i e s out that  major  maps, and t a b u l a t i o n .  s e c t o r developers  i n the Vancouver r e g i o n .  the i n v e n t o r i e s  the development a r e a s , uas Analysis  do not have  Further  analysis  of  extensive points  are i n most c a s e s , h e l d f o r immediate  development. Evidence shous that s p l i n t e r e d land ounership p a t t e r n s  and  small p a r c e l s i z e s are i n s t r u m e n t a l i n reducing rau land i n v e n t o r y sizes. sizes,  Furthermore,  evidence shous the combination of s m a l l p a r c e l  assembly d i f f i c u l t i e s  and the d i r e c t i o n  of development  toward  s p e c i f i c development areas by m u n i c i p a l i t i e s s h a r p l y reduces the p o t e n t i a l numbers of r e s i d e n t i a l  duelling  units.  TABLE OF CONTENTS Chapter I  •:  •  INTRODUCTION....  Page ............  1  The Problem Objectives of Thesis Structure of Thesis Scope and Methodology J..... J... Data Gathering Techniques......... Limitations of the Questionnaire Approach Limitations i n Gathering Data from Maps and.Municipal Planning Reports............. Hypotheses.......... : :  II  SUPPLY AND DEMAND FOR HOUSING - THEORETICAL ANALYSIS... Summary of Supply E f f e c t of Surplus E f f e c t of Surplus Housing Units  III  r. XV  and Demand Demand on Land P r i c i n g . . . . . . Demand on the Supply of to the Market.....  SUPPLY AND DEMAND FOR HOUSING IN METROPOLITAN VANCOUVER  VI  9 10 . 12 15 17  ;  21  . . 25  Demand for Housing as a Function of Income.... Demand for Housing as a Function of Population.. . THE SUPPLY OF SERVICED RESIDENTIAL DWELLING SITES AN EXAMINATION OF THE FACTORS DETERMINING QUANTITATIVE EXPECTATIONS OF INCREMENTS TO EXISTING HOUSING STOCK THROUGH THE DEVELOPMENT OF SERVICED RESIDENTIAL DUELLING SITES S t a t i c Analysis of the Residential Duelling Unit Supply Process .Dynamic Analysis of the Residential Unit Supply Process.  V  1 . k '-.5' -• 7 7 9  26 30  k3 k3 50  ROLE OF PUBLIC COMPANIES IN CANADIAN RESIDENTIAL DEVELOPMENT  57  EVALUATION OF LAND INVENTORIES HELD IN THE GREATER VANCOUVER REGIONAL DISTRICT AND LOWER FRASER VALLEY BY MAJOR PRIVATE SECTOR DEVELOPERS. EXAMINATION OF THE EMPIRICAL RESULTS OF THE QUESTIONNAIRE '  62  Total Acreage Held by Developers f o r the Provision of Residential Duelling Units....  62  iii  Chapter  Page . Number and Size of Non-Adjoining Parcels held by Developers i n Inventory  VII  Geographical D i s t r i b u t i o n  65  Developers' Explanations as'to Why Land Held, i n Inventory uias not Being Serviced and/or Residential Construction was not Under Uay at the Time of the Study  67  Most Probable Uses f o r Land Inventory Held...  69  Estimated Time Before Subdivision Servicing and/or Residential Unit Construction to Begin  70  Developers' Responses Relating to 'Most Valuable Parcels' i n Their Individual Inventories with Respect to the Provision of Residential Dwelling Units  73  STATIC ANALYSIS OF TWO VANCOUVER REGION MUNICIPALITIES IN TERMS OF THE POTENTIAL SUPPLY OF RESIDENTIAL DUELLING UNITS Relative Importance of Surrey and Maple Ridge in the.Supply of Dwelling Units i n the Greater Vancouver Region  VIII  63  79  . 7 9  S t a t i c Analysis of the Residential Dwelling Site Potential i n Surrey  80  S t a t i c Analysis of the Residential Dwelling Site Potential i n Maple Ridge  88  Subdivision Approval Policy After E s t a b l i s h ment of Development-Area 1 - Maple Ridge.. .  89  CONCLUSIONS...... Areas f o r Further Research  BIBLIOGRAPHY APPENDIX.......................  93 95 98 100  LIST OF TABLES Table 1 2  Page Existing Duelling Stock Price Rises Through Time  18  Effect of Leverage on Residential Duelling Site Prices......  3  Effect of Leverage on Rau Land Prices..  4 5  Negative Leverage The Price of Homes i n Metropolitan Vancouver Relative to Average Income of Industrial Workers i n B.C. 1963-1973  6 7 8  9 10 11  12  13 14 15  19 20 .  21 27  Household Formation and Duelling Unit Starts in Metropolitan Vancouver 1961-1976  33  Residential Building A c t i v i t y - Duelling Starts i n Metropolitan Vancouver 1967-1973  34  Residential Building A c t i v i t y - Single Family Duelling Starts i n Metropolitan Vancouver 1967-1973  35  Residential Building A c t i v i t y - Multiple Duelling Starts - Metropolitan Vancouver 1967-1973  36  Cost of Construction of Single Family Duellings i n Metropolitan Vancouver 196Q-1973...  39  Average Cast of a Typical Serviced Lot i n the Greater Vancouver Regional D i s t r i c t 1964-1973  40  The Cost of Housing i n the Greater Vancouver Regional D i s t r i c t i n Terms of Building Costs and Serviced Land Prices 1964-1973  41  Annual Equity Financing by Public Real Estate Companies 1960-1973 ....  58  Total Acreage and Average Parcel Size of Inventory Held by Responding Developers  62  Rau Land Inventories i n Acreages for Representative Major Public Companies i n Selected Urban Areas of Canada - Based-on 1972 Annual Reports of Reporting Companies  x  64  Table 16  .17  18  19  Page Geographical Distribution of Land Holdings Throughout Greater Vancouver and Louer Fraser Valley. Aggregate Figures for a l l Twelve Companies Reporting - A l l Uses, including- Residential.  66  Most Important Single Reason Why Inventory not Being Serviced and/or Residential Construction i n Progress now. Reasons as Selected by Developers Surveyed  68  Developers' Expectations as to Most Probable Uses far Their Land Inventories - Aggregate Figures for a l l Twelve Developers Reporting.. •  70  Developers' Expectations as to time before SubDivision and/or Residential Unit Construction to Begin on Lands Held i n Inventories Aggregate Figures for a l l Twelve Developers Reporting  20 21 22  '  72  Estimated Year of Development - "Most Valuable' Parcels as Selected by Developers  75  Year of Acquisition - 'Most Valuable as Selected by Developers.....  75  1  Parcels  Most Important Single Reason Why Parcel not Being Serviced and/or Residential Construction in Progress now for 'Most Valuable' Parcels. Reasons Selected by Developers Surveyed.......  77  Average Farm Size i n Areas Adjacent to Metropolitan Census Areas  78  Area and Population of Municipalities i n Metropolitan Vancouver  81  25  Surrey Sewer Drainage Basins - Acreages Contained.  83  26  Remaining Undeveloped Acreage i n Residential Zones - Surrey Urban Growth Areas.  85  23 2k  27  Net Developable Acreage Compared to Gross Area - Surrey  28 -..  .  •••  Parcel Size by Size Category for Remaining Undeve-. loped Acreage i n Residential Zones - Surrey Urban Growth Areas  06  87  Parcel Size by Size,Category for Remaining Undeveloped Acreage i n Residential Zones - Maple Ridge Development ... Area 1................................  V I X  LIST OF FIGURES Figure 1  Page Interactions of Supply and Demand for the Housing Stock .  16  2  F e r t i l i t y Rates....  30  3  Diagram of S t a t i c Analysis of Residential Duelling Unit Supply Process  k  Diagram of Dynamic Analysis of Residential Duelling Unit Supply Process  Map 1  '  .  Comprehensive Map of Surrey  2  . Comprehensive Map of Maple Ridge  3  Map of Maple Ridge - Location of Subdivisions 1973......  51  In Pocket .......  In Pocket In Pocket  viii  ACKNOWLEDGEMENTS  The w r i t e r wishes to thank a l l the p r i v a t e developers who responded to the q u e s t i o n n a i r e Consulting  Engineers f o r  Germain Matthieu f o r  For time and c o o p e r a t i o n ;  the c o m p i l a t i o n of d a t a ;  the  Gary Young and  a s s i s t a n c e i n r e s e a r c h and the f o r m u l a t i o n  c o n c e p t s ; my s e c r e t a r y  of  Bonnie Tuka and Mrs. M. Brown who worked on  the yeoman chore of t y p i n g . Dr. S t a n l e y Hamilton f o r  This writer i s e s p e c i a l l y g r a t e f u l  h i s advice and g u i d a n c e .  to  CHAPTER I  INTRODUCTION The Problem There i s currently a housing shortage i n the Greater Vancouver and Louer Fraser Valley Region.  The Greater Vancouver Regional  D i s t r i c t Policy Report succinctly describes the s i t u a t i o n : Uhen the price o f housing increases at a rate o f 30 percent ....when apartment vacancy rates f a l l to one-half of one percent....when our population increases by four percent a year and our housing stock by only two and a half percent. ...then we have a housing c r i s i s . Yet no one - least of a l l the .•municipalities concerned - has taken any concrete steps to meet the need. ^ To add fuel to the f i r e , further rapid population growth i n the Vancouver Metropolitan Area i s expected.  The Lower. Mainland  Regional Planning Board i n "Population Trends i n the Lower Mainland 1921 - 1986 Technical Report" estimates a population increase of 14% during each Df the next three five-year periods.  The report pre-  dicts population increases i n the period of 1971 to 1986 of 35% for the Burrard Peninsula, 56% for the North Shore, and 91% for the South Shore.  There i s already evidence to suggest that these projections  may be low. A shortage of housing i s only one dimension of the complicated problems that are associated with urban growth. Ecological factors need consideration.  Density of development i s reputed to  cause psychological disturbance.  Transportation f a c i l i t i e s within  the region are generally considered to be inadequate.  Further  2 development u i l l add to the stress on transportation systems.  Ex-  tensive community f a c i l i t i e s u i l l have to be provided to the i n creases in population generated by urban grouth. Given a l l the e x t e r n a l i t i e s associated uith housing, this report u i l l only focus on one problem - the provision of housing i n . the Greater Vancouver Region. Uho u i l l provide the housing?  Hou  u i l l i t be done? The provision of housing units i s not an easy medium in uhich to work.  The supply of developable land i s limited.  Municipalities,  under increasing f i n a n c i a l s t r a i n due to the necessity to provide the necessary u t i l i t i e s and services, circumscribe areas in uhich development may  proceed.  for a variety of reasons.  Citizen groups protest against development Landholders hold out against assemblies.  Numerous solutions to the problem of supply housing have been put foruard.  Consider the follouing examples:  - Increasing the supply of mortage funds. - Tax sharing formulas betueen senior and junior governments for' more equitable s p l i t s of tax: i r e v e n u e s for the provision of municipal services. - Creation of stronger forms of metropolitan and/or regional governments to supplement or surplant municipal governments.  '  - Land banking schemes on behalf of municipal, p r o v i n c i a l or federal governments for provision of housing in the future. . - Government grants for the provision of innovative housing; - Expropriation l e g i s l a t i o n permitting some l e v e l of government to expropriate land of owners uho holdout against  3 development so that for -  the p r o v i s i o n  land assemblies can be completed  D f housing.  Taxation measures to recapture s p e c u l a t i v e p r o f i t s  in  land. -  Leasing of b u i l d i n g s i t e s to p o t e n t i a l houseowners  at  r a t e s below competitive markets. -  Income r e d i s t r i b u t i o n  schemes so that  louer income  c l a s s e s can buy or rent h o u s i n g . Innovative approaches to housing problems take time to uork out.  S i t u a t i o n s must become c l e a r l y  evident  before the p u b l i c  aware of them.  P u b l i c awareness precedes p u b l i c debate.  precedes p o l i c y  formulation.  l a t o r s must come to c l e a r e r  Policy  understandings  of.the  situation  of new housing are l e n g t h y . the m u n i c i p a l i t y  servicing  by i t s  and/or r e s i d e n t i a l  been i n i t i a t e d  Lead times i n the  C o u n c i l takes t i m e .  Municipal subdivision  summary, p r o j e c t s  objectives  Land assembly  approval takes t i m e .  dwelling  construction  trunk  Subdivision  takes t i m e .  to supply new housing i n the near future  In  must have  some time ago.  developers,  provide  order  provision  P r o v i s i o n of  takes t i m e .  This t h e s i s i s based on an assumption. that  in  and which would  D e l i n e a t i o n D f development  sewers and other necessary i n f r a s t r u c t u r e takes t i m e .  Legis-  the problems.  Supplying new housing takes t i m e .  for  P u b l i c debate  f o r m u l a t i o n takes t i m e .  to determine which p o l i c i e s would tend to a l l e v i a t e tend to i n t e n s i f y  is  either  The assumption i s  p u b l i c agencies or p r i v a t e  companies, w i l l  the housing i n the region w i t h i n the ffinirseeable f u t u r e  working w i t h i n the l e g a l , f i n a n c i a l , m u n i c i p a l , p r o v i n c i a l , ownership,  managerial and m a t e r i a l s supply frameworks now  land-  existing.  V This report i s , i n small part, an examination of the a b i l i t y of a subsect of r e s i d e n t i a l developers,  the 'major' private sector  developers within the Vancouver region to f i l l their function the supply of new r e s i d e n t i a l housing. Objectives of Thesis The primary objective of this report i s to document the land holdings of the major r e s i d e n t i a l developers i n the, region with a view to ascertaining what i s the nature of these holdings and what reasonable expectations  can be held as to the a b i l i t y of the major  developers to play their role i n supplying r e s i d e n t i a l building s i t e s and/or r e s i d e n t i a l dwelling units i n the foreseeable  future.  The secondary objective i s to outline the steps that the developer must follow to add the necessary increments to his land inventory i n order to replenish his inventory as lands are developed. Such an ongoing addition to the developers'  inventories w i l l be  necessary i f the r e s i d e n t i a l development industry i s to continue to play an active role i n the future.  It may well be that choices open  to.the developers i n the aggregate for the acquisition of land developable within t h i s time horizon required by developers may be quite limited.  It may be that the limitation of the choices i s a direct  result of the planning process as brought down by the municipalities involved. A t h i r d objective of this report i s to outline the f r i c t i o n s that presently exist i n the supply process for residential, dwellings and to point out some implications of these f r i c t i o n s for the near term supplies of building s i t e s .  This report w i l l be limited to  5 pointing out f r i c t i o n s i n the land acquisition and land assembly processes.  A concurrent thesis to be produced by Gary Young, also a  graduate student of the Faculty of Business of the University of B r i t i s h Columbia, w i l l discuss the f r i c t i o n s generated by the munic i p a l subdivision approval process. Structure of Thesis Chapter II outlines a conceptual overview of the supply and demand for housing.  The relationship between existing housing stock  and new housing i n s a t i s f y i n g housing demands i s examined.  A brief  overview of the f i l t e r i n g process within the housing stock i s included to provide further.insight into the flow between existing and  new  housing.. The effects of excessive demand on the supply for the t o t a l housing stock on serviced dwelling s i t e s , prices and raw land prices i s outlined. Chapter III examines the housing supply/demand balance i n the Greater Vancouver Regional D i s t r i c t in quantitative terms to determine i f there i s any evidence of inbalance. Chapter IV sets out a t h e o r e t i c a l framework for the examination of the supply process for serviced r e s i d e n t i a l dwelling  sites  against which the actual s i t u a t i o n in the Greater Vancouver and Lower Fraser Valley Region can be measured. s p l i t into two sectors.  The t h e o r e t i c a l framework i s  The f i r s t i s a s t a t i c analysis of potential  supply comparable to the existing situation i f i t were possible to "freeze" action at any one moment in time.  The second i s a dynamic  analysis setting out what happens to potential supply as i t i s converted to actual supply through time.  6  Chapter V o u t l i n e s an overview of the r o l e of p u b l i c companies i n Canadian r e s i d e n t i a l development. public f i n a n c i a l participation as a whole i s documented.  tide  i n the Canadian r e a l e s t a t e  Reasons f o r the e v o l v i n g  p u b l i c companies are d i s c u s s e d . companies a c t i v e  The r i s i n g  Land i n v e n t o r i e s  of  industry  involvement  of selected public  i n r e s i d e n t i a l development are documented to  d i c a t e the s i z e of these holdings r e l a t i v e  of  in-  to developer holdings  the Vancouver Region and the g e o g r a p h i c a l d i s t r i b u t i o n  in  of these  inventories. Chapter VI i s  an e v a l u a t i o n of the e m p i r i c a l r e s u l t s  ated by the q u e s t i o n n a i r e used to a s c e r t a i n the i n v e n t o r i e s s e l e c t e d companies o p e r a t i n g i n the Vancouver r e g i o n . i s to gain some i n s i g h t  The  generof  objective  i n t o the extent Df the land i n v e n t o r i e s  these companies - both i n gross acreages and i n terms of the  of  potential  number of r e s i d e n t i a l dwelling u n i t s which could be s u p p l i e d i n the foraeeable  future.  Chapter VII  i s a s t a t i c examination of the  supply of r e s i d e n t i a l dwelling  units.  potential  A comprehensive examination of  a l l seventeen m u n i c i p a l i t i e s i n the Greater Vancouver Regional District Valley  as w e l l as the o u t l y i n g  l i e s beyond the productive  to t h i s t h e s i s . Ridge.  m u n i c i p a l i t i e s i n the Lower  c a p a c i t y of the resources a l l o c a t e d  Two m u n i c i p a l i t i e s are s e l e c t e d - Surrey  Quantitative  Fraser  and Maple  e v a l u a t i o n s of the r e d u c t i o n s i n dwelling  site  p o t e n t i a l c a p a c i t y due to a s e r i e s of M u n i c i p a l and P r o v i n c i a l  con-  straints,  are documented i n these two m u n i c i p a l i t i e s .  i n d i c a t i o n s of f u r t h e r difficulties  Furthermore,  r e d u c t i o n s i n p o t e n t i a l supply due to the  of assembling l a n d , are examined.  7 Scope and Methodology Intent The intent of this study i s to examine tuo aspects of the process by uhich r e s i d e n t i a l duelling units are supplied to consumers of heu housing i n the Vancouver region.  These aspects are the sizes of  rau land inventories uhich are currently i n the hands of major private sector developers and the process by uhich land incremental to land inventories i s assembled. Limitations to Intent There are definite limitations to this study due to the structuring of i t s intent.  The study does not deal uith suggestions  as to allowable densities per developed acre.  It does not deal uith  any of the economic, ecological or s o c i a l e x t e r n a l i t i e s associated uith supplying housing.  It does not discuss the quality or form of  housing that u i l l be supplied.  I t does not investigate the trade-off  betueen the desire for increased planning controls and the provision of housing.  I t simply discusses the potential supply of r e s i d e n t i a l  housing. Data Gathering  Techniques  The analysis i n this study i s based upon data gathered from three sources.  The f i r s t source i s a questionnaire distributed to  eighteen companies.  The second source i s the c o l l e c t i n g , sorting,  c l a s s i f i c a t i o n and counting of data collected from Municipal planning revieus, seuer and uater, p o r t f o l i o maps, legal maps and Greater Vancouver Seuer and Drainage D i s t r i c t ' r e p o r t s .  The t h i r d source i s  8 i n f o r m a t i o n as to land assemblies gathered by the w r i t e r i n the course of employment experience i n the development The q u e s t i o n n a i r e on land i n v e n t o r i e s eighteen major p r i v a t e  developers.  