Open Collections

UBC Theses and Dissertations

UBC Theses Logo

UBC Theses and Dissertations

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

Your browser doesn't seem to have a PDF viewer, please download the PDF to view this item.

Item Metadata

Download

Media
831-UBC_1974_A4_6 W55.pdf [ 19.5MB ]
Metadata
JSON: 831-1.0099888.json
JSON-LD: 831-1.0099888-ld.json
RDF/XML (Pretty): 831-1.0099888-rdf.xml
RDF/JSON: 831-1.0099888-rdf.json
Turtle: 831-1.0099888-turtle.txt
N-Triples: 831-1.0099888-rdf-ntriples.txt
Original Record: 831-1.0099888-source.json
Full Text
831-1.0099888-fulltext.txt
Citation
831-1.0099888.ris

Full Text

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 of B.C. 1960 B.Ed., U n i v e r s i t y of Calgary 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 Business A d m i n i s t r a t i o n Ue accept t h i s t h e s i s as conforming to the r e a u i r e d standard THE UNIVERSITY OF BRITISH COLUMBIA APRIL, 197^ In presenting this thesis in partial fulfillment of the requirements far an advanced degree at the University of British Columbia, I agree that the library shall make i t freely available for reference and study. I further agree that permission far ex-tensive copying of this thesis for scholarly purposes may be granted by the head of my department or his representatives. It is under-stood that copying or publication of this thesis for financial gain Bhall not be allowed without my written permission. Department of Commerce and Business Administration The University of British Columbia Vancouver 6, Canada. i ABSTRACT The focus of t h i s study i s on the ra le of the major r e s i -dent ia l developers in the Vancouver region in terms of the rau land inventor ies presently held and the d i f f i c u l t i e s encountered in adding to these land inventor ies to replenish land supply . The object ive i s to determine whether the major pr ivate sector developers can provide substant ia l r e l i e f from the present due l l ing unit supply/ demand imbalance. Information on the land holdings of tuelve major developers uas co l lec ted through the use of a quest ionnai re . Information as to the r e l a t i v e s i zes of urban areas, sewer areas, seuer catchment areas, development areas, and the parcels u i th in the development areas, uas co l la ted from planning reports , maps, and t a b u l a t i o n . Analys is of the data reveals that pr ivate sector developers do not have extensive land inventor ies in the Vancouver reg ion . Further analys is points out that the inventor ies are in most cases, held for immediate development. Evidence shous that sp l in te red land ounership patterns and small parce l s izes are instrumental in reducing rau land inventory s i z e s . Furthermore, evidence shous the combination of small parce l s i z e s , assembly d i f f i c u l t i e s and the d i rec t ion of development toward s p e c i f i c development areas by munic ipa l i t ies sharply reduces the potent ia l numbers of r e s i d e n t i a l due l l ing u n i t s . TABLE OF CONTENTS Chapter •: • Page I INTRODUCTION.... ............ 1 The Problem 1 Objectives of Thesis . k Structure of Thesis : '-.5' -• Scope and Methodology J..... J... 7 Data Gathering Techniques......... 7 Limitations of the Questionnaire Approach 9 Limitations in Gathering Data from Maps and.Municipal Planning Reports............. 9 Hypotheses.......... : 10 II SUPPLY AND DEMAND FOR HOUSING - THEORETICAL ANALYSIS... . 12 Summary of Supply and Demand 15 Effect of Surplus Demand on Land Pricing...... 17 Effect of Surplus Demand on the Supply of Housing Units to the Market..... ; 21 III SUPPLY AND DEMAND FOR HOUSING IN METROPOLITAN VANCOUVER . . 25 Demand for Housing as a Function of Income.... 26 r . Demand for Housing as a Function of Population.. . 30 XV THE SUPPLY OF SERVICED RESIDENTIAL DWELLING SITES AN EXAMINATION OF THE FACTORS DETERMINING QUANTI-TATIVE EXPECTATIONS OF INCREMENTS TO EXISTING HOUSING STOCK THROUGH THE DEVELOPMENT OF SERVICED RESIDENTIAL DUELLING SITES k3 Static Analysis of the Residential Duelling Unit Supply Process k3 .Dynamic Analysis of the Residential Unit Supply Process. 50 V ROLE OF PUBLIC COMPANIES IN CANADIAN RESIDENTIAL DEVELOPMENT 57 VI 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 for the Provision of Residential Duelling Units.... 62 i i i Chapter Page . Number and Size of Non-Adjoining Parcels held by Developers in Inventory 63 Geographical Distribution 65 Developers' Explanations as'to Why Land Held, in Inventory uias not Being Serviced and/or Residential Construction was not Under Uay at the Time of the Study 67 Most Probable Uses for Land Inventory Held... 69 Estimated Time Before Subdivision Servicing and/or Residential Unit Construction to Begin 70 Developers' Responses Relating to 'Most Valuable Parcels' in Their Individual Inventories with Respect to the Provision of Residential Dwelling Units 73 VII STATIC ANALYSIS OF TWO VANCOUVER REGION MUNICI-PALITIES IN TERMS OF THE POTENTIAL SUPPLY OF RESIDENTIAL DUELLING UNITS 79 Relative Importance of Surrey and Maple Ridge in the.Supply of Dwelling Units in the Greater Vancouver Region . 7 9 Static Analysis of the Residential Dwelling Site Potential in Surrey 80 Static Analysis of the Residential Dwelling Site Potential in Maple Ridge 88 Subdivision Approval Policy After Establish-ment of Development-Area 1 - Maple Ridge.. . 89 VIII CONCLUSIONS...... 93 Areas for Further Research 95 BIBLIOGRAPHY 98 APPENDIX....................... 100 LIST OF TABLES Table Page 1 Existing Duelling Stock Price Rises Through Time 18 2 Effect of Leverage on Residential Duelling Site Prices...... 19 3 Effect of Leverage on Rau Land Prices.. 20 4 Negative Leverage . 21 5 The Price of Homes in Metropolitan Vancouver Relative to Average Income of Industrial Workers in B.C. 1963-1973 27 6 Household Formation and Duelling Unit Starts in Metropolitan Vancouver 1961-1976 33 7 Residential Building Activity - Duelling Starts in Metropolitan Vancouver 1967-1973 34 8 Residential Building Activity - Single Family Duelling Starts in Metropolitan Vancouver 1967-1973 35 9 Residential Building Activity - Multiple Duelling Starts - Metropolitan Vancouver 1967-1973 36 10 Cost of Construction of Single Family Duellings in Metropolitan Vancouver 196Q-1973... 39 11 Average Cast of a Typical Serviced Lot in the Greater Vancouver Regional District 1964-1973 40 12 The Cost of Housing in the Greater Vancouver Regional District in Terms of Building Costs and Serviced Land Prices 1964-1973 41 13 Annual Equity Financing by Public Real Estate Companies 1960-1973 .... 58 14 Total Acreage and Average Parcel Size of Inventory Held by Responding Developers 62 15 Rau Land Inventories in Acreages for Represent-ative Major Public Companies in Selected Urban Areas of Canada - Based-on 1972 Annual Reports of Reporting Companies x 64 Table Page 16 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 .17 Most Important Single Reason Why Inventory not Being Serviced and/or Residential Construction in Progress now. Reasons as Selected by Developers Surveyed 68 18 Developers' Expectations as to Most Probable Uses far Their Land Inventories - Aggregate Figures for a l l Twelve Developers Reporting.. • 70 19 Developers' Expectations as to time before Sub-Division and/or Residential Unit Construction to Begin on Lands Held in Inventories -Aggregate Figures for a l l Twelve Developers ' Reporting 72 20 Estimated Year of Development - "Most Valuable' Parcels as Selected by Developers 75 21 Year of Acquisition - 'Most Valuable 1 Parcels as Selected by Developers..... 75 22 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 23 Average Farm Size in Areas Adjacent to Metro-politan Census Areas 78 2k Area and Population of Municipalities in Metro-politan Vancouver 81 25 Surrey Sewer Drainage Basins - Acreages Contained. 83 26 Remaining Undeveloped Acreage in Residential Zones - Surrey Urban Growth Areas. 85 27 Net Developable Acreage Compared to Gross Area - Surrey ••• 06 28 Parcel Size by Size Category for Remaining Undeve-. loped Acreage in Residential Zones - Surrey -.. . Urban Growth Areas 87 Parcel Size by Size,Category for Remaining Undeveloped Acreage in Residential Zones - Maple Ridge Development ... Area 1................................ V I X LIST OF FIGURES Figure Page 1 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 Static Analysis of Residential Duelling Unit Supply Process k Diagram of Dynamic Analysis of Residential Duelling Unit Supply Process 51 Map ' . 1 Comprehensive Map of Surrey In Pocket 2 . Comprehensive Map of Maple Ridge ....... In Pocket 3 Map of Maple Ridge - Location of Subdivisions 1973...... In Pocket v i i i ACKNOWLEDGEMENTS The wri ter wishes to thank a l l the pr i vate developers who responded to the quest ionnaire For time and cooperat ion; the Consult ing Engineers for the compilat ion of data; Gary Young and Germain Matthieu for assistance in research and the formulat ion of concepts; my secretary Bonnie Tuka and Mrs. M. Brown who worked on the yeoman chore of t yp ing . This wri ter i s e s p e c i a l l y g r a t e f u l to Dr. Stanley Hamilton for h is advice and guidance. CHAPTER I INTRODUCTION The Problem There is currently a housing shortage in the Greater Van-couver and Louer Fraser Valley Region. The Greater Vancouver Regional District Policy Report succinctly describes the situation: 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 per-cent. ...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 con-crete steps to meet the need. ^  To add fuel to the f i r e , further rapid population growth in the Vancouver Metropolitan Area is expected. The Lower. Mainland Regional Planning Board in "Population Trends in 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 in 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 is only one dimension of the complic-ated problems that are associated with urban growth. Ecological factors need consideration. Density of development is 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 in-creases in population generated by urban grouth. Given a l l the externalities associated uith housing, this report u i l l only focus on one problem - the provision of housing in . 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 is not an easy medium in uhich to work. The supply of developable land is limited. Municipalities, under increasing financial strain 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. Citizen groups protest against development for a variety of reasons. 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 govern-ments for' more equitable splits of tax: i revenues for the provision of municipal services. - Creation of stronger forms of metropolitan and/or regional governments to supplement or surplant municipal govern-ments. ' - Land banking schemes on behalf of municipal, provincial or federal governments for provision of housing in the future. . - Government grants for the provision of innovative housing; - Expropriation legislation permitting some level of govern-ment to expropriate land of owners uho holdout against 3 development so that land assemblies can be completed for the prov is ion D f housing. - Taxation measures to recapture speculat ive p r o f i t s in land . - Leasing of bu i ld ing s i t e s to po tent ia l houseowners at rates below competitive markets. - Income r e d i s t r i b u t i o n schemes so that louer income classes can buy or rent housing. Innovative approaches to housing problems take time to uork out. S i tuat ions must become c l e a r l y evident before the publ ic i s aware of them. Publ ic awareness precedes publ ic debate. Publ ic debate precedes po l icy formulat ion. Pol icy formulation takes t ime. Leg is -la tors must come to c learer understandings o f . the s i t u a t i o n in order to determine which p o l i c i e s would tend to a l l e v i a t e and which would tend to i n t e n s i f y the problems. Supplying new housing takes t ime. Lead times in the prov is ion of new housing are lengthy. Del ineat ion D f development object ives for the munic ipal i ty by i t s Counci l takes t ime. Prov is ion of trunk sewers and other necessary in f ras t ruc ture takes t ime. Land assembly takes t ime. Municipal subdiv is ion approval takes t ime. Subdiv is ion serv ic ing and/or r e s i d e n t i a l dwell ing construct ion takes t ime. In summary, projects to supply new housing in the near future must have been i n i t i a t e d some time ago. This thes is i s based on an assumption. The assumption i s that developers, e i ther publ ic agencies or pr ivate companies, w i l l provide the housing in the region within the ffinirseeable future working within the l e g a l , f i n a n c i a l , munic ipal , p r o v i n c i a l , l and -ownership, managerial and mater ials supply frameworks now e x i s t i n g . V This report i s , in small part, an examination of the ability of a subsect of residential developers, the 'major' private sector developers within the Vancouver region to f i l l their function -the supply of new residential housing. Objectives of Thesis The primary objective of this report is to document the land holdings of the major residential developers in the, region with a view to ascertaining what is the nature of these holdings and what reasonable expectations can be held as to the ability of the major developers to play their role in supplying residential building sites and/or residential dwelling units in the foreseeable future. The secondary objective is to outline the steps that the developer must follow to add the necessary increments to his land inventory in 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 residential development industry is to continue to play an active role in the future. It may well be that choices open to.the developers in the aggregate for the acquisition of land develop-able within this time horizon required by developers