The l i s t  industry.  were d i s t r i b u t e d  to  of developers was  compiled from: a)  The membership of the Urban Development ( B . C . Region),  Institute  CI  b)  The membership l i s t of the l o c a l chapter of H . U . D . A . C . (The Housing and Urban Development A s s o c i a t i o n of Canada).  In each case, generally  developers  known to have the important land holdings i n the area f o r  the p r o v i s i o n ability  the l i s t was pared to i n c l u d e those  of r e s i d e n t i a l u n i t s .  In each c a s e ,  the demonstrated  to produce r e s i d e n t i a l housing and/or s e r v i c e d dwelling  was an a d d i t i o n a l c r i t e r i o n . holdings,  the l i s t  Based on s i z e and importanceeof' land  of companies s o r t e d i t s e l f  companies - both l o c a l l y  sites  out to be p r i m a r i l y  based and the s u b s i d i a r i e s or branch o p e r -  a t i o n s or n a t i o n a l and i n t e r n a t i o n a l p u b l i c companies. companies were i n c l u d e d i n the  Only two  list.  Each q u e s t i o n n a i r e was d i s t r i b u t e d p e r s o n a l l y by r e s e a r c h to an executive the executive  of the company i n q u e s t i o n .  had s u f f i c i e n t  d i s c u s s i o n s on v a r i o u s  initiated  aspects of the housing market.  i n the q u e s t i o n n a i r e s .  as the c r i t e r i a precedent  desired,  the executives were i n s t r u c t e d to f i l l  at l a t e r  dates.  q u e s t i o n n a i r e s upon t h e i r  general  In each case,  Due to the nature of the  The i n t e r v i e w e r s  i n the  questionnaires  In some c a s e s , where time  was l i m i t e d , ' the developers mailed i n t h e i r  responses.  to  information  p e r s o n a l l y p i c k e d up the  completion.  staff  In those i n s t a n c e s where  time, the i n t e r v i e w e r s  the i n t e r v i e w e r i n s t r u c t e d the e x e c u t i v e s filling  public  9 Limitations of the Questionnaire  Approach  The problems associated with data c o l l e c t i o n by means of a questionnaire were inherent in this questionnaire.  Some of the  limitations are: 1.  The person responding  to a questionnaire uas not able to .  discuss his d i f f i c u l t i e s in interpretation in a face-to-face meeting with the person drawing up the questionnaire. 2.  The necessity to draw up the questionnaire in advance of  the survey.  Care had to be taken to include questions designed to  draw out a l l the relevant factors, and this was  done, in part, through  a pre-screening test run. 3.  The necessity to include questions relevant to  developers  operating in a l l f i e l d s but.to be sure that relevant questions subtracted out the nature of the land inventory scheduled dential development. k.  ,  for resi-^-  .  The reluctance on the part of some developers to release  certain information. 5.  The human desire on the part of a l l respondents to any  questionnaire to "put the best face forward."  This phenomenon would  be p a r t i c u l a r l y relevant with respect to ascertaining reasons as to why  land inventories were not being developed  now.  Limitations in Collecting Data from Flaps and Municipal Reports Few  Planning  limitations arose in c o l l e c t i n g , sorting and  data from maps.  counting  The major d i f f i c u l t y was to standardize the data  c o l l e c t i o n between the two municipalities so that the results are  comparable.  Standardized  as possible, standardized  procedures were adopted which, i n s o f a r / results.  Hypotheses There are several hypotheses to be examined. 1.  That the public companies involved in r e s i d e n t i a l development  do not have sizeable raw  land inventories in the Vancouver region  in comparison to other Canadian Urban centres. 2.  That major private sector developers  do not have extensive  raw land inventories over and above their needs for immediate development. 3.  That splintered land holdings make the assembly of large  tracts of raw land very d i f f i c u l t and expensive thereby reducing  the  process of replenishing raw land inventory. k.  That the designation of "development areas" by the municipali-  t i e s reduces the potential supply of r e s i d e n t i a l dwelling units. 5.  That the d i f f i c u l t i e s associated with assembling splintered  landholdings within designated  development areas further reduces the  potential supply of r e s i d e n t i a l dwelling units.  11  \  Footnotes  ''"Greater Vancouver Regional D i s t r i c t , "Report of the R e s i d e n t i a l L i v i n g P o l i c y Committee", The Greater Vancouver R e g i o n a l D i s t r i c t , December 1973, P r e f a c e .  12  CHAPTER I I  SUPPLY AIMD DEMAND FDR HOUSING THEORETICAL ANALYSIS A n a l y s i s o f the s u p p l y o f r e s i d e n t i a l d u e l l i n g u n i t s must begin u i t h an a n a l y s i s o f the s u p p l y and demand f o r the housing s t o c k as a u h o l e .  In c o n t r a d i s t i n c t i o n t o many o t h e r consumer goods, con-  sumers o f housing can choose betueen buying e x i s t i n g d u e l l i n g  units  u h i c h are up f o r r e s a l e , r e n t i n g d u e l l i n g u n i t s , o r buying a neu u n i t . At any g i v e n t i m e , t h e uhole o f the e x i s t i n g housing s t o c k i s l a t e n t l y up f o r s a l e o r r e n t as u e l l as the t o t a l i t y o f neu a d d i t i o n s to  the housing s t o c k .  I f p r i c e l e v e l s d i f f e r betueen the tuo c a t e -  g o r i e s o f h o u s i n g , s u f f i c i e n t h o l d e r s o f e x i s t i n g s t o c k u i l l be ini duced i n t o the market, t o buy neu homes and s e l l t h e i r o l d homes so as t o e q u a l i z e p r i c e s .  I f the p r i c e d i f f e r e n c e i s i n the o t h e r  d i r e c t i o n a s u f f i c i e n t number o f neu home buyers u i l l be induced t o pass up neu homes i n f a v o u r o f o l d e r ones, u n t i l , once a g a i n the p r i c e l e v e l s are approaching  equalization.  •At any one t i m e , the e x i s t i n g housing s t o c k makes up t h e g r e a t e s t b u l k o f the housing market.  Increments  t o t h e housing s t o c k  n o r m a l l y range from t u o t o f o u r p e r c e n t per annum.  Therefore,  p o t e n t i a l s e l l e r s o f e x i s t i n g housing make up n i n e t y - s i x t o n i n e t y - *  e i g h t p e r c e n t o f t h e p o t e n t i a l market a t any one t i m e . ... Neu housing * I t may be argued t h a t o n l y a s m a l l percentage o f the e x i s t i n g s t o c k may be up f o r s a l e a t any one g i v e n t i m e . T h i s does not take i n t o account t h a t i f t h e r e uere major p r i c e d i f f e r e n c e s , more e x i s t i n g housing u o u l d come onto t h e market.  13 makes up only sellers existing  two to four p e r c e n t .  is considerable. housing.  obtain uithout  In most c a s e s ,  Each f a m i l y s e l l s  in s e l l i n g his product. supplying e i t h e r  f a m i l i e s oun  oun u n i t at the p r i c e  Each b u i l d e r  to the r e g i o n a l market. * competition,  2  it  sites  sellers.  65D. b u i l d e r s  s i x t y three  and/or r e s i d e n t i a l  appears that the market f o r  can be considered as l i v i n g  competition i f  space purely  in  duellings  the housing  residential  agent  developers  In. terms of the economists' d e f i n i t i o n  approaches p e r f e c t  can  acts as an independent  Richard Moore i n t e r v i e u e d  residential building  it  agreements betueen  out that there are approximately  the Greater Vancouver area."*"  as a u h o l e ,  its  individual  r e f e r e n c e to any p r i c e f i x i n g  Edmund P r i c e p o i n t s  perfect  The number of a c t u a l and p o t e n t i a l  of stock,  duellings  and s i m p l y .  The housing stock and the i n t e r a c t i o n s  of supply  and demand f o r  the housing stock can be diagrammed roughly as i n d i c a t e d b e l o u . Occupants of Net immigration/ ^ Number of p a r t i c i p a n t s e x i s t i n g stock emmigration uho can f i n a n c e p u r + chase of r e n t a l or net household residential duelling . formation units = index +  E x i s t i n g housing stock 100% If  the index number i s  +  Net a d d i t i o n s to housing stock (2% to 4%)  1 - r e s i d e n t i a l unit prices u i l l  number  stabilize.  If  *"Perfect competition i s d e f i n e d by the economist as a t e c h n i c a l term: ' p e r f e c t c o m p e t i t i o n ' e x i s t s only i n the case uhere no farmer, b u s i n e s s man or l a b o r e r i s a b i g enough part G T the t o t a l market to have any personal i n f l u e n c e on market p r i c e . " **The p o i n t should be made, houever, that d u e l l i n g u n i t s are not normally considered as purely and simply l i v i n g s p a c e . Each d u e l l i n g u n i t has a c e r t a i n l o c a t i o n u i t h l i n k s to or p r o x i m i t y to p l a c e s of employment, shopping, s c h o o l s , r e c r e a t i o n f a c i l i t i e s and d e s i r a b l e neighborhoods. Such s p e c i f i c l o c a t i o n s 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 d u e l l i n g u n i t market.  Ik  the index number i s greater 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/emmigration balance  changes,  ii)  rate of net hcushold formation d e c l i n e s - u s u a l l y through doubling up of households,  iii)  number of p a r t i c i p a n t s able to finance entry i n t o the market declines 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 (new and e x i s t i n g ) ,  iv)  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 increased 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 increases 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 w 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 increases demand or reduces supply. F i l t e r i n g occurs throughout the housing s t o c k .  Owners of  e x i s t i n g housing s e l l t h e i r homes and buy new or used housing or move to r e n t a l accomodation. e x i s t i n g homes.  Occupiers of r e n t a l accomodation buy new or  F i l t e r i n g patterns normally, although not always,  follow 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 finance the a c q u i s i t i o n of a dwelling 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 ) increases 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 w i l l normally upgrade his housing accomodation.  I t should be noted however that as i n d i v -  i d u a l incomes increase a smaller proportion 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 conclusive evidence  to suggest that 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 range from . 3 to .5 and flow e l a s t i c i t i e s are below 1.  Uhler (1968)  also supports t h i s a n a l y s i s as he has found income e l a s t i c i t i e s range  15 between .34 and . 5 7 .  6  Lee (1964)  that income e l a s t i c i t y  *  supports these f i n d i n g s concluding  i s l e s s than u n i t y hence the p r o p o r t i o n  of  7 income spent on housing f a l l s as income r i s e s . The w i l l i n g n e s s  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 " up  or down through the accomodation spectrum i s o f t e n i n f l u e n c e d by a s p i r a t i o n s and needs, such a s , s i z e of f a m i l y and need f o r f a m i l y and neighborhood a s s o c i a t i o n s and t i e s ; of s t a t u s to the i n d i v i d u a l ; pursuit  of l i f e  space;  p s y c h o l o g i c a l importance  e x p e c t a t i o n s as to f u t u r e  income l e v e l s ;  s t y l e s which l e a d to a l l o c a t i n g funds to other c o n g  sumer goods and a c t i v i t i e s . dividual's willingness  One important determinant of the  to p a r t i c i p a t e i n t h i s  h i s e x p e c t a t i o n s as to f u t u r e housing p r i c e s .  filtering If  in-  process i s  the p a r t i c i p a n t  is  convinced that the p r i c e of housing w i l l continue to e s c a l a t e , he w i l l likely  use any means at h i s d i s p o s a l to purchase a r e s i d e n t i a l  u n i t now r a t h e r than w a i t . the t r a n s f e r of f u t u r e  dwelling  The net e f f e c t of t h i s phenomenon i s  demand to the p r e s e n t .  Summary of Supply and Demand The overview of the supply and demand f o r housing stock i n the previous s e c t i o n s , while l a c k i n g i n some d e t a i l s and i n  given refine-  ment, does present a working model of the f a c t o r s that are i n s t r u m e n t a l to a n a l y s i s .  These f a c t o r s are depicted i n Figure 1.  In Figure 1, current supply i s d e p i c t e d by S^S,-> and current demand by P^.  If  D  q  D  n  *  At  D r ,  e p o i n t i n time, the p r e v a i l i n g p r i c e would be  there i s a s m a l l i n c r e a s e i n the supply to S^S^ that i s  small r e l a t i v e  to the number of e x i s t i n g  quite  u n i t s i n s t o c k , and no change  i n demand, p r i c e s would f a l l to P^, a s m a l l d e c r e a s e .  I f , . o n the  other hand, demand i n c r e a s e d to D^D^ while supply i n c r e a s e s to S^S^, *A11 these authors r e f e r to permanent income r a t h e r than current income.  .16 Figure 1 Interactions of Supply and Demand for Housing  I  S  Source:  l  S  2  Hamilton, S.W., Public Land Banking - Real or I l l u s i o n a r y Benefits? Report for the Urban Development Institute of Ontario , 1974, p. 10.  17 prices w i l l r i s e to P^. As there are physical l i m i t s to increases i n supply as well as l i m i t s to the number os r e s i d e n t i a l dwelling s i t e s the planning process w i l l approve, the increases i n supply f o r Canadian centres has been less than the increases i n demand.  urban  I f t h i s , as  Dr. Hamilton points out,'*' has been, the case, i t would account f o r a 0  major portion of the price r i s e s i n Canadian housing i n the past decade. "The problems of supply of housing and building l o t s , . as serious as they may be, are not as c r i t i c a l as the changes i n demand. Growing population, rapidly r i s i n g incomes, demand f o r better housing, and increased concentration i n a few urban areas are creating insatiable demand f o r housing and land. Over the past ten years, incomes and disposable incomes have risen more rapidly than housing expenditures, and the concentration of population into urban areas has continued. In addition, important new incentives, i n the farm of s p e c i a l income tax status f o r p r i n c i p a l residences, has bolstered the already extensive demands f o r housing, especially ownership. S i m i l a r i l y , improved mortgage terms and p r o v i n c i a l financing f o r second mortgages have a l l contributed to the increased demands."!! Effect 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 f o r the housin stock as a whole w i l l r a i s e price l e v e l s f o r the new housing stock, coming on stream, dramatic changes w i l l occur i n the prices paid for serviced dwelling s i t e s through the action of leverage. more dramatic price  Even  changes w i l l take place f o r raw land due to the  effect of compounded leverage. Table 1 sets out some assumptions  about the average price  levels of e x i s t i n g housing as these price changes occur through time. The builder w i l l take h i s p r i c i n g clue from the average price of comparable houses i n comparable locations to the one he i s going to b u i l d .  I n s t i n c t i v e l y , he knows that hre-cannot influence the  18  Table 1.  Existing Duelling Stock Price Rises Through Time.  Year 1  Year 2  Year 3  Average Price Level of Existing Comparable Houses i n Comparablef $ $ Locations 26,000 30,000 38,000  Percentage Change Year 1 to 2  Percentage Change Year 2 to 3  + 15%  Percentage change Year 1 to 3  + k6%  + 27%  o v e r a l l price of housing as^ the aggregate increment to housing stock in any one year i s only tuo to four per cent D f the t o t a l e x i s t i n g stock.  He knous that i f his price l e v e l i s too high, the buyer u i l l  prefer existing housing and his unit u i l l not s e l l .  He also knous that  i f his price l e v e l i s too lou, a crafty speculator u i l l s e l l existing housing to buy the builder's product at an immediate ' p r o f i t ' to the speculator.  The builder also 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 influence as improved design,  louer maintenance and repair costs, better  fin-  ancing terms and the increased status of ouning a neu home. The e f f e c t of the builder's p r i c i n g of his house for sale on the maximum prices that he u i l l pay for serviced r e s i d e n t i a l duelling s i t e s i s demonstrated i n Table 2.  C l e a r l y , i f he receives  more f o r ; h i s house from year to year, he can afford to pay more f o r the l o t ; The actual price he pays u i l l be the end price for h i s house, less the costs of construction and p r o f i t .  I f house prices  r i s e more on a percentage basis than construction costs r i s e on a  19 percentage basis, then p o s i t i v e leverage u i l l r e s u l t .  For instance,  as Table 2 demonstrates, i f house prices r i s e by 27% uhile building costB go up by 20%, l o t prices u i l l escalate by 41%. Negative leverage i s also a d i s t i n c t p o s s i b i l i t y . that house prices remained constant at $30,000 uhile  Assume  construction  costs rose by 20%, from $20,000 to $23,000, l o t prices uould drop from $9,200 to $7,000 - a 23% decrease. Table 2.  E f f e c t of Leverage on Residential Duelling Site P r i c e s .  Year 1  Year 2  Year 3  Price of , home b u i l t by builder $30,000 $34,500 $43,800 Building costs & Profit Maximum Residenti a l Duelling S i t e Price  Percentage . Percentage change change Year 1 to 2 Year 2 to 3  Percentage change Year 1 to 3  +15%  +27%  + 46%  20,800  23,000  27,600  . + 10%  +20%  + 33%  9,200  11,500  16,200  +25%  + 41%  + 76%  The developer, public or private, i s part of the p r i c i n g process.  The builder takes h i s p r i c i n g clue from the price l e v e l f o r  existing comparable housing.  The developer takes h i s p r i c i n g clue  from the, maximum r e s i d e n t i a l duelling s i t e price l e v e l . The price that the developer pays f o r rau land i s leveraged in the same way as the price that builders pay f o r serviced duelling sites.  I f the price paid f o r a serviced site'increases more on a  percentage b a s i s than the s e r v i c i n g casts the e f f e c t w i l l be upward leveraging on the p r i c e paid f o r raw land.  I f the s e r v i c i n g costs  escalate more r a p i d l y than the percentage p r i c e increase f o r s e r v i c e d s i t e s , the e f f e c t w i l l be downward leveraging on the p r i c e s paid f o r raw land.' Table 3.  E f f e c t of Leverage an Raw Land P r i c e s .  Year 1 P r i c e paid by b u i l d e r . for serviced building site $ 9,200 Servicing, costs + municipal imposts + profits Maximum raw land p r i c e per site  5,20.0  4,000  Year 2  Year 3  11,500  16,200  6,300  9,100  5,ZOO.  7,1QD  Percentage change Year 1 to 2  Percentage change Year 2 to 3  +25%  + 21%'  + 41%  .  +30%  +45%  Percentage change year 1 to 3  . + 76%  .  + 37%  + 75%  +78%  Note that Table 3 a l s o demonstrates negative leverage' i n the t r a n s i t i o n i n raw land p r i c e s from year 2 to year 3.  Servicing  costs i n the h y p o t h e t i c a l example have r i s e n from $6,300 i n year 2 to $9,100 i n year 3.  In the same year, the p r i c e paid by the b u i l d e r  f o r s e r v i c e d b u i l d i n g s i t e s increased by a l e s s e r percentage Df 41% frtim $11,500 to $16,200.  The e f f e c t on the maximum raw land p r i c e  per s i t e i s negative leverage.  The p r i c e paid f a r a raw l o t increased  only 37% from $5,200 t o $7,100 while the p r i c e paid f a r a s e r v i c e d .  21 l o t increased by 41%. Consider the implications for the price paid for rau l o t s i f the price paid by the builder had only r i s e n by a much lower percentage. Table 4.  