may be quite limited. It may be that the limitation of the choices is a direct result of the planning process as brought down by the municipalities involved. A third objective of this report i s to outline the frictions that presently exist in the supply process for residential, dwellings and to point out some implications of these frictions for the near term supplies of building sites. This report w i l l be limited to 5 pointing out frictions in 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 British Columbia, w i l l discuss the frictions generated by the muni-cipal 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 in satisfying housing demands is examined. A brief overview of the f i l t e r i n g process within the housing stock is included to provide further.insight into the flow between existing and new housing.. The effects of excessive demand on the supply for the total housing stock on serviced dwelling sites, prices and raw land prices is outlined. Chapter III examines the housing supply/demand balance in the Greater Vancouver Regional District in quantitative terms to de-termine i f there is any evidence of inbalance. Chapter IV sets out a theoretical framework for the examina-tion of the supply process for serviced residential dwelling sites against which the actual situation in the Greater Vancouver and Lower Fraser Valley Region can be measured. The theoretical framework is sp l i t into two sectors. The f i r s t is a static 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 is a dynamic analysis setting out what happens to potential supply as i t is con-verted to actual supply through time. 6 Chapter V out l ines an overview of the ro le of publ ic com-panies in Canadian r e s i d e n t i a l development. The r i s i n g t ide of publ ic f i n a n c i a l p a r t i c i p a t i o n in the Canadian r e a l estate industry as a whole i s documented. Reasons for the evolving involvement of publ ic companies are d iscussed. Land inventor ies of se lected publ ic companies act ive in r e s i d e n t i a l development are documented to i n -dicate the s ize of these holdings r e l a t i v e to developer holdings in the Vancouver Region and the geographical d i s t r i b u t i o n of these inventor ies . Chapter VI i s an evaluation of the empi r ica l resu l t s gener-ated by the questionnaire used to ascerta in the inventor ies of selected companies operating in the Vancouver reg ion . The object ive i s to gain some ins ight into the extent Df the land inventor ies of these companies - both in gross acreages and in terms of the potent ia l number of r e s i d e n t i a l dwelling units which could be suppl ied in the foraeeable fu tu re . Chapter VII i s a s t a t i c examination of the potent ia l supply of r e s i d e n t i a l dwelling u n i t s . A comprehensive examination of a l l seventeen mun ic ipa l i t i es in the Greater Vancouver Regional D i s t r i c t as wel l as the out ly ing mun ic ipa l i t i es in the Lower Fraser Valley l i e s beyond the productive capacity of the resources a l located to th is t h e s i s . Two mun ic ipa l i t i es are selected - Surrey and Maple Ridge. Quantitat ive evaluations of the reductions in dwelling s i t e potent ia l capacity due to a ser ies of Municipal and P r o v i n c i a l con-s t r a i n t s , are documented in these two m u n i c i p a l i t i e s . Furthermore, ind icat ions of further reductions in potent ia l supply due to the d i f f i c u l t i e s of assembling land, are examined. 7 Scope and Methodology  Intent The intent of this study is to examine tuo aspects of the process by uhich residential duelling units are supplied to consumers of heu housing in the Vancouver region. These aspects are the sizes of rau land inventories uhich are currently in the hands of major private sector developers and the process by uhich land incremental to land inventories is 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 social externalities associated uith supplying housing. It does not discuss the quality or form of housing that u i l l be supplied. It does not investigate the trade-off betueen the desire for increased planning controls and the provision of housing. It simply discusses the potential supply of residential housing. Data Gathering Techniques The analysis in this study is based upon data gathered from three sources. The f i r s t source is a questionnaire distributed to eighteen companies. The second source is the collecting, sorting, classification and counting of data collected from Municipal planning revieus, seuer and uater, portfolio maps, legal maps and Greater Vancouver Seuer and Drainage District'reports. The third source is 8 information as to land assemblies gathered by the writer in the course of employment experience in the development industry . The questionnaire on land inventor ies were d is t r ibuted to eighteen major pr ivate developers. The l i s t of developers was compiled from: a) The membership of the Urban Development Inst i tute ( B . C . Region), 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 Associat ion of Canada). In each case, the l i s t was pared to include those developers general ly known to have the important land holdings in the area for the prov is ion of r e s i d e n t i a l u n i t s . In each case, the demonstrated a b i l i t y to produce r e s i d e n t i a l housing and/or serv iced dwelling s i t e s was an add i t iona l c r i t e r i o n . Based on s ize and importanceeof' land holdings, the l i s t of companies sorted i t s e l f out to be pr imar i l y publ ic companies - both l o c a l l y based and the subs id ia r ies or branch oper-ations or nat ional and in te rnat iona l publ ic companies. Only two companies were included in the l i s t . Each questionnaire was d is t r ibuted personal ly by research s t a f f to an executive of the company in quest ion. In those instances where the executive had s u f f i c i e n t time, the interviewers i n i t i a t e d general discussions on various aspects of the housing market. In each case, the interviewer inst ructed the executives as the c r i t e r i a precedent to f i l l i n g in the quest ionnai res . Due to the nature of the information desi red, the executives were inst ructed to f i l l in the questionnaires at la te r dates. The interviewers personal ly picked up the questionnaires upon the i r completion. In some cases, where time was l i m i t e d , ' the developers mailed in the i r responses. 9 Limitations of the Questionnaire Approach The problems associated with data collection 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 fields but.to be sure that relevant questions sub-tracted out the nature of the land inventory scheduled for resi-^-dential development. , . k. 