Table 4 points out negative  leverage.  Negative Leverage.  Year 2 Price paid by builder for serviced building site  $11,500  Year 3  Percentage change  13,225  + 15%  Servicing costs + municipal imposts + profits  6,300  9,100  + 45%  Maximum raw land price per s i t e  5,200  4,125  - 21%  Effect of Surplus Demand on the Supply of Housing Units to the Market If the price of existing housing stock i s climbing at an unusually rapid rate, the builder w i l l develop 'expectations' as to the price that he may be able to obtain f o r h i s product i f he waits. I f the expected increment i n price i s considerably more than h i s holding costs f o r the finished house, he w i l l tend to withold supply from the market.  He withholds supply i n a very simple fashion.  He  simply prices the house at uhat he expects future price levels to be, thereby t r a n s f e r r i n g present supply at present market prices into future supply at' expected future market p r i c e s . The builder w i l l not often uithhold supply f o r any considerable period of time.  F i r s t l y , the holding costs are too onerous.  In  e f f e c t , the builder has to finance the entire cost of the l o t plus  22  the coat of construction of the house at current interest rates. Secondly, the builder needs h i s c a p i t a l to buy another l o t and s t a r t the construction process  over again.  Price (1972) pointed out that 12  builders 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 .  Thirdly,  the builder i s always concerned about temporary setbacks i n the market even though the general d i r e c t i o n i s upwards.  The builder  knows that temporary setbacks i n price add to h i s carrying costs i n reducing  the p r o f i t l e v e l that he w i l l receive from the eventual sale  of the house.  Fourthly, the builder i s usually aware that he w i l l  earn a higher return on h i s c a p i t a l invested i f he i s to s e l l the house and reinvest the proceeds i n purchasing more serviced  lots,  p a r t i c u l a r l y i f he perceives the leverage action on the price of serviced l o t s to be p o s i t i v e i n d i r e c t i o n . In summary, i t i s not to be expected that the builder w i l l withhold his product from the market f o r long periods of time but he w i l l tend to withhold i f the short term price l e v e l s are increasing dramatically.  On the other hand, the builder w i l l tend to accelerate  the supplying of houses to the market i f he perceives short time weakness i n p r i c i n g f o r existing housing stock.  The builder knows  that h i s carrying costs are too heavy. The  developer w i l l also tend to withhold supply of serviced  lots from the market i f he perceives  that the short term price r i s e s  for e x i s t i n g stock are e f f e c t i n g positive leverage on the price structure f o r serviced dwelling s i t e s .  Normally, the developer w i l l  not withhold l o t s from the market f o r long as he i s faced with the same problems as the b u i l d e r .  Carrying costs are too high and c a p i t a l  i s required f o r the purchase of raw land.  The developer w i l l only  tend to withhold i f the short term price r i s e s are dramatic.  23 • n  The holder of rau land also has expectations future price levels f o r rau land.  These expectations  as to the u i l l be  p a r t i c u l a r l y fueled when 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 price of serviced l o t s and also an rau land p r i c e s .  The landholder  i n these periods  u i l l double i n value next year. to s e l l .  'knous' that h i s land  The landouner i s quite reluctant  Furthermore, the landholder  i s i n an excellent position to  wait for further abnormal price increases.  The landouner knous  that his carrying costs are very lou, p a r t i c u l a r i l y i n r e l a t i o n s h i p to the amounts that he expects to receive from further u i n d f a l l gains, • The landholder  tends to withhold  periods of abnormal price increases.  rau land from the market i n  Such uithhalding makes the  assembly of raw land more d i f f i c u l t and more time consuming.  Delays  in land assembly reduce the quantity of raw land which may be feed into the supply process f o r eventual conversion  into dwelling u n i t s .  C o l i e c t i v e l y , landowners are working i n t h e i r own best i n t e r e s t by withholding  land from the market.  24  Footnotes  Edmund V. P r i c e . "The House Building Industry i n Vancouver", Unpublished Master's of Business Administration thesis, the University of B r i t i s h Columbia, Vancouver, 1970. 2 Richard A. Moore. "Development Potential Model for the Vancouver Metropolitan Area", Unpublished Master's of Business Administration thesis, The University of B r i t i s h Columbia, Vancouver, 1972. ^P. A. SamuelsDn, Economics: An Introductory Analysis. Toronto:McGraw-Hill Company of Canada Ltd., 1966, p. 46. ^M. G. Reld, "Capital Formation i n Residential Real Estate", Journal of P o l i t i c a l Economy 66:131-153, 195B. 5 , E. Oksanen, "Housing Demand i n Canada, 1947-1962: Some Preliminary Experimentation", Canadian Journal of Economics and P o l i t i c a l Science, 32: p.312, 1966. ^R. A. Uhler, "The Demand for Housing and Inverse Probability Approach", The Revieu of Economics and S t a t i s t i c s 50: p.133, 1968. 7  T. H. Lee, "The Stock Demand E l a s t i c i t i e s of l\lon Farm Housing The Review of Economics and S t a t i s t i c s 46: p.88, 1964. 8 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. 9 S. UJ. Hamilton, Public Land Banking - Real or Illusionary Benefits, Report of the Urban Development I n s t i t u t e of Ontario, 1974, p. 9. Ibid., p. 9. U  I b i d . , p. 9. E. Price, Op. c i t .  25  CHAPTER I I I  SUPPLY AND DEMAND FDR HOUSING IN METROPOLITAN VANCOUVER  Chapter II dealt u i t h the supply and demand f o r housing i n theoretical terms.  Analysis of the GVRD housing market v e r i f i e s the  contention that the demand f o r r e s i d e n t i a l duelling units i n this region exceeds the supply.  v  Demand f o r housing may be measured as a function of population and income.  "Growing populations, rapidly r i s i n g incomes, demand  for better housing and increased concentrations i n a few large urban areas are creating i n s a t i a b l e demands f o r housing and land"*  In the  Greater Vancouver Regional D i s t r i c t the prices of housing, p a r t i c u l a r l y single family dwellings, have been:increasing rapidly (Refer to column 5 , Table 1 ) .  I t may be argued that the price of housing  i s reaching a point where the t y p i c a l consumer of housing cannot purchase the same house lie bought two years ago i n today's market, as the increases i n costs of housing have exceeded the increase i n his gross income required to s a t i s f y the conventional q u a l i f i c a t i o n s for mortgage financing. clusion.  The fallowing analysis supports t h i s con-  Houever, t h i s may not be interpreted as an indication  that the demand f o r housing should decrease.  A b r i e f analysis of the  basic economics of the housing market and the function of population growth as a cause of demand w i l l c l a r i f y the argument that there i s a strong demand i n the housing market i n the G.V.R.D.  • • -MB  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 ' 2 the t o t a l labour force of 1,000,045 i n July 1971.  Table 5 indicates  the gross monthly income of the average i n d u s t r i a l worker between 1963 and 1973 and relates these figures to the average prices of . existing and new homes i n the Greater Vancouver Regional D i s t r i c t and the dollar increase i n the prices of these homes between 1963 and 1973.  These figures are related to the increase i n the amount of  the monthly payments required to amortize a mortgage at the average annual interest rate over a period of twenty-five years with a 5% and 25% down payment.  Column 9 indicates that i f the average worker  purchased the average priced home i n the GVRD i n 1973 with a 25% down payment his 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 f o r a home i n 1972 and t h i s increase i s $21.84 greater than the increase i n his gross monthly income for the same period.  Prior to 1973 the monthly increases i n gross  income have been greater than the increase i n monthly interest and p r i n c i p a l payments required to finance the purchase of a new home even in the case where there was a 5% down payment.  I f an i n d u s t r i a l  worker i n B.C. purchased an average priced home i n the GVRD i n 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% i n 1971 on a debt of $19,853 would be $177.59 of p r i n c i p a l and interest 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  service i s below, the required income. I f one considers the purchase of an average existing home in tha Greater Vancouver Regional D i s t r i c t i n 1973 according to the  Table 5 The P r i c e o f Homes', i n M e t r o p o l i t a n Vancouver R e l a t i v e t o Average Incomes of I n d u s t r i a l Workers i n B.C. 1963-1973 1 2 3 . '4 5 6 7 Q 9 10 11 Monthly Gross income o f average worker. i n B.C.  Dollar change in income  % change Maximum i n income amount o f ; monthly ' income to s e r vice a mortgage debt .'..'•' based an  • 30%  'debt service ratio  19S3 1954 1955 1555 . 1557 155a 1959 ' . 1570 1971 1572 . 1573 3urce:  8390.43 $17.38 407.81 435.41 28.60 29.08 455.49 495.17 30.68 523.29 . 27.12 32.23 560.52 597.87 33.35 62.96 650.83 53.09 713.72 35.00 748.92  4.5% 7.0 6.7 .6.6 5.5 7.1 6.7 10.5 8.0 4.9  Average D o l l a r prica change ofi n '. single price family dwelling.s i n Metro' Vancouver  Average annual, interest rate's •"••'  '  Tha annual The monthly increase i n i n c r e a s e i n i n mortmortgage gage debt payments o f uith a . principal 25% doun and i n payment terest uith a . 25%•down payment  _ $117.13 $12,637 7% 122.34 13,203 . $566 " 7 • 130.92 '13,965 762 . 6 7/8 139.65 1335 7 3/8 15,200 17,836 2636^ 7 7/8 148'. 85 20,595 8 7/8: 156.99 2759 3344 9 1/4 168.16 . 23,939 1300 179.36 . 10 3/8 24,239 • 198.24 26,471 '. 2232 . 10 •'. 29,714 ' 214.18 3243 •9 1/8 38.561 8847 224.68 9 1/2  8424 511 '.1001 . 1917 2069 2508 ' 915 1614 1432 6635  8 2.99  3.47 7.24 14.35 16.81 . . 21.11 '. 8.28 '•• 14.32 20.08 .""' 56.84  The annual increase i n mortgage debt w i t h a 5% down payment  S 537  723 1268 2504 2621 3116 1235 '..• 2120. 3080 8^04  The monthly I n crease i n mortgag payments o f p r i n c i p a l and i n t e r e s t with a 5 down payment  8 3.78  4.85 9.06 18.89 • 21.32 • 26.19 11.04 18.79... 25.93 72.34  (1) Based on S t a t i s t i c s Canada, Canadian S t a t i s t i c a l Review, H i s t o r i c a l Summary, Aug. 1970, p. 58, Aug. 1973, p.'53. (5)  Based on the average 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 the GvRD derived from Real Estate Trends i n M e t r o p o l i t a n Vancouver. P u b l i s h e d by the S t a t i s t i c a l Survey committee o f the Greater Vancouver Real E s t a t e Board A s s o c i a t i o n 1963 t o 1973.  (7)  Real Estate Trends i n M e t r o p o l i t a n Vancouver 1963-1973.  (8)  The annual increase' i n the r e q u i r e d loan t o purchase'a home i n M e t r o p o l i t a n Vancouver with a 25%' down payment..  (9)  The monthly i n c r e a s e In mortgage payments Df p r i n c i p a l and i n t e r e s t amortized over 25 years with a down payment o f 255  (10) The annual i n c r e a s e i n t h e . r e q u i r e d mortgage, loan t o purchase a home i n M e t r o p o l i t a n Vancouver w i t h a 5% down payments (11) The monthly i n c r e a s e ' i n the. mortgage payments o f p r i n c i p a l and i n t e r e s t amortized over 25 years w i t h a down ' payment o f 5%.  28  c r i t e r i a ';used i n Table 5 uith a 25% doun payment of $9,640 the ;  monthly payments of p r i n c i p a l and interest on the remainder of $28,920 would be approximately $241.30.  Referring back to Table 5,  column 4, i f the average uorker uished to obtain a mortgage from a conventional lender uho used a 30% debt service r a t i o , the monthly payments greatly exceed those permitted,$224.68).  This very  element-  ary analysis excludes the monthly c a l c u l a t i o n of property tax uhich would be added to the p r i n c i p a l and interest payments uhen c a l c u l ating the minimum required 30% of gross income to s a t i s f y the debt. Houever, i t i s obvious that the average i n d u s t r i a l uorker i s not capable of purchasing the average priced home i n the Greater Vancouver Regional D i s t r i c t . One may argue.that the purchaser may turn to alternative sources of finance which do not consider the debt service r a t i o as a major factor i n determining the amount of the mortgage that could be granted.  Credit Unions u i l l presently 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 permitting a s l i g h t l y higher debt to service r a t i o .  In 1973 the cost of an  average priced home i n the GV/RD increased by $8,847.  A 25% doun payment  requires $2,211 cash i n addition to the amount required for a home in 1972.  The average i n d u s t r i a l uorker would have to generate an  additional $2,211 i n savings or would have to save approximately 24% of his gross income for 1973.  I t should be noted that the preceding  analysis 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 incomes of a large portion of the labour force and t h e i r capacity to finance homes purchased i n 1973. that have not been considered.  There are many important variables A most important conclusion i s that  even i f t h i s argument i s accepted, there i s s t i l l a strong demand .  29 • for housing uhich u i l l keep prices high. An economic analysis of the housing market requires recogn i t i o n of a very important economic condition that puts the housing market i n a unique a n a l y t i c a l s i t u a t i o n .  Additions to the  supply of housing account for a very small portion of the t o t a l supply.  The t o t a l stock of single family duellings i n the GVRD i s  estimated to be 215,445 for the year of 1971.^  The addition to the  housing stock i n 1971 i n the form of single family duellings uas approximately 5,674 or approximately 2% of the net stock. imately 6,726 units uere added i n 1972 and 5,525 i n 1973,  Approxyielding  4 a stock of 227,698 single family duellings.  When considering  housing demand, this aspect of the market i s . c r i t i c a l . Since there are so feu housing units created i n r e l a t i o n to . the t o t a l housing stock, the amount of demand required to absorb the additions to the stock are not that great.  The average  industrial  worker uho purchased a home i n the GVRD at the average price of $26,471 according.to Table 5 uith a mortgage of $20,000 can s e l l his house for $38,561 i n 1973.  After paying his mortgage o f f , he has  approximately $18,000 cash uhich he uould use as a doun payment touards the purchase of another home.  I t i s quite possible that he  may have saved funds to buy a more expensive home and that he could service the debt given his increased equity p o s i t i o n .  Combining the  a c t i v i t i e s of home ouners uho have r e a l i z e d a tremendous equity gain and those who are entering the market today, the process of f i l t e r i n g stakes place and the additions to the stock of housing are quickly absorbed. .1.  Demand for Housing as a Function of Population Since the additions to the housing  are not that great the  demand f a r housing does not require a s i g n i f i c a n t number of purchasers  to give i t strength.  A demographic analysis u i l l reveal  that increases i n population and prospective home, buyers i n the GVRD has created a s u f f i c i e n t demand i n the housing market to keep prices high. Analysis of b i r t h r a t e s , mortality rates and migration rates indicates a steady population grouth i n the GVRD betueen 1966 and 1.971 and produces a basis f o r forecasting s i g n i f i c a n t increases i n population i n the future.  A b r i e f consideration of each component  of grouth provides a good indication of the impact this grouth have on the housing  uill  demand.  S t a t i s t i c s Canada indicate that the f e r t i l i t y rate uhich i s taken to be the number of children born to a female during her entire 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 follouing comments may be made regarding f e r t i l i t y rates according to S t a t i s t i c s Canada. Figure 2 F e r t i l i t y Rates  High 2.4  ~ -' - Lou  2  1960 Source:  1965  1970  1975  1980  1985  Population projections f o r Canada 1969-1984, S t a t i s t i c s Canada 1970.  31 .  - There e x i s t s a marked decline i n t o t a l f e r t i l i t y from 3.9 to approximately 2.4 i n the 1960's but an achieved l e v e l l i n g out around 1969. - Considering  " the projected ranges to 1984,  the most p r a c t i c a l  r a t e 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 contrary. - The a r r i v a l o f a t h i r d c h i l d does not generally a l t e r a family's need f o r family housing as does the a r r i v a l o f the f i r s t and second c h i l d ; t h e r e f o r e , the p r o j e c t i o n s to 1984 have l i t t l e e f f e c t ; the move from an apartment to a s i n g l e family or a row d u e l l i n g i s u s u a l l y i n i t i a t e d by the f i r s t or second c h i l d . - I f a high f e r t i l i t y r a t e p r e v a i l s say to 2.8, then there  uill  be s i g n i f i c a n t population e f f e c t s but i n terms o f 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 review of an a n a l y s i s by the Greater Vancouver Regional D i s t r i c t on population growth confirms these conclusions by basing i t s forecast on the f a c t that the number o f b i r t h s i n the GVRD uas 10% lowe than the expected number of b i r t h s using the known r a t e s f o r a l l o f 5 B.C.  Thus, the trend of population growth i n 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 population.  The GVRD a n a l y s i s has found t h i s rate  to be f a i r l y constant. Migration r a t e s are the most important i n an a n a l y s i s of the GVRD. Migration rates are most important i n a population a n a l y s i s of the GVRD^ . Approximately 76.5% of the population increase between 1966 and 1971 i s accounted f o r by migration.^  66% of the t o t a l number of  32 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 migration of approx-  imately 20,000 per year and that approximately  60% of these are i n  the age bracket of 20 to 28 t h i s aspect of population growth should have an effect on demand for housing.  It i s not known what  percentage  of these people would qualify for financing of the homes i n the present market, however, since t h i s age group i s one with the highest f e r t i l i t y rate. ,'One  could argue that these people would affect the demand for  single family dwellings.  It i s important to note that they may  purchase  homes at various price levels i n the housing market absorbing the homes vacated by those moving into more or less expensive homes.. The forecast for future growth i n the GVRD indicates that population should increase by 141,678 from 1,028,345 i n 1971 to 1,169,923 in 1976.  The population increase forecast for those aged between 20  and 29 should be approximately 7,347 per annum or 25.8% of the average t o t a l population increase of 28,335.  The age group between 30 and 39  w i l l have a population increase of approximately  6,202 per annum which 8  i s 21% of the t o t a l population increase per annum. The population s t a t i s t i c s confirm the fact that there i s a s i g n i f i c a n t expected growth rate i n population p a r t i c u l a r l y i n the age bracket most l i k e l y to enter the housing market.  The entire demand  analysis of t h i s chapter has concentrated on single family dwellings in order to interpret 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 available to suggest  that the demand for dwelling units as a whole i s very strong and w i l l maintain i t s high l e v e l i n the future.  