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 particularly relevant with respect to ascertaining reasons as to why land inventories were not being developed now. Limitations in Collecting Data from Flaps and Municipal Planning  Reports Few limitations arose in collecting, sorting and counting data from maps. The major diffi c u l t y was to standardize the data collection between the two municipalities so that the results are comparable. Standardized procedures were adopted which, insofar/ as possible, standardized results. Hypotheses There are several hypotheses to be examined. 1. That the public companies involved in residential 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-ties reduces the potential supply of residential 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 residential dwelling units. 11 \ Footnotes ''"Greater Vancouver Regional D i s t r i c t , "Report of the Res ident ia l L iv ing Po l icy Committee", The Greater Vancouver Regional D i s t r i c t , December 1973, Preface . CHAPTER I I 12 SUPPLY AIMD DEMAND FDR HOUSING THEORETICAL ANALYSIS An a l y s i s of the supply 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 must begin u i t h an a n a l y s i s of the supply and demand f o r the housing stock as a uhole. In c o n t r a d i s t i n c t i o n to many other consumer goods, con-sumers of housing can choose betueen buying e x i s t i n g d u e l l i n g u n i t s uhich 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 , or buying a neu u n i t . At any given time, the uhole of the e x i s t i n g housing stock i s l a t e n t l y up f o r sale or rent as u e l l as the t o t a l i t y of neu a d d i t i o n s to the housing stock. I f p r i c e l e v e l s d i f f e r betueen the tuo cate-gories of housing, s u f f i c i e n t holders of e x i s t i n g stock u i l l be ini duced i n t o the market, to buy neu homes and s e l l t h e i r o l d homes so as to equalize 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 other d i r e c t i o n a s u f f i c i e n t number of neu home buyers u i l l be induced to pass up neu homes i n favour of older ones, u n t i l , once again the p r i c e l e v e l s are approaching e q u a l i z a t i o n . •At any one time, the e x i s t i n g housing stock makes up the greatest bulk of the housing market. Increments to the housing stock normally range from tuo to four percent per annum. Therefore, p o t e n t i a l s e l l e r s of e x i s t i n g housing make up n i n e t y - s i x to n i n e t y - -* eight percent of the p o t e n t i a l market at any one time. .. Neu housing * I t may be argued that only a small percentage of the e x i s t i n g stock may be up f o r sa l e at any one given time. This does not take i n t o account that i f there 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 uould come onto the market. 13 makes up only two to four percent. The number of actual and potent ia l s e l l e r s i s cons iderable . In most cases, i n d i v i d u a l fami l ies oun ex is t ing housing. Each family s e l l s i t s oun unit at the pr ice i t can obtain uithout reference to any pr ice f i x i n g agreements betueen s e l l e r s . Edmund Pr ice points out that there are approximately 65D. bui lders in the Greater Vancouver area."*" Each bui lder acts as an independent agent in s e l l i n g h is product. Richard Moore interv ieued s ixty three developers supplying e i ther r e s i d e n t i a l bu i ld ing s i t e s and/or r e s i d e n t i a l duel l ings 2 to the reg ional market. In. terms of the economists' d e f i n i t i o n of * perfect competit ion, i t appears that the market for the housing stock, as a uhole, approaches perfect competition i f r e s i d e n t i a l duel l ings can be considered as l i v i n g space purely and s imply . The housing stock and the in te ract ions of supply and demand for the housing stock can be diagrammed roughly as ind icated belou. Occupants of + Net immigration/ ^ Number of par t i c ipants ex is t ing stock emmigration uho can finance pur -+ chase of r e n t a l or net household r e s i d e n t i a l duel l ing - . formation uni ts = index Ex is t ing housing stock Net addit ions to housing number 100% + stock (2% to 4%) If the index number i s 1 - r e s i d e n t i a l unit pr ices u i l l s t a b i l i z e . If *"Perfect competition i s defined by the economist as a techn ica l term: 'per fect competit ion' ex is ts only in the case uhere no farmer, business -man or laborer i s a big enough part GT the t o t a l market to have any personal inf luence on market p r i c e . " **The point should be made, houever, that due l l ing units are not normally considered as purely and simply l i v i n g space. Each duel l ing unit has a cer ta in locat ion u i th l inks to or proximity to places of employment, shopping, schools , recreat ion f a c i l i t i e s and desirable neighborhoods. Such s p e c i f i c locat ions d i f f e r e n t i a t e to some degree the r e s i d e n t i a l duel l ing unit market. Ik the index number i s greater than 1 prices r i s e u n t i l either i ) net immigration/emmigration balance changes, i i ) rate of net hcushold formation declines - usually through doubling up of households, i i i ) number of participants able to finance entry into the market declines either through the escalation of the re n t a l price index or the escalation of the prices of homes (new and e x i s t i n g ) , i v ) s u f f i c i e n t number of new housing units (rental or sale) enter market through increased pace of construction, v) any combination of the above either decreases demand or increases supply. If the index number i s less than 1, then price 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 outlined factors either increases demand or reduces supply. F i l t e r i n g occurs throughout the housing stock. Owners of existing housing s e l l t h e i r homes and buy new or used housing or move to rental accomodation. Occupiers of re n t a l accomodation buy new or existing homes. 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 participants to finance the acquisition of a dwelling u n i t . As t o t a l net disposable income allocated 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 par t i c i p a n t ( s ) the participant w i l l normally upgrade his housing accomodation. I t should be noted however that as i n d i v -idual incomes increase a smaller proportion of income i s spent on housing. The income e l a s t i c i t y for 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 closer 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 for 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 analysis as he has found income e l a s t i c i t i e s range 15 6 * between .34 and . 5 7 . Lee (1964) supports these f indings concluding that income e l a s t i c i t y i s less than unity hence the proport ion of 7 income spent on housing f a l l s as income r i s e s . The wi l l ingness and/or a b i l i t y of par t i c ipants to " f i l t e r " up or down through the accomodation spectrum is often inf luenced by aspi rat ions and needs, such as, s i ze of family and need for space; family and neighborhood associat ions and t i e s ; psychological importance of status to the i n d i v i d u a l ; expectations as to future income l e v e l s ; pursuit of l i f e s ty les which lead to a l l o c a t i n g funds to other con-g sumer goods and a c t i v i t i e s . One important determinant of the i n -d i v i d u a l ' s wi l l ingness to par t i c ipa te in th i s f i l t e r i n g process i s h is expectations as to future housing p r i c e s . If the par t i c ipant i s convinced that the pr ice of housing w i l l continue to esca la te , he w i l l l i k e l y use any means at his d isposal to purchase a r e s i d e n t i a l dwelling unit now rather than wait . The net e f fec t of th i s phenomenon i s the t ransfer of future demand to the present . Summary of Supply and Demand The overview of the supply and demand for housing stock given in the previous sect ions , while lacking in some d e t a i l s and in r e f i n e -ment, does present a working model of the factors that are instrumental to a n a l y s i s . These factors are depicted in Figure 1. In Figure 1, current supply i s depicted by S^ S,-> and current demand by D q D n * At D r , e point in time, the p reva i l ing pr ice would be P^. If there i s a small increase in the supply to S^S^ that i s quite small r e l a t i v e to the number of ex is t ing units in stock, and no change in demand, pr ices would f a l l to P^, a small decrease. I f , . o n the other hand, demand increased to D^D^ while supply increases to S^S^, *A11 these authors re fe r to permanent income rather than current income. .16 Figure 1 Interactions of Supply and Demand for Housing I S l S2 Source: Hamilton, S.W., Public Land Banking - Real or Illusionary  Benefits? Report for the Urban Development Institute of Ontario , 1974, p. 10. 17 prices w i l l rise to P^. As there are physical limits to increases in supply as well as limits to the number os residential dwelling sites the planning process w i l l approve, the increases in supply for Canadian urban centres has been less than the increases in demand. If this, as Dr. Hamilton points out,'*'0 has been, the case, i t would account for a major portion of the price rises in Canadian housing in the past decade. "The problems of supply of housing and building lots, . as serious as they may be, are not as c r i t i c a l as the changes in demand. Growing population, rapidly rising incomes, demand for better housing, and increased con-centration in a few urban areas are creating insatiable demand for 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, in the farm of special income tax status for principal residences, has bolstered the already extensive demands for housing, especially owner-ship. Similarily, improved mortgage terms and provincial financing for second mortgages have a l l contributed to the increased demands."!! Effect of Surplus Demand on Land Pricing Given that an excess of demand vis-a-vis supply for the housin stock as a whole w i l l raise price levels for the new housing stock, coming on stream, dramatic changes w i l l occur in the prices paid for serviced dwelling sites through the action of leverage. Even more dramatic price changes w i l l take place for raw land due to the effect of compounded leverage. Table 1 sets out some assumptions about the average price levels of existing housing as these price changes occur through time. The builder w i l l take his pricing clue from the average price of comparable houses in comparable locations to the one he i s going to build. Instinctively, he knows that hre-cannot influence the 18 Table 1. Existing Duelling Stock Price Rises Through Time. Percentage Percentage Change Change Year 1 Year 2 Year 3 Year 1 to 2 Year 2 to 3 Average Price Level of Existing Comparable Houses in Comparablef $ $ Locations 26,000 30,000 38,000 + 15% + 27% + k6% overall price of housing as^ the aggregate increment to housing stock in any one year is only tuo to four per cent Df the total existing stock. He knous that i f his price level is 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 level is too lou, a crafty speculator u i l l s e l l existing housing to buy the builder's product at an immediate 'profit' to the speculator. The builder also instinctively 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 f i n -ancing terms and the increased status of ouning a neu home. The effect of the builder's pricing of his house for sale on the maximum prices that he u i l l pay for serviced residential duelling sites is demonstrated in Table 2. Clearly, i f he receives more for;his house from year to year, he can afford to pay more for the l o t ; The actual price he pays u i l l be the end price for his house, less the costs of construction and profit. If house prices rise more on a percentage basis than construction costs rise on a Percentage change Year 1 to 3 19 percentage basis, then positive leverage u i l l result. For instance, as Table 2 demonstrates, i f house prices rise by 27% uhile building costB go up by 20%, lot prices u i l l escalate by 41%. Negative leverage i s also a distinct p o s s i b i l i t y . Assume that house prices remained constant at $30,000 uhile construction costs rose by 20%, from $20,000 to $23,000, lot prices uould drop from $9,200 to $7,000 - a 23% decrease. Table 2. Effect of Leverage on Residential Duelling Site Prices. Percentage . Percentage Percentage change change change Year 1 Year 2 Year 3 Year 1 to 2 Year 2 to 3 Year 1 to 3 Price of , home built by builder $30,000 $34,500 $43,800 +15% +27% + 46% Building costs & Profit 20,800 23,000 27,600 . + 10% +20% + 33% Maximum Resident-i a l Duell-ing Site Price 9,200 11,500 16,200 +25% + 41% + 76% The developer, public or private, i s part of the pricing process. The builder takes his pricing clue from the price level for existing comparable housing. The developer takes his pricing clue from the, maximum residential duelling site price lev e l . The price that the developer pays for rau land is leveraged in the same way as the price that builders pay for serviced duelling sites. If the price paid for a serviced site'increases more on a percentage basis than the servicing casts the e f f e c t w i l l be upward leveraging on the price paid for raw land. I f the servicing costs escalate more rapi d l y than the percentage price increase for serviced s i t e s , the e f f e c t w i l l be downward leveraging on the prices paid for raw land.' Table 3. Effect of Leverage an Raw Land Prices. Percentage Percentage Percentage change change change Year 1 Year 2 Year 3 Year 1 to 2 Year 2 to 3 year 1 to 3 Price paid by builder . for serviced building s i t e $ 9,200 11,500 16,200 +25% + 41% . + 76% Servicing, costs + municipal imposts + . p r o f i t s 5,20.0 6,300 9,100 + 21%' . +45% + 75% Maximum raw land price per s i t e 4,000 5,ZOO. 7,1QD +30% + 37% +78% Note that Table 3 also demonstrates negative leverage' i n the t r a n s i t i o n i n raw land prices from year 2 to year 3. Servicing costs i n the hypothetical example have ri s e n from $6,300 i n year 2 to $9,100 i n year 3. In the same year, the price paid by the builder for serviced building s i t e s increased by a lesser percentage Df 41% frtim $11,500 to $16,200. The effect on the maximum raw land price per s i t e i s negative leverage. The price paid far a raw l o t increased only 37% from $5,200 to $7,100 while the price paid far a serviced . 