A review of s t a t i s t i c s provided  by Central Mortgage and Housing Corporation and the Economics and S t a t i s t i c s Division of Canada confirm t h i s f a c t .  33 Table 6 relates houshold formation to the t o t a l number of duelling starts betueen 1961 and 1976. Table 6.  Household Formation and Duelling Unit Starts i n Metropolitan Vancouver 1961 - 1976 Duelling Unit Starts  Household Formation Familv  l\lon Family  1961 - 1966  23,9011  ' 19,700  1966 - 1971  42,100  1971 - 1976  55,400  Source :  Total 43,600  46,391  22,400 ,  64,500  69,851  35,600  91,000  98,280  CMHC, Canadian Housing S t a t i s t i c s yearly additions and Kirkland, J.S. , Demoqraphi c Aspects of Housing Demand to 1986 CMHC, Economics and S t a t i s t i c s Division, 1971.  Household formations averaged 8,720 annually for the f i r s t half of the 1960's.  Housing starts uere 9,278 annually. . Betueen 1966  and 1971 the annual average of duelling unit starts uas 13,970.  The aver-  age number of household formations uere 12,900 for the same period. The estimated number of household formations based on census data betueen 1971 and 1976 i s approximately 18,200 per year.  Approximately 20,000 duelling  units per year u i l l be required to meet the estimated rate of housing formation.  Since 1971 duelling unit starts have been f a l l i n g short of  the projected demand.  In 1971 there uere 15,553 s t a r t s , i n 1972 there  uere 14,126 and i n 1973 there uere 14,953 (reference to Tables 7, 8, and 9 provide a detailed breakdoun of s t a r t s ) .  This figure i s 4,703  units short of the projected duelling unit starts of 1971-1976 per annum required to s a t i s f y housing formation.  Thus given the projected popu-  lation grouth and housing formation and the t o t a l production of duelling  Table 7.  Residential Building A c t i v i t y - Duelling Starts i n Metropolitan Vancouver 1967-1973  Single detached  1967  1968  1969  1970  1971  Total  1972  1972*  1973  5,980  5,146  4,763  4,482  5,283  25,654  5,625  7,300  6,726 -  348  512  402  350.  391  2,003  368  368  . 362  6,328  5,658  5,165  4,832  5,674  7,668  7,088  208  311  580  839  1,057  2,995  1,635  945  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  13,621  15,690  17,690  13,433  15,553  75,987  14,096  16,199  14,953  Semi Detached and-Duplex  Rou Apartments  Total Annual Starts  A l . 27,657  *  Includes Langley, Maple Ridge and P i t t Meadous Source:  CMHC  5,993 .  Table 8.  Residential Building A c t i v i t y - Single Family Duelling 1967 — 19 / ->  Vancouver Burnaby Neu Westminster North Vancouver West Vancouver  Coquitlam Port Coquitlam Port Moody  595 596 22 539 114  2,516 2,505 93 2,450 897  601 496 21 438 139  699 544 19 524 165  1,506  1,273  1,866  8,461  1,695  2,131  231 413 63  206 310  248 305 46  1,932 1,968 432  350 289 23  52 28 3  528 558 15 514 242  393 498 6 454 155  1,959  1,857  819 599 168  428 341 113  Miscellaneous Total Metro-Vancouver  "•Includes . duplexes Source:  CMHC  i n Metropolitan Vancouver  405 330 8 412 118  595 523 42 531 268  Richmond Surrey White Rock Delta  Langley - C i t y Langley - Municipality Lions Bay Maple Ridge P i t t Meadows  Starts  .  1*2  Table 9.  Res  i d e n t i a l Building A c t i v i t y - Multiple Duelling Starts* Metropolitan Vancouver 1967 - 1973  Vancouver Burnaby (Mew Westminister North Vancouver Llest Vancouver  Coquitlam Port Coquitlam Port Moody  Richmond Surrrey White Rock Delta  Total  1972  1973  868 197  18,387 8,498 3,170 5,084 1,050  1,936 1,119 149 943 183  2,610 1,027 742 675 707  6,038  36,189  4,330  5,761  1971  1968  1969  1970  3,649 1,310 914 713 217  4,626 1,628 1,106 . 1,170 133  6,106 1,320 673 1,449 163  1,290 2,116 344" 884 340  2,716 - 2,124 .:  6,803  8,663  •9,711  4,974  241 59 102  503 130 158  837 231 134  402  791  1,202  1,026  983  10 72 6  69 379 26 104  696 595 189 131  1,424 469 159 549  845 1,575 95 343  88  578  1,612  2,601  7,293  10,032  12,525  8,601  1967  i33  516 •• •• ' ' 140 370  555 64  188 64 78  619  330  3,034 ' 3,029 541 1,133  996 1,420 347 96  336 989 492 21  2,858  7,737  2,859  ' 1,838  9,879  48,330  7,808  7,865  482 426 75  ' 2,579 986 839 . 4,404  295 354 8 66  Miscellaneous Langley - City Langley - Municipality Lions Bay Maple Ridge P i t t Meadows  723 Source:  CMHC  264 106 370  37 units the supply is falling behind the demand. A brief analysis of the two major components of single family duelling costs, the land and the cost of labour and materials, u i l l put the case of the cause of increased costs of housing in perspective and u i l l indicate areas of interest regarding policy to reduce housing costs.  Tables 10 and 11 provide a l i s t of prices of serviced lots  and the costs of construction based on material and labour for the period of 1964-1973. These figures are assembled in Table 12 uhich provides a breakdown of the relationship betueen the cost of land and the cost of construction deriving an estimated cost of a home. Between 1964 and 1973 the percentage of total cost of a single family dwelling related to the cost of construction steadily declined from 71% in 1970 to 49% in 1973.  The price of serviced land as a percent of the total  cost of housing has increased from 29% in 1964 to 51% in 1973.  The  most significant increase in the cost of a home was between 1972 1973.  and  The amount of the increase i s $12,965. 71% of this increase i s  attributable to land while only 29% of this increase is attributable to the increased cost of labour and materials.  It is most important  that one note these figures have no relationship to the market value cost of a single family dwelling.  These figures merely indicate an  effect of the market and not a cause. This confirms the theoretical analysis that the costs of land are a function of new house values which, in turn, are determined mainly, by the price of existing housing.  Construction costs, either  building costs or land costs, cannot materially affect the current general level of market prices. This logical conclusion i s related to the fact that the housing stock i s much larger than the increment to housing.  Relating this important realization to the cost figures  38 determined i n Table 12 the supply problem i s put into a t o t a l l y neu perspective.  39  Table,10.  Year  •  Cast of Construction of Single Family Duellings i n Metropolitan Vancouver 1960-1973 Cost/sq. f t . std 1200 f t . bungalou  Annual Material Dollar and labor cost Change  Annual % Change  Cost Index  1%  104.3  1,284  7%  113.2  14,988  984  7%  116.8  13.55  16,260  1/272  8%  128.1  1969  14.64  17,568  1,308  8%  141.0  1970  14.37  17,224  334  -2%  137.5  1971  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  1964  10.60  12,720  1966  11.67  14,004  1967  12.49  1968  Source:  -  Real Estate Trends i n Metropolitan Vancouver by the S t a t i s t i c a l Survey Committee of the Greater Vancouver Real Estate Board Association 1961 - 1973.  Table 11.  Average Cost rjf a Typical Serviced Lot i n The Greater Vancouver Regional D i s t r i c t 1964-1973 Price of Serviced Lot  -8%  5,810  749  14%  7,710  1,900  32%  9,600  1,890  24%  • 11,500  1,900  19%  20  0%  $ 5,061  1966 1967 .  1969 1970 .;;  '•'.'A  Annual % Change  411  1964  1968  Annual Dollar Change  11,520 .  +  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 the Planning Department of the GVRD 1973.  prepared by  rable 12.  /ear -  The Cast of Housing i n Greater Vancouver Regional D i s t r i c t i n Terms of Building Costs and Serviced Land Prices 1964-1973.  t o t a l Cast serviced land + labor + materials  Material & Labour as a % of Total Cost  Land as a % of Total Cost  Annual Percent change in t o t a l cost  Annual Dollar change in Total Cost  Change due to mat. & labor cost Dollars  %  Change due to 1 and cost  %  Dollars  1964  17,760  71%  29%  1966  19,814  70%  30%  11%  2,054  66%  1,355.64  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%  1,264.80  60%  1,897.20  1969  29,068  60%  40%  12%  3,208  40%  1,283.20  60%  1,924.80  1970  28,744  59%  41%  - 1%  324  100%  1971  30,540  56%  44%  6%  1,796  6%  107.76  94%  1,688.24  1972  33,932  56%  44%  11%  3,392  55%  1,865.60  45%  1,526.40  1973  46,897  49%  51%  38%  12,965  29% ., 3,755.65  71%  9,209.35  Source:  Tables 10 and 11  -  -  - 324  ^2  Footnotes  """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 Staff of the Greater Vancouver Regional D i s t r i c t Planning Committee, p. 12. i  k  Central Mortgage and Housing.Corporation Single Family Dwelling 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 , Population Forecast Vancouver GVRD Planning Department 1973. ^Population Forecast, Op. C i t .  7 Population Forecast, Op. C i t . fl  Population Forecast, Op. C i t .  43  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  Shortcomings of the supply of r e s i d e n t i a l duelling s i t e s have been documented c l e a r l y .  The increases i n the size of the e x i s t i n g  housing stock have not been s u f f i c i e n t to meet the demand expectations generated by net family formations region.  and net migration into the  It i s i n s t r u c t i v e nou to look at the supply side of the  supply/demand equation  i n 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 f o r r e s i d e n t i a l duelling units u i t h i n s p e c i f i e d time horizons.* S t a t i c Analysis of the Residential Duelling Unit Supply Process Vieued as a s t a t i c program frozen at any given point i n time, the p o t e n t i a l supply of r e s i d e n t i a l duelling units i n the region may be compared to mathematical sets (see Figure 3 ) . These sets or.} limitations are peculiar to the region under consideration. limitations may or may not occur i n other regions.  Such  Perhaps a s t r i k i n g  •These expectations do not take into account the limited expansion possible of the process of conversion of r e s i d e n t i a l duelling s i t e s to actual r e s i d e n t i a l duellings. Even i n an unlimited number of r e s i d e n t i a l duelling s i t e s available, there i s a f i n i t e capacity of the construction industry to build homes due to incipient shortage of materials, labor management and c a p i t a l .  FIGURE 3 Diagram of S t a t i c Analysis of Residential Duelling Unit Supply Process  example of such differences would be Houston, Texas, where the use of zoning by-laws precludes  the creation of development areas.  The major set i s the supply of urban designated the region at any given time.  non-  land within  This would be the acreage of land  either zoned for urban r e s i d e n t i a l usage or land which the  municipal  or p r o v i n c i a l authorities w i l l permit eventually 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 set would be the acreage designated land designated  as non-agricultural frozen  by the i n d i v i d u a l municipalities as s u f f i c i e n t for  each municipality's urban needs for the five-year period from to 1978.  These areas, as approved by the Land Commission  the Act on behalf of the Province of B r i t i s h Columbia, set  1973  administering the l i m i t s  beyond which development cannot proceed within the five-year time horizon, unless leakages occur in the conversion  of "frozen" farm  land into urban land. The  largest subset would be that acreage of urban land which i s  s u f f i c i e n t l y close to trunk sewers so as to permit development on an economically  sound b a s i s .  Someone, either the private developers  and/or the municipality concerned must underwrite the costs involved in providing l a t e r a l sewer l i n k s , water lines and roads to the land under consideration.  Although considered  a s t a t i c supply for the  sake of t h i s analysis, the number of acres varies as a direct r e s u l t of the r e l a t i o n s h i p between l o t prices, s e r v i c i n g costs and raw costs.  As l o t prices r i s e , i t may  land  become more f e a s i b l e to buy less  expensive land further away from the existing infrastructure and to incur the "higher costs of providing services to that land. this set, the supply of economically  Within  feasible land w i l l vary with  the price of l o t s which w i l l , i n turn, be a function of the r e l a t i v e  46  shortage of supply i n the existing and incremental, housing stocks i n relationship to e f f e c t i v e demand.  Thus, u i t h i n t h i s set, the  economic forces of the market could be at uork:- the supply of serviceable land u i l l increase i n relationship to the prices paid for the product, serviced land.  This analysis does not take into  the e x t e r n a l i t i e s uhich may  account  accompany this development of land further  auay from t h i s existing i n f r a s t r u c t u r e .  Examples of such external-  i t i e s uould be the provision of schools, longer a r t e r i a l roads  and  increased community services. The set of land, uhich i s economically feasible to service, i s further limited through the creation of a further subset or subsets of land u i t h i n the set of land uhich i s economically  feasible.  Municipalities i n the region designate "development areas" i n uhich the municipalities u i l l permit development to take place normally.  These  are circumscribed areas set out by the municipal planners i n consultation uith the municipal c o u n c i l . areas may cerned.  Furthermore such development  be given time horizon p r i o r i t i e s by the municipality conFar example, a municipality u i l l designate an area as Develop-  ment Area 1 i n uhich a certain l e v e l of i n f i l l i n g and development must be achieved before applications u i l l be considered for Development Area 2.  Such Development Areas usually, but not aluays, coincide  uith the municipality's scheme for providing the necessary structure to that area - p a r t i c u l a r l y seuage treatment The boundaries of these development areas may  or may  infra-  facilities.  not be f i n i t e .  In some instances, certain municipalities in the region may  consider  and approve applications for development from holders of parcels adjacent to or completely outside these development areas. and/or landowners may  Developers  be able to convince council that the advantages  W) to t h i s municipality of tying the non-designated parcel under consideration to the infrastructure could outweigh the disadvantages to the municipality.  The incidences of such leakage are reduced i n the  region, houever, due to the s p l i n t e r i n g of land ounership  patterns  uhich make assembly of a s u f f i c i e n t large parcel to j u s t i f y the additional o f f - s i t e costs uhich uould be incurred by the developer in tying the parcel outside the designated  area into the e x i s t i n g  infrastructure. It i s important to point out that the number of acres u i t h i n the subset of designated  included  urban areas i s not the sole deter-  minant of the number of r e s i d e n t i a l duelling units uhich may be supplied from the land i n t h i s subset. ment permitted be supplied.  The o v e r a l l density of develop-  u i l l a f f e c t the number of r e s i d e n t i a l units that could Such o v e r a l l densities are the subject of an i n t e r a c t i o n  betueen developers proposing projects and the municipality approving developments.  Some municipalities u i l l rely  zoning changes through land use contracts. single family density uere permitted  s o l e l y upon e x i s t i n g For instance, i f only  by the municipality concerned,  then the number of r e s i d e n t i a l duelling units p o t e n t i a l l y supplied uould be considerably uere  louer than i f multiple family or mixed density  permitted. Supply of Land  Assumed Density Factor  P o t e n t i a l number of r e s i d e n t i a l .units  Single Family  1000 acres  X  4/acres  =  4000 units  Mixed density  1000 acres  X  8/acre  =  8000 units  Multiple family  1000 acres  X  12/acre  = 12000 units  48 Given the set of acreage included u i t h i n this  designated  development area(s) times the average o v e r a l l expected density to be permitted  i n that area, consideration should be given to the l i m i t -  ations of the p o t e n t i a l number of r e s i d e n t i a l d u e l l i n g units to be supplied.  Due to l i m i t a t i o n s of land assembly u i t h i n the s p e c i f i e d  area there i s a subset of land u i t h i n the set of development  area(s)  uhich i s the land uhich can be assembled by private developers and/or public agencies.  This subset of assembled land may be as large as the  developable areas, but i n most instances i t i s much smaller. Parcels 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.  Many  parcels are "key" i n that the road patterns, sanitary and storm sanitary seuer pumping  stations,must  seuers,  be located on these parcels to  e f f i c i e n t l y service the area. F r i c t i o n s i n the assembly process a r i s e from a number of different f a c t o r s . 1.  Instrumental amongst these factors uauld be:  Landowners' unuillingness to s e l l due to misplaced  expectations  that land may be e l i g i b l e for a higher and better use than that designated.  Far instance, owners often f e e l that t h e i r land i s sutiable  for multiple family use rather than single family. often may have been generated from observations  Such  expectations  of "leakages" from one  zoning category to another as promoted by developers and fostered by the approving municipality. 2.  Landowner reluctance to s e l l out to t h e i r preference  to con-  tinue enjoying the use bo which the land i s presently put i n spite of the lure of monetary rewards.  For instance, many smaller acreages  are held by older people who want to "last out t h e i r days on the land". Many farmers wish to continue farming on the land presently under their c o n t r o l .  k3 3.  Presently, use of a p a r t i c u l a r parcel may be higher and better  than the use to uhich the developer could bring to the surrounding parcels.  For instance, a chicken farm on motel or, most commonly,  an expensive  or series of expensive  homes may preclude assembly of  an entire tract at an o v e r a l l price permitting economic development. One p a r t i c u l a r l y vexing problem i n the Greater Vancouver and Louer Fraser Valley region i s the predominance of expensive  homes on one  and tuo acre s i t e s . h.  Landouners i n f l a t i o n a r y expectations have been fueled by the  rapid price increases i n the region. at a l l , landouners  Reluctant to s e l l their land  often price the land at levels uhich discount  i n f l a t i o n a r y expectations f a r into the future. 5.  Landouners often distrust p a r t i c i p a n t s i n the r e a l estate  industry.  These landouners  adopt the attitude of "burying their head  i n the sand" and refuse to even discuss the p o s s i b i l i t y of s a l e . The coincidence of these parcels uithheld r i s e s almost geometrically u i t h the number of landouners uhose land uas to be assembled in a given area.  In p r a c t i c a l terms, the assembler knous that he u i l l  run into.a greater resistence i n gathering together t h i r t y acres from ten separate landholders than i n putting together a comparable thirty-acre parcel held by three ouners. The value of existing structures usually r i s e s s i g n i f i c a n t l y uhen a greater number of landholders hold a given acreage.  In the  previous example, i t may be that there are ten or more homes placed on the t h i r t y parcel held by ten landouners  uhile only three homes  may be on the comparable thirty-acre p a r c e l . In aggregate,  the combined effect of s p l i n t e r e d  landholdings  and/or holdouts are considerably important uhen considering the  50 potential supply of r e s i d e n t i a l duelling units u i t h i n the region. It may  be possible u i t h i n a limited time horizon to assemble a l l or even  a s i g n i f i c a n t portion u i t h i n a designated urban development area, but, i f such i s not the case, the r e s i d e n t i a l duelling supply pipeline becomes constructed at the outset.  The e f f e c t i s most pronounced i f  the municipality holds the boundaries of the development area constant and does not permit s i g n i f i c a n t "leakages" of p o t e n t i a l developments from outside the development areas. Dynamic Analysis of the Residential Unit Supply  Process  Given the pool of potential r e s i d e n t i a l duelling s i t e s as indicated by s t a t i c analysis, i t i s nou necessary to turn to a dynamic analyses of the production process over time to determine 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.  the Fore-  most amongst the c r i t e r i a uith uhich to judge the process u i l l be the time required to bring r e s i d e n t i a l duelling units to market and the a t t r i t i o n i n numbers of duelling unit s i t e s uhich never can come to market or uhose production u i l l be delayed beyond normal expected time horizons. to  It i s one thing for developers and/or public agencies  have rau land i n inventory and quite another for these rau acreages  to be transformed into serviced building s i t e s ready for r e s i d e n t i a l construction.  Figure 4 sets out the dynamic process i n s i m p l i f i e d  diagramatic form. The time taken for the conversion of rau land into serviced r e s i d e n t i a l s i t e s can vary considerably from municipality to municipality  in the region.  The time taken to bring serviced r e s i d e n t i a l  building s i t e s to market can also vary considerably u i t h i n a municipality  from decade to decade.  Time taken can be broadly broken doun  into time spent on three functions:-  51 FIGURE k Diagram of.Dynamic Analysis of Residential ' • r Duelling Unit Supply" Process.  Duelling unit construction  A  Subdivision construction and/or site servicing  A  c •  •c D  • H  • H  uc  - P  a  +5  c  a  f4-  Ol C . • H  cn to CO  u  uco •a  cn ca  A  G -  CQ  cn cu • P ai c -P n cn aix: c cn • H zi r-\ a  Dl C • H  cn co  CO  tn tn ra  xa E -P n c C QJ E c a. • H  PL  a rH  tn co ain c>o  _ l TP  E c to D cn tn ra U • H  - P  TJ  c  CO  03 Fn  Cf-  c  •  a •rl  =1 FH - P  cn c: o  u  •rH  time  cn c  a. •rH  - P  Guiding the development through the municipal approval process  c  • 3  rH rH CO - C 3 -P  attrition tn in numbers a 0)  XI  A  Q] U C CO •rH 3  E -a a fH  tier  co  a JZ  tn  .Y  rati_ co -p E •rH  a  <7 Assembly of rau land  1.  The assembly of rau land  2.  The municipal approval process  3.  The construction process uith regard to servicing the duelling s i t e .  ;  Rau land assembly i s a process that may or i t may  happen quite quickly  be draun out over a considerable period of time.  It may  be that the developer and/or public agency has s u f f i c i e n t land i n inventory uhen the creation of a development area i s announced by the municipality.  It may  be that an experienced assembler can put together  a parcel s u f f i c i e n t l y large for development u i t h i n a matter of ueeks. In most instances houever, land assembly in the the region i s a slbu, f r u s t r a t i n g task uhich takes at least several months and even may  last  for years. Competition betueen the developers i s intense. developers may  be uorking on an area simultaneously.  A number of  Each may  acquire  c r u c i a l "key" parcels, f r u s t r a t i n g the attempts of the others.  Often,  long periods of intensive negotiation betueen the developers u i l l  de-  termine uhich de.veloper(s) end up uith the developable package. A l l assemblies are subject to the time consuming problem of dealing u i t h "holdouts".  It may  be i n the end, that their e f f o r t s come to naught.  Competition amongst the developers i s not of interest for the c r u c i a l question i s the number of rau s i t e s uhich may gether i n aggregate that there may in assembling  by a l l the p a r t i c i p a n t s .  be gathered to-  The point to note i s  be considerable delays encountered the land due to competition among  by the participants themselves.  The time taken to guide subdivisions and/or multi-family building s i t e s through the municipal approval process i s the c r i t i c a l element i n the time taken to convert rau land into 'serviced building  53 sites.  The number of interactions betueen the developer and the  municipality are steadily increasing and the issues are becoming more complex as urban areas expand and encounter grouth.  problems inherent uith  The subdivision approval process of the Borough of Scarborough  as outlined by Andre Derkouski''* indicates that there are 90 agencies that may  have a voice i n the process of development approval.  The  process of approval i s being constrained by the multitude of issues uhich arise i n the cases of equating s o c i a l costs uith private 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 generally those concerned  uith the impact of  additions to housing stock i n the existing housing stock and the tradeoff of the increased costs of development imposed upon the municipality vs the benefit of municipal population grouth. The f i n a n c i a l position of municipalities and the role of the p r o v i n c i a l government has an important impact upon the time required i n process of approval.  In cases uhere municipal budgets are not capable  of incurring additional development, the incentive of the municipality to reduce the time required for approval does not e x i s t .  In some  cases the time created by a slou approval process i s an asset to the municipality i n the respect that i t may  require the additional time  to determine the optimal type of development given i t s f i n a n c i a l position or succeed i n impressing the p r o v i n c i a l government that a serious municipal finance s i t u a t i o n e x i s t s . The planner also has an important role regarding the e f f i c i e n c y of the dynamics of the approval process.  A comprehensive plan related  to the f i n a n c i a l position of the municipality and the optimal development s i t u a t i o n required i n order to s a t i s f y the municipal budget  54 provides the superstructure  in which the planner may  introduce his  concepts regarding the services that are required i n the development of a municipality.  The approval process must function u i t h i n 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.  I f the engineer or school board or other various a u t h o r i t i e s  involved i n the approval  process are not cognizant  of an o v e r a l l  .municipal planning p o l i c y with s p e c i f i e d objectives, the  approval  process•is burdened,as various authorities attempt to r e l a t e their function of approval The  to the undetermined p o l i c y .  l o c a l p o l i t i c i a n also has an important function  the time required for approval process.  regarding  There i s a very important  trade-off between the t e c h n i c a l assets or disadvantages of a development and i t s impact i n the p o l i t i c a l environment i n the community. The primary concern of the l o c a l p o l i t i c i a n i s to observe that the ratepayer  i s not being harmed by a development in respect that public  and s o c i a l costs created by a development do not exceed the benefit to the community as a whole.  Some of the considerations that the  p o l i t i c i a n would take into account are:  • .  1.  Tax burden of e x i s t i n g residents  2.  Resistence  3.  Environmental costs  4.  Desire of residents to upgrade the q u a l i t y of r e s i d e n t i a l units by encouraging consumers.of a high income scale  5.  Resistence  of residents to growth'in  . population  to increased density (multi-family projects)  These are a few of the constraints that can be imposed on the  supply  of housing units in the dynamic process of subdivision approval.  The  55  direct  results  uould be a decrease i n the number of r e s i d e n t i a l  brought on the market and i n c r e a s e s i n the time taken to  units  obtain  approval. The s u b d i v i s i o n not unduly usually  constricting  construction  stage of the dynamic process  i n terms of t i m e .  Servicing  of land can  be accomplished i n three to s i x months given normal c o n d i t i o n s .  M a t e r i a l shortages are houever,  a problem at c e r t a i n t i m e s .  IMo  a t t r i t i o n s i n supply occur i n that no d u e l l i n g s i t e s uould be at t h i s  lost  stage. Duelling unit construction  unduly  is  critical.  Residential duellings  nine months to complete.  duelling units  usually  take from three  to  Completion periods can be lengthened through  shortages of labor and m a t e r i a l s . residential  time lags do occur but are not  IMo a t t r i t i o n i n the number of  occurs at t h i s  stage.  56  Footnotes  ^Andre Derkouski, Residential Land Development i n Ontario, A Report prepared by the Urban Development Institute of Ontario, November, 1972.  57  CHAPTER V  RDLE OF PUBLIC COMPANIES IN CANADIAN RESIDENTIAL DEVELOPMENT P u b l i c companies have emerged i n the past decade as a r a p i d l y i n c r e a s i n g f a c t o r i n the r e a l e s t a t e i n d u s t r y i n Canada. Table 13 i n d i c a t e s the approximate number of r e a l e s t a t e companies o f f e r i n g s t o c k i s s u e s f o r the f i r s t time and the t o t a l d o l l a r amount of e q u i t y f i n a n c i n g s completed by neu e n t r a n t s and/or e x i s t i n g companies d u r i n g the years I960 to There are inadequate  1973.  s t a t i s t i c a l r e c o r d s a v a i l a b l e to de-  termine the exact e x t e n t of the p u b l i c companies' r o l e i n the p r o v i s i o n of r e s i d e n t i a l d u e l l i n g u n i t s .  I t i s a l s o d i f f i c u l t to  a t r u e p i c t u r e of the r e l a t i v e importance  develop  of the p u b l i c and p r i v a t e  companies i n p r o v i d i n g h o u s i n g . P u b l i c company c o n c e n t r a t i o n s i n terms of b u i l d i n g  starts,  d o l l a r volumes or any other r e p r e s e n t a t i v e a c t i v i t y vary from area to area and from c i t y to c i t y .  For i n s t a n c e , to date t h e r e i s no r e c o r d  of p u b l i c a l l y f i n a n c e d b u i l d e r s i n the M a r i t i m e s , but t h i s category of b u i l d e r p l a y s and important p a r t i n the C a l g a r y market. p u b l i c companies accounted s t a r t s i n Calgary.  The  In  1971,  f o r 43.3% of s i n g l e and semidetached  important p o i n t to remember i s t h a t t h e r e  uere no b u i l d i n g companies u h i c h uere p u b l i c a l l y f i n a n c e d , opera t i n g i n C a l g a r y i n the e a r l y 1960's.  The  change r e p r e s e n t s a  c o n s i d e r a b l e d i f f e r e n c e i n the r e l a t i v e importance  of the p u b l i c and  Table 13.  Annual Equity Financing by Public Real Estate Companies  -1973  1972  1971  1970  1969  Number of new companies  0  1  1  2  35  Total amount of equity financing (fMillion)  0  5  7  2  103  Source:  1968  8  1967.  1966  2  63  1960-1973 1965  1964 1963  1  0  7  0-  1961.  1960  14  Financial Post Corporation Service, Record of IMeu Issues.  CD  59  private builder i n Calgary during the past feu years.  Similar trends  may be observable i n other c i t i e s . /Price  (1970) painted to the acquisition of a steady supply  of building s i t e s as the important factor determining the maximum economic size of a building firm i n the Vancouver region. It has been generally noted that ensuring a steady supply of • land i s almost no problem for the smallest builders, and steadily increases as the builder's volume grous. Therefore, any situation uhich s i g n i f i c a n t l y increases the d i f f i c u l t y , and hence the cost, of assembling suitable volumes of land i s certain to louer the maximum economic size of a building firm. The result i s that i n some c i t i e s uith the right combination of l a n d . a v a i l a b i l i t y , market size and demand, and entrepreneurial talent, the maximum size i s about 750, i n other areas i t i s about 250, uhile i n Vancouver, largely because i t i s a land-poor area, the maximum size i s around : 100 units per year.- :  1  The  role of the public company i n r e s i d e n t i a l land develop-  ment i s even more d i f f i c u l t to document.  S t a t i s t i c s documenting  sales of serviced building s i t e s are often lacking.  Where numbers  are reported, i t i s d i f f i c u l t to separate out uhich sales, uere made to non-related'companies and uhich sales uere made to interrelated • companies for the provision of duellings. dential duelling s t a t i s t i c s as incorporated  Working from the r e s i i n company sales, i t i s  d i f f i c u l t to sort out uhich s i t e s uere company developed and uhich s i t e s uere purchased from other supplies. Industry observers dD point, houever, to the increasing of the public companies i n financing land inventories.  role  Large i n -  ventories of land are necessary i f developers and/or builders are to be able to plan ahead, so as to reduce uncertainties.in the ability, to supply a steady flow of serviced s i t e s and r e s i d e n t i a l duellings, achieve planning e f f i c i e n c i e s and economies of scale.  GD Companies cannot expand t h e i r scale of operations without some clear view as to how  they w i l l achieve such expansion.  These  large land inventories require substantial equity financing^ requirements, furthermore, are on the increase as raw climb upwards.  land prices,  Thorsteinson of Richardson Securities points to  this trend. .,  Equity  With the scale and complexity of r e a l estate development in Canada increasing, the corporation i s emerging as the most suitable form of business organization. The size and number of r e a l estate companies seeking public financing w i l l increase in the years ahead. 2  61  Footnotes  Price, Edmund V. The Housebuilding Industry i n Metropolitan Vancouver. Unpublished Master of Business Administration thesis, University of B r i t i s h Columbia, 197D. Thorsteinson, A m i C. Selected Real Estate Stacks. Unpublished report by Richardson Securities of Canada, November, 1971.  62  CHAPTER UI  EVALUATION OF LAND INVENTORIES HELD IN THE GREATER VANCOUVER REGIONAL DISTRICT AND LOUER FRASER VALLEY BY MAJOR DEVELOPERS EXAMINATION OF THE EMPERICAL RESULTS OF THE QUESTIONNAIRE  Questionnaires uere distributed to f i f t e e n developers uhich uere generally knoun to represent the major r e s i d e n t i a l land holdings in the area.  Tuelve companies replied for a response ratio of 8/10.  The tuelve companies responding anticipate production of approximately 5,000 units i n the year from September 30, 1973 to September 30, 1974 (see Table 19). This figure i s roughly a t h i r d Df the average number of r e s i d e n t i a l duelling starts i n the four years - 1970 through 1973 (see Tables 8 and 9). Three companies did not respond to the questionnaire. These companies are knoun to oun and control p a r t i a l l y or completely someuhere betueen seven hundred and f i f t y to nine hundred acres i n the area. acres.  The tuelve companies reporting held an aggregate of 4,457.09  If the three companies had reported, the acreage sample size  uould have increased by some 17% to 20% to betueen 5,200 and 5,350 acres. Total Acreage Held by Responding Developers for the Provision of Residential Duelling Units The developers uere asked to reply to the follouing question:  63  "Approximate t o t a l acreage h e l d by company f o r the p r o v i s i o n of r e s i d e n t i a l u n i t s i n the G r e a t e r Vancouver and Lower F r a s e r V a l l e y areas as at September 3D, 1973" Table 14 t a b u l a t e s the r e s u l t s .  Table 14.  T o t a l Acreage and Average P a r c e l S i z e of I n v e n t o r y Held by Responding Developers  T o t a l acreage h e l d by t w e l v e companies r e p l y i n g f o r p r o v i s i o n of r e s i d e n t i a l units Average i n v e n t o r y s i z e f o r the p r o v i s i o n of r e s i d e n t i a l u n i t s - t w e l v e companies replying -  4,457.D9 acres  371.4 a c r e s  As i n d i c a t e d by the r e s u l t s , the average r e s i d e n t i a l acreage i n v e n t o r y f o r the p r o v i s i o n of r e s i d e n t i a l u n i t s i s not unduly l a r g e . In f a c t , the t o t a l acreage h e l d by the twelve companies f o r the p r o v i s i o n of r e s i d e n t i a l d w e l l i n g u n i t s i s not l a r g e at a l l . C o n s i d e r the  acreage h e l d by p u b l i c companies i n o t h e r s e l e c t e d urban c e n t r e s  i n Canada.  Although t h e r e i s no breakdown as to the u l t i m a t e use  of the acreage nor the d e n s i t y of development  i t may be assumed t h a t  the major p o r t i o n s of the i n v e n t o r y w i l l be used f o r r e s i d e n t i a l housing. Table 15 s e t s out comparisons between urban c e n t r e s .  Rau Land Inventories i n Acreages for Representative Major Public Companies in Selected Urban Areas of Canada - Based on 1972 Annual Reports of Reporting Companies  Table 15.  Toronto Company A  4,512  Montreal 35  Vancouver  8  Company B  370  Company C  20D  Edmonton  120  58  Calgary 72  2,188 325.  Company D Company E  1,171  Company F  77  Company G  Undifferentiated as to location  Totals  134  4,989  267  637  4,168  6,556  6,675  7,0000 1,171  1,705  436 69  610  2,218 6,115 .  5 /436 2,000  Company H Company I  Ottaua  2,000 ' 623  623  Company J  62.5  62.5  Company K  26.0  26.0  65  Number and Size of |\lon-Adjoining Parcels Held by Developers i n Inventory Respondents uere asked to d e t a i l number and sizes of nonadjoining parcels.  For the purpose of this survey,  non-adjoining  parcels uere defined as geographically separate parcels rather than legally separate parcels, to prevent confusion i n the cases where assemblies of land would be composed of a number of adjacent with separate  legal descriptions.  parcels  Eleven of the twelve- respondents  answered this section. The number of parcels held by a l l twelve developers  totalled  seventy-seven, or an average of 6.41 separate parcels in each land inventory.  The largest holding reported was 2DDD acres.  largest was 317 acres.  The second  The average size of a l l the largest holdings  reported by eleven developers reported was D.5 acres.  was 88.5 acres.  The smallest parcel  The average of the smallest parcels for  eleven developers was 6.18 acres. The small number of 6.41 separate parcels held on average by each of the developers to concentrate  indicates a desire on the part of developers  their efforts on a small number of geographically  separate parcels.  This could be explained, i n parti/, by the  developers' reluctance to spend an undue amount of time t r a v e l l i n g between different s i t e s . The t o t a l number of separate parcels held at a count of 77 i s quite surprising i n view of the multitude  of potential development  s i t e s i n the Greater Vancouver and Louer Frase<r Valley areas.  This  i s i n effect a r e f l e c t i o n of the developers' a b i l i t y to uncover or assemble larger blocks of land.  It i s also confirmation of the  desire not to s p l i n t e r holdings. Geographical Distribution Table 16 indicates the geographical d i s t r i b u t i o n of the lands held by the tuelve companies reporting. As uould be expected approximately 65% of the land uhere development i s anticipated u i t h i n f i v e years i s distributed u i t h i n the Greater Vancouver Regional D i s t r i c t and approximately 35% u i t h i n the Louer Fraser Valley outside the G.V.R.D. Apart from a 317 acre parcel at Mission and a 2000- acre parcel at Langley, none of the companies seem to be assembling large blocks, of land i n the Louer Fraser Valley i n the hopes of promoting a "neu town."  Perhaps the lesson of premature inventory accumulation *  has been learned i n that the 2Q0D acre s i t e i s nou.classified as permanent a g r i c u l t u r a l land. Surrey i s the leading municipality i n terms of land inventories held by these major developers.  