21 lot increased by 41%. Consider the implications for the price paid for rau lots i f the price paid by the builder had only risen by a much lower percentage. Table 4 points out negative leverage. Table 4. Negative Leverage. Year 2 Year 3 Percentage change Price paid by builder for serviced building site Servicing costs + municipal imposts + profits Maximum raw land price per site $11,500 13,225 6,300 5,200 9,100 4,125 + 15% + 45% - 21% Effect of Surplus Demand on the Supply of Housing Units to the Market If the price of existing housing stock is 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 for his product i f he waits. If the expected increment in price is considerably more than his holding costs for the finished house, he w i l l tend to withold supply from the market. He withholds supply in a very simple fashion. He simply prices the house at uhat he expects future price levels to be, thereby transferring present supply at present market prices into future supply at' expected future market prices. The builder w i l l not often uithhold supply for any considerable period of time. F i r s t l y , the holding costs are too onerous. In effect, the builder has to finance the entire cost of the lot plus 22 the coat of construction of the house at current interest rates. Secondly, the builder needs his capital to buy another lot and start the construction process over again. Price (1972) pointed out that 12 builders are characteristically under capitalized. Thirdly, the builder is always concerned about temporary setbacks in the market even though the general direction is upwards. The builder knows that temporary setbacks in price add to his carrying costs in reducing the profit level that he w i l l receive from the eventual sale of the house. Fourthly, the builder is usually aware that he w i l l earn a higher return on his capital invested i f he is to s e l l the house and reinvest the proceeds in 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 lots to be positive in direction. In summary, i t is not to be expected that the builder w i l l withhold his product from the market for long periods of time but he wi l l tend to withhold i f the short term price levels 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 in pricing for existing housing stock. The builder knows that his 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 rises for existing stock are effecting positive leverage on the price structure for serviced dwelling sites. Normally, the developer w i l l not withhold lots from the market for long as he is faced with the same problems as the builder. Carrying costs are too high and capital is required for the purchase of raw land. The developer w i l l only tend to withhold i f the short term price rises are dramatic. 23 n • The holder of rau land also has expectations as to the future price levels for rau land. These expectations u i l l be p a r t i c u l a r l y fueled when the effect of compounded leverage is uork-ing positively both on the price of serviced lots and also an rau land prices. The landholder in these periods 'knous' that his land u i l l double in value next year. The landouner is quite reluctant to s e l l . Furthermore, the landholder i s in an excellent position to wait for further abnormal price increases. The landouner knous that his carrying costs are very lou, particularily in relationship to the amounts that he expects to receive from further uindfall gains, • The landholder tends to withhold rau land from the market in periods of abnormal price increases. 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 for eventual conversion into dwelling units. Coliectively, landowners are working in their own best interest by withholding land from the market. 24 Footnotes Edmund V. Price. "The House Building Industry in Vancouver", Unpublished Master's of Business Administration thesis, the University of British 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 British 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 in Residential Real Estate", Journal of P o l i t i c a l Economy 66:131-153, 195B. 5 , E. Oksanen, "Housing Demand in Canada, 1947-1962: Some Preliminary Experimentation", Canadian Journal of Economics and Po 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 Statistics 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 Statistics 46: p.88, 1964. 8 Greater Vancouver Regional District, "The Housing Issue" A Discussion Paper for the Greater Vancouver Regional District, prepared by the GVRD Planning Department (Vancouver: The Greater Vancouver Regional District, Feb. 13, 1974), p. 4. 9 S. UJ. Hamilton, Public Land Banking - Real or Illusionary  Benefits, Report of the Urban Development Institute of Ontario, 1974, p. 9. Ibid., p. 9. U I b i d . , p. 9. E. Price, Op. c i t . 25 CHAPTER III SUPPLY AND DEMAND FDR HOUSING IN METROPOLITAN VANCOUVER Chapter II dealt uith the supply and demand for housing in theoretical terms. Analysis of the GVRD housing market verifies the contention that the demand for residential duelling units in this region exceeds the supply. v Demand for housing may be measured as a function of population and income. "Growing populations, rapidly rising incomes, demand for better housing and increased concentrations in a few large urban areas are creating insatiable demands for housing and land"* In the Greater Vancouver Regional District the prices of housing, partic-ularly single family dwellings, have been:increasing rapidly (Refer to column 5 , Table 1 ) . It may be argued that the price of housing is reaching a point where the typical consumer of housing cannot purchase the same house lie bought two years ago in today's market, as the increases in costs of housing have exceeded the increase in his gross income required to satisfy the conventional qualifications for mortgage financing. The fallowing analysis supports this con-clusion. Houever, this may not be interpreted as an indication that the demand for housing should decrease. A brief 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 is a strong demand in the housing market in the G.V.R.D. • • -MB Demand for Housing as a Function of Income The industrial workers of British Columbia composed 42% of ' 2 the total labour force of 1,000,045 in July 1971. Table 5 indicates the gross monthly income of the average industrial worker between 1963 and 1973 and relates these figures to the average prices of . existing and new homes in the Greater Vancouver