There are 755.9 acres or 35.4% of  the net acreage held for development u i t h i n the next five years u i t h i n this one municipality. This confirms that commonly held vieu that Surrey u i l l be the action centre for development u i t h i n the next five years, apart from the plans for the development of ••the. North Shore of Port Moody. Vancouver and Burnaby do not account for s i g n i f i c a n t portions of the result as i n f i l l i n g has almost completely depleted the rau land i n these municipalities.  Land held by developers uould as l i k e l y  67 Table 16.  Geographical Distribution of Land Holdings Throughout Greater Vancouver and Lower Fraser Valley. Aggregate Figures for a l l Twelve Companies Reporting - a l l Uses, * ; I n c l u d i n g Residential  :'  r  \ ' .' 'v  Gross Acreage  Area  -•• j'  '  '  ^  •  9.36  '•' 0.4%  Burnaby  55.78  55.78  2.6%  Richmond  175.06  175.06  Delta  453.00  153.00  7.1%  • Surrey  755.90  755.90  35.4%  142.00  142.00  6.7%  7.50  7.50  2,099.78  99.78  4.7%, , 2.9%  Coquitlam Port Coquitlam Port Moody Langley  ^  "•'  Abbotsford Matsqui  64.00.  64.00  > Maple Ridge P i t t Meadows  131.00 ,  112.00  IMorth Vancouver West Vancouver ' " '.  '  . ' :  •  •  8.1%  ' 0.3%  '•'  '  V  Percentage of t o t a l net acreage  9.36  Vancouver  •' -"'  Net * Acreage  •  •.  5.3% ,  97.15  97.15  4.6%  Mission  317.00  317.00  14.9%  Other  150.28  150.28  7.0%  4,457.09  2 ,138.81  TOTAL  Excluding parcels where development i s not anticipated for at least five years.  be held for redevelopment l/ancouver/Burnaby  as development.  The significance of the  inventories uould increase someuhat i f potential  duelling units uere to be counted i n that the proposed densities  -  :  uould most l i k e l y be higher than surrounding municipalities. Land uhere production starts uould be delayed beyond five years, from the date of t h i s survey uere a r b i t r a r i l y treated as land bank inventory of a tenuous nature uith respect to the provision of duelling units.  In most instances, such holdings uere either "frozen"  a g r i c u l t u r a l land under the provisions of the Land Commission Act or lands uhere municipal policy uould preclude' development for at least five years, i f not longer.  It may be that land in this category  may eventually be* the basis for providing duelling units, but foreseeable increments to the housing stock could not be counted upon. Developers' Explanations as to Why Land Held in Inventory uas not Being Serviced and/or Residential Construction Was Not Under Way at the Time of the Survey The developers uere asked to choose from possible reasons to explain uhy the land in inventory uas not in production at the time of the survey.  In each, the developer uas asked to c i t e the single  most important reason, even though there may be several reasons operative, at any one time.  The possible choices uere placed alongside  each time horizon so that the developer could c i t e his reasons as to uhy land not to be developed for a certain number of years uould take that period of time before servicing and/or construction could start.  Table 17 sets out the r e s u l t s . Developers predominately chose municipal policy as the single  most important reason uhy development uas not i n progress at the time  69/ Table 17.  Most Important Single Reason Uhy Inventory not Being Serviced and/or Residential Construction i n Progress IMou. Reasons as Selected by Developers Surveyed  Time Horizon  Subdivision servicing and/or r e s i d e n t i a l construction to begin within one year from September. 3D, 1973  Most important single reason  IMumber choosing reason  Lack of adjacent services Municipal policy Corporate Policy . Market not yet ready for this type of r e s i d e n t i a l unit i n this area  / 1 8 .2  0  Other - Building i n immediate area Subdivision servicing and/or r e s i d e n t i a l construction to begin later than one year from September 30/73 but before tuo years  ..Lack of adjacent services  1 2  Municipal policy  4  Corporate Policy  1  Market not yet ready for this type of r e s i d e n t i a l unit i n  Subdivision servicing and/or r e s i d e n t i a l construction to begin later than tuo years from .September 30/73 but before five years  Subdivision servicing and/or r e s i d e n t i a l construction to begin later than five years from. September 30/73  this area  0  Other  0  Lack of adjacent services  1  Municipal policy  4  Corporate policy  0  Market not yet ready for this type of r e s i d e n t i a l unit i n this area  0  Lack of adjacent services  0  Municipal Policy  2  Corporate policy  .0  Market not yet ready for this type of r e s i d e n t i a l unit i n this area Other - Provincial land freeze  0 1  70 of the questionnaire.  Uith respect to land inventory uhich the  developers f e l t uould come on stream u i t h i n one year, eight of tuelve or 75% of the responses cited municipal p o l i c y .  Developers eval-  uating the land inventory uhich they f e l t uould be subject to starts u i t h i n tuo years posted four out of five responses as municipal policy.  Even longer term land inventory uhere developers f e l t that  the land uould not come on stream for at least five years uas subject to the same selection of most important reason.  Tuo out of three .  responses l i s t e d municipal p o l i c y . Young (1974) documents the lengthening time taken ,for munic i p a l subdivision approval i n the Greater Vancouver Region.  Chapter ,  VII outlines the process uhereby municipalities set aside s p e c i f i c areas as development areas i n order to control urban grouth. i t i s beyond the scope of this thesis to verify f u l l y  Uhile  the correctness  of the developers' contentions, there i s no question as to the point of vieu held by the developers uith respect to l i m i t a t i o n s i n the supply of serviced duelling s i t e s and/or residential.construction. Most Probable Uses for Land Inventories Held Participants uere asked to reply to a question detailing their expectations as to the most probable use f o r land i n their i n ventories.  Replies uere to be given i n acreages uith density fore-  casts i n terms of anticipated number of r e s i d e n t i a l units per acre in,those instances uhere r e s i d e n t i a l use uas scheduled. sets out the r e s u l t s . . ,  Table 18  Table 18. :  '•  Developers' Expectations as to Most Probable Uses for Their Land Inventories - Aggregate Figures for a l l . Tuelve Developers Reporting Total acreage  \  Single Family  1,899.48 acres  Anticipated number of r e s i d e n t i a l units per acre  Total number of anticipated residential units 7,161 units  3.77 unit/acre  252.18 acres  14.8 unit/acre  3,732 units  Apartment  71.86 acres  60.75.unit/acre  4,365 units  Mobile home parks  36.50 acres . 6.  Commercial  61.28 acres  Multi Family  Recreational Mixed usage  '.i  -  3.65 acres  Industrial . .  •  219 units  •. -  -••  ' .  -  134.70 acres 2,000.00 acres  units/acre  Unable to a n t i c i pate at this time Development too f a r i n future :  TOTALS  15,477 units  .4,459.65 acres ••'  Estimated Time Before Subdivision Servicing and/or Residential Unit Construction to Begin The intent Df this section uas to determine the potential capacity of the developers surveyed to produce serviced s i t e s and/or r e s i d e n t i a l housing u i t h i n certain time horizons.  Rau land i s not  the same as serviced building s i t e s , nor are serviced building s i t e s the same as r e s i d e n t i a l duelling units. takes time to accomplish.  Each step i n the process  Given that very feu more r e s i d e n t i a l units  could be brought on stream by the developers surveyed before the end. of the year than those i n production nou, the f i r s t time horizon uas set as'present construction.  Developers uere asked to report on the  number o f s i t e s and/or units i n production at the time of this  -72 survey (see Table 19). Given that developers must acquire land far i n advance of . production i n order to complete assembly and to put the development through the municipal approval process the second time horizon uas set at one year.  Developers uere asked to set out the acreage and  number of units that they anticipated mould be i n construction (either subdivision servicing and/or r e s i d e n t i a l construction) u i t h i n .one year from the date of this survey.  Due to the lead times required  by the developer as described above, this production uould represent f a i r l y u e l l a l l the production that these developers could be counted upon to produce  i n that year.  Neu land purchases uould most l i k e l y  not be able to make i t through the various steps i n the municipal approval process uithin that time.  The number of units scheduled  for production u i t h i n one year i s also a f a i r indicator of the productive capacity of the developers surveyed. The longer time horizons uere designed to separate out that portion of the land developers' inventory uhich could be counted as inventory for immediate production and that uhich could be counted as longer term land bank type holdings.  As indicated, immediate  production for a developer requires rather a longer lead time than that i n many other industries.  The time required to complete land  assemblies and to guide the development through the municipal approval process set the perimeters for this lead time. From the point of, vieu of increments to the supply of housing stock, i t i s important to note that, even i f subdivision servicing  :  and/of r e s i d e n t i a l construction uere to begin u i t h i n tuo years, actual duellings may not come ,to market for a period of up to eighteen months after such a beginning.  This second time period uould be the time  Table 1 9 .  Developers E x p e c t a t i o n s as to Time Before S u b d i v i s i o n and/or R e s i d e n t i a l U n i t C o n s t r u c t i o n to" Begin on Lands Held i n I n v e n t o r i e s - Aggregate F i g u r e s f o r a l l Tuelve Developers Reporting  Land i n i n v e n t o r y f o r  1  Acreage  production  IMumber of r e s i dential units to be provided  S u b d i v i s i o n s e r v i c i n g and/or r e s i d e n t i a l c o n s t r u c t i o n i n progress at time of survey  377.81  2,603  S u b d i v i s i o n s e r v i c i n g and/or r e s i d e n t i a l c o n s t r u c t i o n to begin u i t h i n one year from September 30, 1973  679.54  5,-020  S u b d i v i s i o n s e r v i c i n g to begin l a t e r than one year from September 30, 1973 but before tuo years  467  2,530  Subtotal Land i n i n v e n t o r y f o r  1,524.35 Acreage  land banking  S u b d i v i s i o n s e r v i c i n g and/or r e s i d e n t i a l c o n s t r u c t i o n to begin l a t e r than tuo years but before f i v e years from . September 30, 1973  535 acres  S u b d i v i s i o n s e r v i c i n g and/or r e s i d e n t i a l c o n s t r u c t i o n to begin l a t e r than f i v e years from September 30, 1973  2,319 a c r e s  10,153 IMumber^ of r e s i dential units to be provided  2,265  1,275 r e s i dential units estimated f o r 319 acres IMo estimate ' made f o r 2000 acres  . A r b i t r a r y d i v i s i o n i n t o land h e l d f o r land banking e x p l a i n e d i n t e x t .  i n v e n t o r y and land h e l d  for  74 r e q u i r e d f o r the d e v e l o p e r or n o n - a s s o c i a t e d construction.  Therefore,  l a n d i n v e n t o r y on uhich s t a r t s may  u i t h i n tuo y e a r s s h o u l d not be c o n s i d e r e d  uhere p r o d u c t i o n  s t a r t s uas  survey. not f o r s e e n f o r tuo  more y e a r s from the date of the survey uere c o n s i d e r e d inventory.  begin  as i n c r e m e n t s to the housing  s t o c k f o r a p e r i o d up to t h r e e y e a r s from the Holdings  b u i l d e r to complete  or  as l a n d bank  T h i s i s not to say t h a t t h i s l a n d u i l l not be  converted  intD s e r v i c e d l a n d ready f o r d u e l l i n g u n i t s sometime i n the f u t u r e . Furthermore, i t i s not t o say t h a t t h i s l a n d banking i s not n e c e s s a r y for  the d e v e l o p e r i f he i s to r a t i o n a l l y p l a n h i s p r o d u c t i o n .  s i m p l y t D say t h a t t h i s l a n d s h o u l d not be c o n s t r u e d increments to the housing s t o c k u i l l be c o n s t r u c t e d  It is  as l a n d on uhich i n the immediate  future. Developers' Responses R e l a t i n g to Most V a l u a b l e P a r c e l s i n T h e i r I n d i v i d u a l I n v e n t o r i e s u i t h Respect, to the P r o v i s i o n of R e s i d e n t i a l Duelling Units . Developers r e s p o n d i n g to the q u e s t i o n n a i r e uefe asked to s e l e c t the f o u r most v a l u a b l e h o l d i n g s i n t h e i r i n v e n t o r i e s u i t h r e s p e c t  to  the p r o v i s i o n o f r e s i d e n t i a l h o u s i n g .  to  p o i n t out to the d e v e l o p e r s  I n s t r u c t i o n s uere p r o v i d e d  t h a t a p a r c e l by t h i s d e f i n i t i o n  should  i n c l u d e b l a c k s o f l a n d u h i c h u i l l be developed as a u n i t , r a t h e r than l e g a l l y separate p a r c e l s uas  parcels.  The  s o l i c i t i n g o f i n f o r m a t i o n on  individual  p a r t i a l l y a check on the summarized i n f o r m a t i o n t h a t each  d e v e l o p e r s u p p l i e d on h i s master sheet i n the q u e s t i o n n a i r e and  partially  an e x e r c i s e to o b t a i n more d e t a i l e d i n f o r m a t i o n on i n d i v i d u a l p a r c e l s in  the d e v e l o p e r s ' The  inventories.  tuelve developers.in  aggregate r e p o r t e d on 37, p a r c e l s r a t h e r  than the forty-eight that mould have been expected.  The 37 parcels  t o t a l l e d .1855.55 acres uith an estimated net developable acreage to the order of 1720 acres.  Results indicated i n the follouing sections  are cumulative results for the 37 parcels reported. On average, the 37 parcels uere 0.25 miles from trunk seuer. This confirms the observation that Moore (1972) made on developer behaviour indicating preference for land close to trunk seuer.  On  average, the parcels uere 0.123  0.23  miles from main.uater  lines and  miles from presently developed areas. Respondents reported on the estimated year of development for the 37 parcels i n question.  Indications uere that 3 Df the 37 uere  under development or scheduled for development i n 1973., A further 15 uere scheduled for 1974 and an additional 6 for 1975.  Tuo parcels uere  programmed for development over a tuo year time horizon from through 1975.  1974  Taking these parcels only into account, i t appears  that at least 26 out of 37 or approximately 70% of the parcels, uere . slated for development u i t h i n tuo years of the date of the survey. Table 20 indicates the estimated year of development. Developers reported that 12 of the 37 parcels uere acquired in the year of the survey - 1973.  A further 10 out of 37 uere ac-  quired i n 1972 and 7 out of 37 i n 1971.  In t o t a l , therefore, 29 of  the 37 parcels or 78% uere acquired i n the tuo years prior to the survey*  The remaining parcels uere acquired at various times from  through 1970.  1962  Table 21 indicates the year of acquisition.  Comparing the year of acquisition s t a t i s t i c s to the estimated year of development s t a t i s t i c s confirms the vieu that developers in the region dd not normally build up land inventories i n uhich , ;  estimated time.to commencement of development greatly exceeds the  76 Table 2 0 .  E s t i m a t e d Year of Development as S e l e c t e d by Developers  E s t i m a t e d year o f development 1973  Number o f p a r c e l s to be developed  .  3  1974  15  1975  6  1976  2  1977 1978  1 3  1973-1975  1  1974-1975  ?.  1974-1976  ' 2  1974-1982  1  1976-1977  1  Total  Table 2 1 .  'Most V a l u a b l e ' P a r c e l s '  Year of A c q u i s i t i o n by Developers  Year Of A c q u i s i t i o n  37  'Most V a l u a b l e ' P a r c e l s as S e l e c t e d  Number of P a r c e l s A c q u i r e d  1973  12  1972  10  1971  .  7  1970  2  1969 ,  2  1968  0  1967  2  1966  0  1965  0  1964  0  1963  1  1962  1 Total  37  time actually required to bring the development to a point where construction may be started.  Developers seem to have c o l l e c t i v e l y  evolved a pattern whereby the time elapsed from inception of assembly or acquisition to f i n a l sale, does not exceed four years at the maximum.  In fact, i t may be seen that a s i g n i f i c a n t proportion of  the parcels were acquired i n 1973 for development i n 1974 i f possible. The average cost Df acquisition per acre for the 37 parcels uas $59,431.  The average estimated market value at the time of the  survey was $77,878, a 31% increase over average cost.  No attempt was  made to s p l i t the increment i n value into value added by the developer through construction, provision of services, incurring of financing costs, capitalized management costs and the unearned increment due to the r i s e i n the land values during the past few years.  IMo consider-  ation was given to the length of holding periods for the i n d i v i d u a l parcels so that an annualized rate of unearned increment could be calculated.  For instance, i f the average dollar value of the parcels  was invested on the average 1.5 years ago, the r i s e i n value would approximate 21% per annum.  If, however, i t was found that the average  d o l l a r value was carried for some two years, the annualized rate of return would approximate 16% per annum.  Generally, i t could be said  that the increase i n value, reflected the general increase i n housing stock prices throughout the abnormal past two years of supply/demand inbalance i n the region. In order to confirm indications designated  by the developers  in the f i r s t part of the questionnaire as to the single most important reason why. the inventory under consideration was not being presently serviced and/or r e s i d e n t i a l construction was not under way, similar choices were presented  to the developers  so that he could choose the  "7.8 single mast important reason far delay with respect to each parcel. Table 22 documents the r e s u l t s for the 37 parcels. Table 22.  Most Important Single Reason Uhy Parcel not Being Serviced and/or Residential Construction in Progress Now for "Mast Valuable Parcels. Reasons Selected by Developers Surveyed  Reason  Number of parcels 4  Lack of adjacent services Municipal policy  23  Corporate policy  3  Market not yet ready Other - following normal procedure - development complete in 1974 - under development  As indicated, developers single most important reason.  1) 2) 2)  4"  plumped for municipal policy as the  The questionnaire sited 23 out of  35 parcels or approximately 65% as being held up for t h i s reason. The average size of the largest parcel held i s i n t e r e s t i n g in that single holdings of this size are few and far between in the region. This i s confirmation of the developers'  a b i l i t y to uncover or assemble  larger s i t e s . The average size of the largest parcel held confirm the  ob-  servation that the largest parcels in the region are often smaller than the smallest parcels in other Canadian urban centres. Price (1970) collected data on average parcel sizes Canadian Urban centres. in that the establishment  surrounding  Although the information i s out of datq of the a g r i c u l t u r a l land reserves has further  . . .  79'  reduced the size Df the average parcel in the Vancouver region, the comparisons are s t i l l noteworthy (see Table 23).  Table 23.  Average Farm Size i n Areas Adjacent to Metropolitan Census Areas  City  Average Farm Size (Acres)  Calgary  66S  Edmonton  .  300  Hamilton  100.5  Montreal  121  Ottawa  199  Toronto  139  Vancouver - Entire Fraser Valley  37.0  - Eastern Fraser Valley  38.2  Source:' Price: Housebuilding Industry in Vancouver, Unpublished :. . M.B.A. thesis, University of British. Columbia, 1970, p. 88.  