Regional District and the dollar increase in the prices of these homes between 1963 and 1973. These figures are related to the increase in 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 in the GVRD in 1973 with a 25% down payment his monthly principal and interest payments would be $56.84 higher than they would have been for a home in 1972 and this increase is $21.84 greater than the increase in his gross monthly income for the same period. Prior to 1973 the monthly increases in gross income have been greater than the increase in monthly interest and principal payments required to finance the purchase of a new home even in the case where there was a 5% down payment. If an industrial worker in B.C. purchased an average priced home in the GVRD in 1971 for $26,471 (column 5, Table 5) with a down payment of $6,617 (25%) the monthly mortgage payments at the prevailing rate of 10% in 1971 on a debt of $19,853 would be $177.59 of principal and interest amortized over 25 years., The maximum debt permitted with a 30% debt service ratio would have been $198.24 (column 4, Table 5). The debt service is below, the required income. If one considers the purchase of an average existing home in tha Greater Vancouver Regional District in 1973 according to the Table 5 The Price of Homes', i n Metropolitan Vancouver Re l a t i v e to 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 D o l l a r % change Maximum Average D o l l a r Gross change i n income amount of p r i c a change income i n ; monthly ' of- i n '. of aver- income income s i n g l e p r i c e age to ser- family worker. vice a dwell-i n B.C. mortgage ing.s i n debt Metro' .'..'•' based an Vancouver • 30% ' 'debt service r a t i o Average annual, i n t e r e s t rate's •"••' Tha annual The monthly increase i n increase i n i n mort-gage debt u i t h a . 25% doun payment mortgage payments of p r i n c i p a l and i n -t e r e s t u i t h a . 25%•down payment The annual increase i n mortgage debt with a 5% down payment The monthly I n -crease i n mortgag payments of p r i n c i p a l and i n t e r e s t with a 5 down payment 19S3 8390.43 $117.13 $12,637 _ 7% 1954 407.81 $17.38 4.5% 122.34 13,203 . $566 " 7 • 8424 8 2.99 S 537 8 3.78 1955 435.41 28.60 7.0 130.92 '13,965 762 . 6 7/8 511 '.- 3.47 723 4.85 1555 . 455.49 29.08 6.7 139.65 15,200 1335 7 3/8 1001 . 7.24 1268 9.06 1557 495.17 30.68 .6.6 148'. 85 17,836 2636^ 7 7/8 1917 14.35 2504 18.89 • 155a 523.29 . 27.12 5.5 156.99 20,595 2759 8 7/8: 2069 16.81 . 2621 21.32 1959 ' . 560.52 32.23 7.1 168.16 . 23,939 3344 9 1/4 2508 ' . 21.11 3116 • 26.19 1570 597.87 33.35 6.7 179.36 24,239 1300 . 10 3/8 915 '. 8.28 1235 11.04 1971 650.83 62.96 10.5 • 198.24 26,471 '. 2232 . 10 •'. 1614 '•  14.32 '..• 2120. 18.79... 1572 . 713.72 53.09 8.0 214.18 29,714 3243 •9 1/8 ' 1432 20.08 .""' 3080 25.93 1573 748.92 35.00 4.9 224.68 38.561 8847 9 1/2 - 6635 56.84 8^04 72.34 3urce: (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 prices of single, family dwellings i n the GvRD derived from Real Estate Trends i n Metropolitan  Vancouver. Published by the S t a t i s t i c a l Survey committee of the Greater Vancouver Real Estate Board Association 1963 to 1973. (7) Real Estate Trends i n Metropolitan Vancouver 1963-1973. (8) The annual increase' i n the required loan to purchase'a home i n Metropolitan Vancouver with a 25%' down payment.. (9) The monthly increase In mortgage payments Df p r i n c i p a l and in t e r e s t amortized over 25 years with a down payment of 255 (10) The annual increase i n the.required mortgage, loan t o purchase a home i n Metropolitan Vancouver with a 5% down payments (11) The monthly increase'in the. mortgage payments of p r i n c i p a l and in t e r e s t amortized over 25 years with a down ' payment of 5%. 28 c r i t e r i a ;';used in Table 5 uith a 25% doun payment of $9,640 the monthly payments of principal 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 ratio, the monthly payments greatly exceed those permitted,$224.68). This very element-ary analysis excludes the monthly calculation of property tax uhich would be added to the principal and interest payments uhen calcul-ating the minimum required 30% of gross income to satisfy the debt. Houever, i t is obvious that the average industrial uorker is not capable of purchasing the average priced home in the Greater Vancouver Regional Dist r i c t . One may argue.that the purchaser may turn to alternative sources of finance which do not consider the debt service ratio as a major factor in 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 slightly higher interest rate permitting a slightly higher debt to service ratio. In 1973 the cost of an average priced home in the GV/RD increased by $8,847. A 25% doun payment requires $2,211 cash in addition to the amount required for a home in 1972. The average industrial uorker would have to generate an additional $2,211 in savings or would have to save approximately 24% of his gross income for 1973. It should be noted that the preceding analysis merely gives an indication of the relationship between the incomes of a large portion of the labour force and their capacity to finance homes purchased in 1973. There are many important variables that have not been considered. A most important conclusion is that even i f this argument i s accepted, there is 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 recog-nition of a very important economic condition that puts the housing market in a unique analytical situation. Additions to the supply of housing account for a very small portion of the total supply. The total stock of single family duellings in the GVRD is estimated to be 215,445 for the year of 1971.^ The addition to the housing stock in 1971 in the form of single family duellings uas approximately 5,674 or approximately 2% of the net stock. Approx-imately 6,726 units uere added in 1972 and 5,525 in 1973, yielding 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 in relation to . the total 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 in 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 in 1973. After paying his mortgage off, he has approximately $18,000 cash uhich he uould use as a doun payment touards the purchase of another home. It is 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 position. Combining the activities of home ouners uho have realized 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 far housing does not require a significant number of purchasers to give i t strength. A demographic analysis u i l l reveal that increases in population and prospective home, buyers in the GVRD has created a sufficient demand in the housing market to keep prices high. indicates a steady population grouth in the GVRD betueen 1966 and 1.971 and produces a basis for forecasting significant increases in population in the future. A brief consideration of each component of grouth provides a good indication of the impact this grouth u i l l have on the housing demand. Statistics Canada indicate that the f e r t i l i t y rate uhich is taken to be the number of children born to a female during her entire reproductive l i f e span i s levelling off. In relation to Figure 2 the follouing comments may be made regarding f e r t i l i t y rates according to Statistics Canada. Analysis of birthrates, mortality rates and migration rates Figure 2 F e r t i l i t y Rates 2 . 