I  80-  :  CHAPTER VII  STATIC ANALYSIS OF TUO VANCOUVER REGION MUNICIPALITIES IN TERMS OF THE POTENTIAL SUPPLY OF . RESIDENTIAL DUELLING UNITS Chapter IV set out a t h e o r e t i c a l framework for examining the potential supply of r e s i d e n t i a l dwelling units.  A s t a t i c analysis  of two municipalities within the Vancouver region, Surrey and Maple Ridge, confirm the expectations  formulated.  In these examinations,  the time horizon i s limited by the time i t w i l l take to alter the perimeters  for urban growth set down by the two municipalities: in  question,  while no exact prediction can be made as to the length of  time within this time horizon, at least three years would be a minimal expectation. Relative Importance of Surrey and Maple Ridge in the Supply of Dwelling Units in the Greater Vancouver Region Both Surrey and Maple Ridge should play an increasing role in the provision of dwelling units in the near future.  Both municipalities  contain large blocks of undeveloped land or land developed to very low densities.  Municipalities which demonstrated high growth rates  e a r l i e r in the s i x t i e s , are running out of land designated able for development.  Table 2k demonstrates that Coquitlam's  •increase in population from 1961-1966 slowed to 29.7% Examination of a map  and  40.8%  from 1966-1971.  would confirm that Delta's 121.9% increase  Port Coquitlam's 75.9%  suit-  and  increase from 1966-1971 couldr.not be duplicated.  There i s not s u f f i c i e n t vacant designated land. Table 24 ccnfirms that Surrey has 116.5  square miles of  t e r r i t o r y . o r ID.8% of the t o t a l of 1,073.9 for the Metropolitan Vancouver, while Maple Ridge has 100.3 total.  square miles or 9.3% of the  More s i g n i f i c a n t i s the fact that Surrey has an established  density of 846.4 people per square mile i n 1971, and Maple Range has 244.0 people to the square mile, while Vancouver has 9754.1, Burnaby 3674.3, Richmond .1276.9.and Coquitlam has 1,151.2. S t a t i c Analysis of the Residential Dwelling Site Potential in Surrey The t o t a l land area lying within the boundaries of Surrey i s 139 square miles''' or approximately 95,360 acres. • Primary reserves of approximately 17,141 acres and secondary  agricultural  agricultural  reserves of approximately 6,308 acres reduce the urban area by approximately 23,449 acres to a remainder of 71,911 acres. The Greater Vancouver Sewer and Drainage D i s t r i c t sanitary sewer trunk enters Surrey at 56th Avenue on the western boundary.  One  branch continues across Surrey at approximately the 56th Avenue l i n e ; one branch curls south to service White Rock; and one branch curves northward to the Newton area. on Map  1 .  The trunk sewer lines are indicated  This sewer trunk system i s capable of providing sewer ,  service to an estimated 22,717 acres, both inside and outside the presently designated urban growth areas, provided that l a t e r a l sewer lines are i n s t a l l e d to connect the individual sewerage basins to the trunk sewer system.  The provision of l a t e r a l sewer lines i s a r e s p o n s i b i l i t y  and power of the Municipality of Surrey.  Table 25 sets out the  acreage contained i n the various sewer drainage basins in the Surrey area...' \:.-  Table.24.  Area, and Population of Municipalities i n Metropolitan Vancouver Census Area sq. miles  1961  1966  ^  Increase 1971  1961-66 (per  1966-71 cent)  Vancouver University Endowment Lands  43.7 5.5 . 49.2  384,522 3,272 387,794  410,375 2,979 413,354  426,256 3,536 429,792  Burnaby IMeu Westminster  6.7 -9.0 6.6  3.9 18.7 4.0  34.2 5.9 40.1  100,157 33,654 133,811  112,036 38,013 150,049  125,660 42,835 168,495  11.9 13.0 12.1  12*2 12.7 12.3  4.2 62.7 34.4 0.6 101.9  23,656 38,971 25,454  26,851 48,124 31,987  13.5 23.5 25.7  18.6 20.2 13.9  88,081  106,962  31,847 57,861 36,440 396 126,544  46.1 10.4 4.9 0.6 62.0  29,053 8,111 4,789 165 42,118  40,916 11,121 7,021 164 59,222  53,073 19,560 10,778 . 157 83,568  Richmond Surrey White Rock Delta  47.9 116.5 2.0 65.3 231.7  43,323 70,838 6,453 14,597 135,211  50,460 81,826 7,787 20,664 160,737  Other Areas*  34S.2  3,726  Greater Vancouver Regional D i s t r i c t P i t t Meadows Maple Ridge  833.1 19.8 100.3 120.1  IMorth Vancouver City North Vancouver DM West Vancouver Lions Bay Coquitlam Part Coquitlam Part Maady Fraser M i l l s  :  • • a  •• •  •• •  21.4 40.8' 37.1 46.6 - 0.6 40.6  29.7 75.9 53.5 - 4.3 41.1  62,121 98,601 10,349 45,860 216,931  16.5 15.5 20.7 41.6 18.9  23.1 20.5 32.9 121.9 35.0  2,-529  3,004  -32.1  18.8  790,741  892,853  1,028,334  12.9  15.1  2,187 16,748 18,935  2,247 19,287 21,634  2,771 24,476 27,247  2.7 15.2 13.7  23.3 26.9 26.5  18.3  Table 24.  Area and Papulation of Municipalities i n Metropolitan Vancouver (continued) Increase  Census  Langley City Langley DM  Area sq. miles  1961  1966  1971  3.9 116.8 120.7  2,365 14,585 16,950  2,800 15,767 18,567  4,684 21,936 26,620  1,622  137  151  828,248  933,091  1,082,352  Other Areas* Metropolitan Vancouver  1,073.9  Unorganized areas and Indian Reserves Source:  S t a t i s t i c s Canada 92-702, 92-708, 98-701.  1961-66 1966-71 (per cent) 18.4 8.1 9.5  67.3 39.1 43.4 10.2  12.7  16.0  '84  Table 25.  Surrey Sewer Drainage Basins - Acreages Contained  Area  Acreage  South Surrey  3193 acres  Cloverdale  3378  Panorama Ridge  2200  Area to North Delta  1145 •  Newton  2214  Central valley  554  Surrey Memorial Hospital  603  Fleetwood Pumping Area  247  •y  443  Guildford North Slope (to water's edge) Total acreage  8740  .  22,717 acres  1.  Drainage basin areas were measured by planimeter.  2.  No attempt was made to subtract, out already developed acreage.  3.  Margin of error i s i n the, v i c i n i t y of 5%.  85  In 1972,  the Municipality of Surrey delineated urban grouth  areas 1, 2 and 3.  Urban grouth area I encompasses an area i n Uhalley  and Newton to the order of 14,209 acres. aside approximately  1,696  covers approximately Map  Urban growth area 2 sets  acres i n Cloverdale.  Urban growth area 3  2,492 acres i n the Sunnyside area of White Rock.  1 depicts the Surrey urban growth areas. The urban growth areas were set aside by the Municipality  of Surrey i n order to control the staging of Growth and Development. The intent was to concentrate public f i n a n c i a l and s t a f f resources to serve a c l e a r l y defined area within which the demand for public services i s made more predictable than in the areas of unplanned scattered growth.  The intended result i s greatly s i m p l i f i e d and more  economical co-ordination and provision of public services such as u t i l i t i e s , parks and schools.  Expansion  of the urban growth areas  would be permitted when s u f f i c i e n t i n f i l l i n g has taken place in existing urban growth areas; control plans and u t i l i t y plans have been completed for the area of expansion;  and land required for schools,  park and other public purposes has been acquired i n the area of expansion. The land within the urban growth areas i s already p a r t i a l l y developed.  Only the remaining undeveloped land i s suitable for the  supply of new r e s i d e n t i a l dwelling units.  Table 26 tabulates the  remaining undeveloped area in the Surrey urban growth areas.  Note  that a parcel was considered undeveloped with one single family dwelling on the s i t e based on the assumption that further subdivision could . take place. counted.  ,  Only parcels with area i n excess of one acre were .  86  Table 26.  Area  Remaining Undeveloped Acreage i n Residential Zones Surrey Urban Growth Areas • '  "  Remaining undeveloped acreage in r e s i d e n t i a l zones 3,308 acres  Urban growth area 1. Urban growth area 2  308 acres  Urban growth area 3  880 acres  Notes: 1.  A parcel was considered undeveloped with one single family dwelling on the parcel based on the assumption that further subdivision could take place.  Z*  IMo parcels were counted i f the area was less.than one acre.  3.  Margin of error i s i n the v i c i n i t y of 5%.  4.  Parcels were counted i n r e s i d e n t i a l zones only including multi• family.  The o v e r a l l area of Surrey, therefore, i s successively reduced through various constructions: -•-1.  The a g r i c u l t u r a l land freeze;  . 2.  The designation of urban growth areas; and  3. areas.  The extent of existing development i n the urban growth  Table 27 summarizes the r e s u l t s .  The net undeveloped acreage  situation i n Surrey urban growth areas amounts to approximately of the t o t a l area.  k.1%  87  Table 27.  Met Developable  Acreage Compared t o Gross Area - Surrey  Acreage  T o t a l area T o t a l area - l e s s  Percent o f t o t a l area  95,360 acres agricultural reserves  100  71,911  75.4  Area i n c l u d e d i n seuer drainage basins  22,717  23.8  Area i n c l u d e d i n urban grouth areas 1, 2 and 3  18,397  19.2  4,496  4.7  Net undeveloped acreage i n urban grouth area 1, 2 and 3 •  Even though t h e r e i s an e s t i m a t e d 4,496 net undeveloped  %  acres  u i t h i n the Surrey Urban Grouth Areas, the l a n d ounership p a t t e r n s are s p l i n t e r e d .  There are very f e u p a r c e l s over t u e n t y acres i n s i z e .  The g r e a t e s t m a j o r i t y o f the p a r c e l s are tuo a c r e s or l e s s i n s i z e . Table 28 documents the number o f s e p a r a t e l a n d h o l d i n g s by p a r c e l s i z e c a t e g o r i e s f o r a l l the undeveloped  l a n d u i t h i n the urban grouth  areas. Assembly o f these s p l i n t e r e d l a n d h o l d i n g s p r i o r t o development u i l l be very d i f f i c u l t . uhat percentages  No exact f i g u r e s can be g i v e n as t o e x a c t l y  o f these p a r c e l s can be assembled i n t o  packages u i t h i n g i v e n time h o r i z o n s . ouners may r e f u s e to s e l l .  developable  An u n s p e c i f i e d number o f l a n d -  Table 28.  Parcel Size by Size Category for Remaining Undeveloped Acreage i n Residential Zones Surrey Urban Growth Areas Remaining undeveloped acreage i n r e s i d e n t i a l zones  Area  Number of parcels by size category 0-2 2-5 5-10 10-2020+ acres  Growth area 1  3,308 acres  346  328  255  13  Growth area 2  308 acres  13  38  36  3  Growth area 3  880 acres  32  55  4  3  5  Notes: 1.  A parcel was considered undeveloped with one single family dwelling based on the assumption that further subdivision could take place.  2.  No parcels were counted i f the area was less than one acre.,.  3.  Margin of error was i n the v i c i n i t y of 5%.  4.  Parcels were counted i n r e s i d e n t i a l zones only including multi-family.  •  '  4  S t a t i c Analysis of the Residential Duelling Site Potential i n Maple Ridge The t o t a l land area lying u i t h i n the boundaries of Maple Ridge i s 70,50.0 acres. The Municipality Df Maple Ridge has submitted Land Commission requesting that the land surrounding  a plan tD the the toun centre  be exempted from the permanent a g r i c u l t u r a l land designation.  The  land slated for exemption by the Municipality i s that land uhich the Municipality considers as ample for five year of urban grouth uithin.Maple Ridge. The non-agricultural land surrounding approximately  4,143  acres.  the Haney centre totals  IMon-agricultural land east of 240th  Street uas not considered i n t h i s t o t a l as the p o s s i b i l i t y of providing f u l l servicing to the eastern sector of Maple Ridge l i e s remotely i n the future. The Municipality of Maple Ridge has constructed a seuage treatment plant uith a start up capacity for 20,000 people and an "/eventual capacity of 80,000 people.  In addition, the Municipality i s  currently designing a trunk seuer system uhich u i l l provide  seuer  service to the uestern sector of-'the Municipality - p r i n c i p a l l y Development Area 1.  The seuer catchment, basin l i e s inside the  A g r i c u l t u r a l reserve bdundaries as indicated on Map  2.  The  seuer  catchment basin has an approximate area of 2098 acres. In 1971,  Maple Ridge Council designated that area bounded by  Lougheed Highuay on the south, Laity street on the iuest, 208th Street on the east and the A g r i c u l t u r a l Reserve Boundaries 127th Avenue) on the north as Development Area 1.  (approximately The area in  Development Area 1 t o t a l s approximately  302 acres.  The Deudney Alouette Regional D i s t r i c t report on Planning Goals and Guidelines for Maple Ridge 1972  - 1976,  outlines the  general objectives uhich the Municipality i s trying to achieve i n directing development to these areas. are:  Primary among these objectives  ' -•' 1)  To control this staging of development and grouth;  2)  To r e s t r i c t development to these development areas;  3)  To prevent economic hardship to the Municipality from having to provide services and public f a c i l i t i e s over a  ; h)  uide area; To inform the c i t i z e n and developer of the Municipality's . timing i n the provision of necessary public services; and  5)  To set clear p o l i c i e s so that day-to-day planning decisions u i l l be more e f f i c i e n t and coordinated.  There are approximately area 1 of Maple Ridge.  302 net undeveloped acres i n Development  There are feu parcels over tuenty acres.  The greatest majority of the parcels are tuo acres or less in s i z e . Table 29 documents the number of separate landholdings by parcel size categories for the undeveloped land u i t h i n Development Area 1. Assembly of these parcels prior to development u i l l be very d i f f i c u l t i n the case of Maple Ridge.  A l l of the larger parcels over  tuenty acres are held by one family. Maple Ridge plans to rezone Development Area 1 into single family r e s i d e n t i a l at a permitted density of approximately  four units  to the acre. Council may  consider cluster housing patterns at a density of  91'  Table 29.  Area  Parcel Size by Size Category for Remaining Undeveloped Acreage in Residential Zones - Maple Ridge Development Area 1 Remaining undeveloped acreage in r e s i d e n t i a l zones  Development area I  Number of parcels by size category 2-5 5-10 10-20 20+  0-2  302 acres  30  19  8  4  3  six units to the net acre (excluding roads) on those parcels where the predominant Hydro easement makes subdivision into single family, lots d i f f i c u l t .  Six units to the net acre i s roughly  equivalent to  single family density of four to the gross acre. There i s one family which controls approximately 109 at the northern  end of Development Area 1.  acres  This family wishes to  continue farming the land and to pass the land to their family successors so that they may  farm.  This block of 109 acres represents undeveloped land in Development Area 1.  approximately 36% of the The net effect of this  "holdout" i s to reduce the potential housing supply by approximately 400 single family homes. Cognizant of the reluctance of same of the owners to s e l l their land for development, Maple Ridge Council was  forced to preexamine  the economic reasonability of the i n s t a l l a t i o n of a trunk sewer system to connect Development Area 1 to the already  constructed  treatment plant. In May of 1973,  the mayor of Maple Ridge announced that the  operation of.the treatment plant would show a loss: of $7;300 in  1974,  ' 92  but by 1975, the loss uould turn into a surplus of approximately $17,000.  These figures uere based on the assumption  that about 450  neu homes u i l l be b u i l t i n the seuered area each year. In March of 1974, Maple Ridge Council more than t r i p l e d  impost  fees from $300 a l o t to $1,000 a l o t i n Development Area 1, r e t r o - ; . active to January 6, 1974.  The Assistant Municipal Clerk explained  that the fees are to cover the cost of i n s t a l l i n g seuer, uater and other services*  Council also set seuer charges i n Development Area 1  at $1,250 per l o t for those lots fronting the main seuer trunk and $950 per l o t for l o t s not fronting i n the trunk l i n e .  Lateral mains  2  u i l l have to be put i n by the Developer .  Fees, therefore, t o t a l l e d  $2,250 or $1,950 per l o t , depending upon location. On March.21, 1974, Maple Ridge Council held a public hearing to discuss the rezoning of the 102 properties i n Development Area 1 to one family urban r e s i d e n t i a l . became apparent.  Opposition to the rezoning quickly  Most opponents uanted the area to retain i t s r u r a l  r e s i d e n t i a l character.  Some opposed the use of farmland far housing  uhile others feared that the ecosystem of a creek running through the area uould be destroyed. .higher property taxes.  Opponents uere also concerned uith  Persons uhose property uas designated .for  school and park sites feared expropriation.-At the March 26, 1974 Council meeting, Council ordered the uithdraual of eight properties from Development Area 1 as residents of the eight properties argued that there uas no road pattern for the area, no plans to extend the seuer system and that the ecosystem of the creek uould be threatened.  Council gave f i r s t and second readings  to by-laus rezoning the remaining 94 parcels of land.  4  Footnotes  Maple Ridge Gazette, May ID, 1973. Vancouver Sun, March 7, 1974. Maple Ridge Gazette, March 27, 1964 Maple Ridge Gazette, A p r i l 16, 1974  CHAPTER VIII  CONCLUSIONS  Several public companies involved i n r e s i d e n t i a l development . i n d i v i d u a l l y have larger land inventories i n other Canadian centres equivalent to the t o t a l inventory held by a l l tuelve companies r e sponding to the questionnaire. The major private sector developers i n the Vancouver region generally hold land inventories s u f f i c i e n t for immediate development. There uas no evidence of extensive  long term land banking.  The average parcel size of land holdings u i t h i n the urban development areas make extensive  land assemblies very d i f f i c u l t  thereby reducing the competitive  advantages of the public companies  in financing long term inventory  accumulation.  The setting aside of development areas by the tuo municipalit i e s concerned did reduce the potential duelling unit supply, but .the "leakages" i n terms of permitting development outside the develop ment area o f f s e t this l i m i t a t i o n i n one of the tuo municipalities studied. The d i f f i c u l t i e s encountered i n assembling land does reduce considerably the potential supply of r e s i d e n t i a l duelling u n i t s . The d i f f i c u l t i e s i n assembling land i n one municipality constricted the potential supply of duelling units so markedly that the municipal i t y uas required to r a i s e i t s per l o t imposts to finance the municipally i n s t a l l e d sanitary seuer trunk.  95 Although incidental to this study, evidence surfaced uhich indicated that public apposition to development, as expressed by existing property owners, does lead to a t t r i t i o n s in the number D f potential dwelling sites which may  be provided from an area.  In summary, the private sector developers interviewed da nat hold s u f f i c i e n t land inventories at present to provide the r e s i d e n t i a l housing units expected to be demanded by consumers over the next few years.  It i s also evident that the developers are  able to assemble same land for immediate development, i f s u f f i c i e n t land i s so designated, even though splintered land holdings make this a very d i f f i c u l t and time-consuming task.  Developers require favour-  able municipal p o l i c i e s and regulations in order to bring any r e s i d e n t i a l dwelling units to market at a l l and municipal p o l i c i e s and actions w i l l remain instrumental to the supply of housing. Further Observations and Predictions Land development i n the Greater Vancouver Area and Lower Fraser Valley d i f f e r s remarkably  from other urban areas in Canada in  one s i g n i f i c a n t respect - the relative size of the raw land parcels which may  be acquired for development.  Table 23 documented the average  farm size in areas adjacent to metropolitan census areas.  Vancouver  area farms were s i g n i f i c a n t l y smaller in 1969 when these comparisons were made.  Since that time, the Land Commission Act has further  restricted the a v a i l a b i l i t y of raw land.  Development in the f'orseeable  future w i l l be limited to the areas designated by the municipalities as s u f f i c i e n t for five years of urban growth.  Table 27 demonstrates  that the net undeveloped acreages in Surrey Urban Growth Areas 1, 2 and 3 totals only h.1% of the t o t a l area.  Table 28 paints aut that the  96''  remaining undeveloped acreage in these Surrey Urban Growth Areas i s fragmented to say the least.  Inspection of the size of parcel maps  for urban designated land in other Vancouver area municipalities leads to conclusions consistent with the Surrey observation. The fact that fragmented land holdings exist in the Vancouver area i s instrumental in explaining uhy the major public companies involved in land development do not have extensive holdings in the area in comparison uith other urban centres.  Further observation,  houever, leads one tD believe that the situation for the major public companies i s even mare c r i t i c a l than present observation uould reveal. Larger corporations normally depend upon economies of scale for their competitive advantage.  Superior financing and management a b i l i t i e s  normally are best applicable to larger projects.  The larger parcels  in the Vancouver area have been or are in the process of being The r e l a t i v e l y smaller parcels remain. parcels i s costly and time consuming.  developed.  Assembly of the smaller High overhead public companies  do not have a competitive advantage in assembling  such land.  In this  respect, large public companies are competing d i r e c t l y uith numerous smaller organizations. Cognizant of the d i f f i c u l t i e s inherent in assembling  land,  the r e l a t i v e small size of the cumulative parcels which can be assembled after the expenditure of much time and effort and the land development opportunities available elseuhere in Canada and the uorld, some public companies are planning to scale doun the Vancouver area operations in favour of other areas.  One public company i s developing only those  larger parcels uhich i t acquired some years ago.  This company has  not acquired any additional rau land in recent years.  Another company  97 is switching to a similar policy of developing  the larger Vancouver  area holdings which i t previously acquired and i s disposing D f smaller holdings while searching elsewhere i n Canada and the United States for r e s i d e n t i a l land development opportunities. The majority of the public companies interviewed are, however, simultaneously  acquiring larger parcels elsewhere i n Canada  while continuing to attempt to assemble the smaller acreages in the Vancouver area. At the same time that the public companies are scaling down their r e s i d e n t i a l land assembly and land development a c t i v i t i e s , many companies have shifted emphasis to other types of development activities.  Industrial and commercial development are of more i n t e r e s t .  In these f i e l d s the attention of larger blocks of c a p i t a l and management expertise are required even though r e l a t i v e parcel sizes are smaller than r e s i d e n t i a l .  One public company has turned to multifamily  construction on smaller prezoned blocks of land nearer to the urban core. Reviewing these trends, the prediction i s that the cumulative role of the large public companies i n r e s i d e n t i a l development in the Vancouver area w i l l decline to an even less s i g n i f i c a n t  proportion  of the o v e r a l l a c t i v i t y . Furthermore, one can predict that the increasing costs of land assembly due to the fragmented ownership patterns w i l l lead to cost push i n f l a t i o n for r e s i d e n t i a l housing.  Such cost push i n f l a t i o n  w i l l be a complete inversion to the demand p u l l i n f l a t i o n which has *  been presently witnessed.  Presently " i n f i l l "  lands are uneconomical  *The definition of i n f i l l lands used here i s the same as in the Greater Vancouver Regional D i s t r i c t study i . e . vacant land suitable for r e s i d e n t i a l development.  98 tti develop but anticipated population pressures in the Louer  Mainland  area combined uith the relative lack of developable land u i l l force development on the scattered vacant i n f i l l land as u e l l as redevelopment of the urban core.  The percentage cost increases for these s i t e s ,  both in terms of land acquisition costs and development costs u i l l tend to outstrip increase in duelling unit prices caused by demand pull.  Duelling unit prices u i l l continue to r i s e but in many i n -  stances costs u i l l be closer to sales prices than they are today. Profit margins u i l l d e f i n i t e l y tend to narrou.  In this respect, housing  u i l l be like many other commodities uhere s c a r c i t i e s of rau materials are developing.  The cost of acquisition of rau or redevelopment land  u i l l cause the end price to the consumer to go much higher but present margins u i l l narrou. The " i n f i l l " study for the Greater Vancouver Regional D i s t r i c t confirms this observation.  The study i d e n t i f i e s 57,000 acres of  i n f i l l land s u f f i c i e n t for 18 years at existing densities, but points out that 81% of the land in the samples i s uneconomic to develop, and 11% i s in the process of being  developed.  1  Soon the presently uneconomical lands must be developed i f population grouth i s to be accommodated. In  economic terms, the upuard movements in prices u i l l didtate  that a smaller and smaller proportion of income earners u i l l be able to  finance the purchase of single family homes.  Effective demand u i l l  be proportionately shifted to the less expensive multi-family projects uith higher densities of development per.acre of land. densities of development are normally acknouledged of the scarce resource of urban land.  Higher  to be a better use  What appears to be a s o c i a l  99  problem - the cost of housing - may soon i n i t i a t e a s o c i a l benefit the better use of land.  The response u i l l evolve i n the p o l i t i c a l  arena. Areas for Further Research The thesis f a i l s to s p e c i f i c a l l y determine the demand for r e s i d e n t i a l units.  Price level changes are taken to be indicative of  a shortage of supply of r e s i d e n t i a l units r e l a t i v e to demand. areas could be researched.  Several  One study could document the actual pro-  duction of serviced building sites relative to the demand.  Another  study could pinpoint the components of the demand equation.  One  suspects that there may be a higher degree of i n e l a s t i c i t y of demand as income levels r i s e .  It may be that parents are helping their groun  children finance the purchase of a home to .a greater degree than previously.  It may be that a considerable number of younger adults are  buying single family houses immediately rather than waiting for children - thereby transferring future demand to the present. The more intensive forms of land use may be s o c i a l l y desirable. Research could be i n i t i a t e d into the approval process s p e c i f i c a l l y associated uith Planned Unit Developments and multi-family projects. Perhaps reasons could- be developed uhich uould make intermediate densities more p o l i t i c a l l y appealing.  It may be that developers are  not u i l l i n g to i n i t i a t e changes i n housing patterns. that many developers have suggested intermediate to find that frustrations, delays and negative  density projects only  attitudes have led them  to turn back to t r a d i t i o n a l single family patterns. consumer preferences  It may also be  It may be that  make i t just as profitable for the developer to  produce t r a d i t i o n a l single family subdivision as intermediate  density.  IDGIt may be that municipal preplanning i s anathema to innovation developers. The designation of development areas, the permitted densities of development uithin these development areas, and the standards of subdivision design determine the quality and quantity of the supply of serviced r e s i d e n t i a l duelling s i t e s . the municipalities.  A l l these pouers reside uith  The p o l i c i e s of municipalities r e f l e c t the uishes  of incumbent residents.  Research should be i n i t i a t e d as to the nature  and form of an organizational superstructure uhich uould have the provision of housing as i t s frame of reference.  Perhaps stronger forms  of metropolitan government are indicated. Perhaps provincial appeal boards uould be useful.  Perhaps moral suasion and increased sharing  of taxation betueen levels of government uould be a l l that i s necessary.  101  Footnotes Greater Vancouver Regional D i s t r i c t , " I n f i l l Policy Exploration," The Greater Vancouver Regional D i s t r i c t , December 1973, p. 3.  102'  BIBLIOGRAPHY  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. Central Mortgage and Housing Corporation Single Family Dwelling S t a t i s t i c s 1971, 1972 and 1973. Andre Derkowski, Residential Land Development in Ontario. A Report prepared by the Urban Development Institute of Ontario, November, 1972. Greater Vancouver Regional D i s t r i c t , " I n f i l l - Policy Exploration", The Greater Vancouver Regional D i s t r i c t , December 1973. Greater Vancouver Regional D i s t r i c t , "Report of the Residential Living Policy Committee:, The Greater Vancouver Regional D i s t r i c t , December 1973. S. LI. Hamilton, Public Land Banking - Real or Illusionary Benefits, Report of the Urban Development Institute of Ontario, 1974. 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: 1964-. Richard A. Moore. "Development Potential Model for the Vancouver Metropolitan Area", Unpublished Master's of Business Administration thesis, the University of B r i t i s h Columbia, Vancouver, 1972. E. Oksanen, "Housing Demand in Canada, 1947-1962: Some Preliminary Experimentation", Canadian Journal of Economics and P o l i t i c a l Science., 32, 1966. Edmund V. Price. "The House Building Industry i n Vancouver". Unpublished Master's of Business Administration thesis, the University of B r i t i s h Columbia, Vancouver, 1970. P. A. Samuelson, Economics: An Introductory Analysis. McGraw-Hill Company of Canada Ltd., 1966. Ami  Toronto:  C. Thorsteinson, Selected Real Estate Stocks. Unpublished report by Richardson Securities of Canada, November, 1971.  R. A. Uhler, "The Demand for Housing and Inverse Probability Approach", The Review of Economics and S t a t i s t i c s 50: 196S. The Greater Vancouver Regional D i s t r i c t , Population Forecast, Vancouver Vancouver GVRD Planning Department 1973.  1U3  APPENDIX  105 PRELIMINARY INFORMATION THE PURPOSE OF THIS SECTION IS TO DETERMINE THE NATURE OF ACTIVITIES THAT YOUR COMPANY CONDUCTS. 1.  IS YOUR COMPANY OPERATING: (CHECK ONLY ONE) NATIONALLY?  '  INTERNATIONALLY?  ELSEWHERE IN WESTERN CANADA? ONLY IN GREATER VANCOUVER AND THE LOWER FRASER VALLEY? 2.  .  WITH RESPECT TO THE RESIDENTIAL DWELLING UNIT DEVELOPMENTS THAT YOU UNDERTAKE . DOES YOUR COMPANY: (CHECK ALL APPLICABLE FUNCTIONS) ASSEMBLE LAND BY MEANS OF ITS OWN PERSONNEL? ASSEMBLE LAND BY MEANS OF REAL ESTATE AGENTS? BY PREASSEMBLED PARCELS? NEGOTIATE WITH MUNICIPAL OFFICIALS FOR PERMISSION TO DEVELOP? INSTALL SUBDIVISION SERVICES BY MEANS OF AN "IN-HOUSE" CONTRACTING COMPANY? INSTALL SUBDIVISION SERVICES BY MEANS OF A NON-ASSOCIATED CONTRACTING COMPANY? . CONSTRUCT RESIDENTIAL DWELLINGS BY MEANS OF AN "IN-HOUSE" CONSTRUCTION COMPANY? CONSTRUCT RESIDENTIAL DWELLINGS BY MEANS OF A NON-ASSOCIATED CONSTRUCTION COMPANY? SELL SERVICED BUILDING SITES TO BUILDERS? MARKET THE RESIDENTIAL DWELLING UNITS BY MEANS OF COMPANY PERSONNEL? MARKET THE RESIDENTIAL DWELLING UNITS BY MEANS OF NON-ASSOCIATED REAL ESTATE AGENTS?  3.  WITH RESPECT TO COMPANY ACTIVITIES OTHER THAN YOUR OWN DEVELOPMENT FOR RESIDENTIAL DWELLING UNITS, DOES YOUR COMPANY: (CHECK ALL APPLICABLE FUNCTIONS) DEVELOP INDUSTRIAL SITES? DEVELOP COMMERCIAL SITES? DEVELOP RECREATIONAL SITES? ACT AS A REAL ESTATE AGENT?  4.  WITH REFERENCE TO YOUR LAND DEVELOPMENT ACTIVITIES ONLY WHAT APPROXIMATE PERCENTAGE OF LAST YEAR'S DOLLAR VOLUME OF SALES WERE ACCOUNTED FOR BY: -  DEVELOPMENT OF INDUSTRIAL SITES? DEVELOPMENT OF COMMERCIAL SITES? DEVELOPMENT OF SINGLE FAMILY RESIDENTIAL SITES? DEVELOPMENT OF MULTI-FAMILY RESIDENTIAL SITES? DEVELOPMENT OF MOBILE HOME PARKS? DEVELOPMENT OF RECREATIONAL SITES?  107  MASTER SHEET  PLEASE ANSWER THE FOLLOWING QUESTIONS WITH REFERENCE TO ALL THE LAND DEVELOPED FOR OR HELD FOR THE PROVISION OF RESIDENTIAL DWELLING UNITS (SINGLE FAMILY, CONDOMINUM, LOW RISE APARTMENTS, HI-RISE APARTMENTS, MOBILE HOMES, TOWNHOUSES.) •IN THE GREATER VANCOUVER AND LOWER FRASER VALLEY AREAS ONLY AS AT 30th SEPTEMBER, 1973. 1.  APPROXIMATE TOTAL ACREAGE HELD BY COMPANY FOR THE PROVISION OF RESIDENTIAL UNITS IN THE GREATER VANCOUVER AND LOWER FRASER VALLEY AREAS AS AT SEPTEMBER 30th, 1973. HELD SOLELY BY COMPANY  .  NET INTEREST IN JOINT VENTURES (OTHER THAN JOINT HOLDINGS WITH WHOLLY OWNED SUBSIDARIES) (EQUIVALENT IN 100 % OWNED ACREAGE) 2.  SIZE AND NUMBER OF PARCELS NUMBER OF SEPARATE PARCELS (NON-ADJOINING) MAKING UP THE ACREAGE FIGURE GIVEN AS HELD FOR PROVISION OF RESIDENTIAL UNITS SIZE OF LARGEST PARCEL SIZE OF SMALLEST PARCEL  3.  LOCATION OF LAND - APPROXIMATE ACREAGE VANCOUVER BURNABY  .  LANGLEY MATSQUI  RICHMOND DELTA  MAPLE RIDGE/  SURREY  PITT MEADOWS  COQUITLAM/ PORT COQUITLAM  NORTH VANCOUVER/ WEST VANCOUVER  PORT MOODY  MISSION OTHER/ SPECIFY  "~ |p I^ ™g S  E  E  S  A S  GEOGRAPHICAL SEPARATE PARCLES NOT  108 PROBABLE ANTICIPATED USE FOR LAND ACREAGE  SINGLE FAMILY MULTI-FAMILY APARTMENT MOBILE HOME PARKS COMMERCIAL INDUSTRIAL RECREATIONAL  ANTICIPATED NUMBER OF RESIDENTIAL UNITS PER ACRE  ACREAGE  NUMBER OF RESIDENTIAL UNITS TO BE PROVIDED  ESTIMATED TIME BEFORE SUBDIVISION SERVICING AND/OR RESIDENTIAL UNIT CONSTRUCTION TO BEGIN A)  SUBDIVISION SERVICING AND/OR CONSTRUCTION IN PROGRESS NOW (INCLUDE FUTURE PHASES OF DEVELOPMENT PROJECTS IN PROGRESS WITHIN THE TIME HORIZONS WHEN SERVICING AND/OR RESIDENTIAL CONSTRUCTION IS TO BEGIN IN THESE PHASES) (1) MOST IMPORTANT SINGLE REASON WHY LAND NOT. BEING SERVICED AND/OR RESIDENTIAL CONSTRUCTION IN PROGRESS NOW (CHECK ONLY ONE) SUBDIVISION SERVICING AND/OR RESIDENTIAL UNIT CONSTRUCTION TO BEGIN WITHIN ONE YEAR PERIOD FROM SEPTEMBER 30/73  LACK OF ADJACENT SERVICES MUNICIPAL POLICY CORPORATE POLICY MARKET NOT YET READY FOR THIS TYPE OF RESIDENTIAL UNIT IN THIS AREA OTHER (SPECIFY)  ;  (1) THE INTENT OF THIS QUESTION IS TO DETERMINE WHEN YOUR COMPANY ANTICIPATES STARTING CONSTRUCTION ON THE SITE NO MATTER' WHAT THE TYPE OF CONSTRUCTION I S .  4.  ACREAGE  NUMBER OF RESIDENTIAL UNITS TO BE PROVIDED (CHECK ONLY ONE)  5. C)  SUBDIVISION SERVICING AND/OR. RESIDENTIAL UNIT CONSTRUCTION . TO BEGIN LATER THAN ONE YEAR FROM SEPTEMBER 30/73 BUT BEFORE TWO YEARS  LACK OF ADJACENT SERVICES  (1-2 YRS)  MUNICIPAL POLICY CORPORATE POLICY MARKET NOT YET READY FOR THIS TYPE OF RESIDENTIAL UNIT IN THIS AREA  D)  LATER THAN TWO YEARS BUT BEFORE FIVE YEARS  LACK OF ADJACENT SERVICES  (2-5' YRS)  MUNICIPAL POLICY CORPORATE POLICY MARKET NOT YET READY FOR THIS TYPE OF RESIDENTIAL UNIT IN THIS AREA  E)  LATER THAN FIVE YEARS (MORE THAN 5 YRS)  T  LACK OF ADJACENT SERVICES MUNICIPAL POLICY ; CORPORATE POLICY MARKET NOT YET READY FOR THIS TYPE OF RESIDENTIAL UNIT IN THIS AREA  ;  PARCEL SHEET  111  1.  TOTAL ACREAGE  2.  ESTIMATED NET DEVELOPABLE ACREAGE (EXCLUDING TOO STEEP SLOPES, ROCK OUTCROPPINGS, STREAMS AND CREEKS, AREAS OF POOR DRAINAGE, SOFT SOILS CONDITIONS, SHIFTING GROUND)  3.  PROXIMITY TO:  DISTANCE IN MILES  I) II)  .  TRUNK SEWER . MAIN WATER LINES  III) PRESENTLY DEVELOPED AREA 4.  ESTIMATED PRESENT MARKET VALUE PER ACRE  5.  YEAR OF ACQUISITION  6.  COST OF ACQUISITION PER ACRE  - . '  ___  •  7. • ESTIMATED YEAR OF DEVELOPMENT 8.  NATURE OF ANTICIPATED DEVELOPMENT  :  SINGLE FAMILY . MULTI-FAMILY LOW RISE APARTMENT HI RISE APARTMENT MIXED DENSITY RES. _ _ _ _ _ _ _ _ MOBILE PARK HOMES  .  MIXED- DEVELOPMENT (MIXTURE OF RESIDENTIAL/COMMERCIAL/INDUSTRIAL ETC.) '  MOST IMPORTANT SINGLE REASON WHY THIS PARCEL NOT BEING SERVICED AND/OR RESIDENTIAL CONSTRUCTION IN PROGRESS NOW (CHECK ONLY ONE) LACK OF ADJACENT SERVICES  ' MUNICIPAL POLICY CORPORATE POLICY MARKET NOT YET READY FOR THIS TYPE OF RESIDENTIAL UNIT IN THIS AREA _ OTHER (SPECIFY)  112District of.Surrey February, 1972  URBAN GROWTH AREAS The Urban Growth Area concept embodies the principle of staging growth and development to occur in areas where the Municipality is geared to handle such development efficiently and economically. Rather than permitting development at random and later suffering economic hardship from having to scatter services and public f a c i l i t i e s such as parks and schools over a wide area, the Municipality is attempting to promote orderly development by judiciously using Municipal expenditures to provide serviced land and community f a c i l i t i e s in areas where development and .growth i s wanted.  t  The delineation of Urban Growth Areas i s also intended to serve as a means of informing the citizen and developer of the Municipality's timing i n the provision of necessary public services. Similarly, i t provides a clear policy for the Municipality to base the many day to day decisions that i t is confronted with and which otherwise would of necessity be individual decisions based on the merits of each particular situation. In essence, the application of the Urban Growth Area concept allows the concentration of public financial and staff resources to serve a clearly defined area within which the demand for public services i s made more predictable than , in. areas of unplanned scattered growth. The result i s greatly simplified and . more economical co-ordination and provision of public services such as u t i l i t i e s , parks, schools, etc. This ultimately means more for your tax dollar. To accomplish this, the Municipality intends to: (a) Complete a l l subdivision control .plans.for the Urban Growth Areas and to prepare u t i l i t i e s and services...plans...l.n_._c.onm .  .(b) Confine a l l sanitary sewer_ex_t^ (c) ' (d) ' •  •  Establish a priority for local improvement spending in the Urban Growth Areas; Prepare a capital budget geared towards obtaining public land requirements and constructing public f a c i l i t i e s and services within the Urban Growth Areas;  (e) Undertake periodic review of the Urban Growth Areas to permit expansion; (f) Permit expansion only i f : / V:.-., (i) Sufficient i n f i l l i n g has taken place in existing Urban Growth Areas; :i  ;  v ( i i ) Control plans and u t i l i t y plans have been completed for the area of  •. expansion; and ( i i i ) Land required for school, park, and other public purposes has been . acquired in the area of expansion. I t is intended, therefore, that the Municipality's policy w i l l be to m&ke, ?.Y.§DL_eM .Urban Growth Areas so that the inq« t: effect i. ve; ^utie in ; iiimlc at our ex is |:in|« services and f a c i l i t i e s , 'sjii.' tho. inew i;l n i. :  ;  15!  most " e P f e c t i v e ~ u s e  i s made of our existing services . and  f a c i l i t i e s ^so  that new  services and f a c i l i t i e s can be economically and efficiently provided, so that some reasonable development, pat tern can be effected, and s__J_haJ__^^^ community can be achieved.  SCALE  REVISED  MAR. 1974 ,  ;  G.P  l"=  Fraser  River  112 AVE./  104 AVE.;^  96 AVE  O)  c a  in  C  .0  SCALE: 1"=3000'  SURREY  D E V E L O P M E N T AREA AGRICULTURAL 'G.V.S.  BOUNDARIES  LAND RESERVE  AND D.D. TRUN&  DEVELOPED A R E A S SEWERAGE  AREA  \  SEWER  , BOUNDARY  BOUNDARIES  0 AVE.  

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