4 High 2 ~ -' - Lou 1960 1965 1970 1975 1980 1985 Source: Population projections for Canada 1969-1984, Statistics Canada 1970. 31 . - There exists 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 rate i s the medium and u i l l be used as no evidence i s available to the contrary. - The a r r i v a l of a t h i r d c h i l d does not generally a l t e r a family's need for family housing as does the a r r i v a l of the f i r s t and second c h i l d ; therefore, the projections to 1984 have l i t t l e e f f e c t ; the move from an apartment to a single family or a row duelling i s usually 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 rate prevails say to 2.8, then there u i l l be s i g n i f i c a n t population effects but i n terms of the household these u i l l not be affected u n t i l the la t e 1980's. A review of an analysis 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 fact that the number of births i n the GVRD uas 10% lowe than the expected number of births using the known rates for a l l of 5 B.C. Thus, the trend of population growth i n t h i s area should be re-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 analysis has found t h i s rate to be f a i r l y constant. Migration rates are the most important i n an analysis of the GVRD. Migration rates are most important i n a population analysis of the GVRD^ . Approximately 76.5% of the population increase between 1966 and 1971 i s accounted for 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 in the age bracket of 20 to 28 this aspect of population growth should have an effect on demand for housing. It is not known what percentage of these people would qualify for financing of the homes in the present market, however, since this 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 is important to note that they may purchase homes at various price levels in the housing market absorbing the homes vacated by those moving into more or less expensive homes.. The forecast for future growth in the GVRD indicates that pop-ulation should increase by 141,678 from 1,028,345 in 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 total 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 is 21% of the total population increase per annum. The population s t a t i s t i c s confirm the fact that there i s a significant expected growth rate in population particularly in the age bracket most likely to enter the housing market. The entire demand analysis of this chapter has concentrated on single family dwellings in order to interpret the demand situation of this particular sector of the market. There- i s sufficient information available to suggest that the demand for dwelling units as a whole is very strong and w i l l maintain i t s high level in the future. A review of st a t i s t i c s provided by Central Mortgage and Housing Corporation and the Economics and Statistics Division of Canada confirm this fact. 33 Table 6 relates houshold formation to the total number of duelling starts betueen 1961 and 1976. Table 6. Household Formation and Duelling Unit Starts in Metro-politan Vancouver 1961 - 1976 Household Formation Familv l\lon Family Total Duelling Unit Starts 1961 - 1966 23,9011 ' 19,700 43,600 46,391 1966 - 1971 42,100 22,400 , 64,500 69,851 1971 - 1976 55,400 35,600 91,000 98,280 Source : CMHC, Canadian Housing Statistics yearly additions and Kirkland, J.S. , Demoqraph ic Aspects of Housing Demand to 1986 CMHC, Economics and Statistics 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 is 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 falling short of the projected demand. In 1971 there uere 15,553 starts, in 1972 there uere 14,126 and in 1973 there uere 14,953 (reference to Tables 7, 8, and 9 provide a detailed breakdoun of starts). This figure is 4,703 units short of the projected duelling unit starts of 1971-1976 per annum required to satisfy housing formation. Thus given the projected popu-lation grouth and housing formation and the total production of duelling Table 7. Residential Building Activity - Duelling Starts in Metropolitan Vancouver 1967-1973 1967 1968 1969 1970 1971 Total 1972 1972* 1973 Single detached 5,980 5,146 4,763 4,482 5,283 25,654 5,625 7,300 6,726 -Semi Detached and-Duplex 348 512 402 350. 391 2,003 368 368 . 362 6,328 5,658 5,165 4,832 5,674 Al. 27,657 5,993 . 7,668 7,088 Rou 208 311 580 839 1,057 2,995 1,635 945 Apartments 7,085 9,721 11,945 7.762 8,822 . 45,335 6,896 6,920 7,293 10,032 12,525 8,601 9,879 A2.48,330 8,103 8,531 7,865 Total Annual Starts 13,621 15,690 17,690 13,433 15,553 75,987 14,096 16,199 14,953 * Includes Langley, Maple Ridge and Pitt Meadous Source: CMHC Table 8. Residential Building Activity - Single Family Duelling 1967 — 19 / -> Starts in Metropolitan Vancouver Vancouver Burnaby Neu Westminster North Vancouver West Vancouver 595 528 393 . 405 523 558 498 330 42 15 6 8 531 514 454 412 268 242 155 118 1,959 1,857 1,506 1,273 595 2,516 601 699 596 2,505 496 544 22 93 21 19 539 2,450 438 524 114 897 139 165 1,866 8,461 1,695 2,131 Coquitlam Port Coquitlam Port Moody Richmond Surrey White Rock Delta Miscellaneous Total Metro-Vancouver Langley - City Langley - Municipality Lions Bay Maple Ridge Pitt Meadows 819 428 231 206 599 341 413 310 168 113 63 1*2 248 305 46 1,932 1,968 432 350 289 23 52 28 3 "•Includes . duplexes Source: CMHC Table 9. Res idential Building Activity - 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 Miscellaneous Langley - City Langley - Municipality Lions Bay Maple Ridge Pitt Meadows 1967 1968 1969 1970 1971 Total 1972 1973 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 .: i 3 3 868 197 18,387 8,498 3,170 5,084 1,050 1,936 1,119 149 943 183 2,610 1,027 742 675 707 6,803 8,663 •9,711 4,974 6,038 36,189 4,330 5,761 241 59 102 503 130 158 837 231 134 516 •• 140 370 • ' ' 482 426 75 ' 2,579 986 839 . 555 64 188 64 78 402 791 1,202 1,026 983 4,404 619 330 10 72 6 69 379 26 104 696 595 189 131 1,424 469 159 549 845 1,575 95 343 3,034 ' 3,029 541 1,133 996 1,420 347 96 336 989 492 21 88 578 1,612 2,601 2,858 7,737 2,859 ' 1,838 7,293 10,032 12,525 8,601 9,879 48,330 7,808 7,865 295 354 8 66 264 106 723 370 Source: CMHC 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 and 1973. The amount of the increase is $12,965. 71% of this increase is 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 is related to the fact that the housing stock is much larger than the increment to housing. Relating this important realization to the cost figures 38 determined in Table 12 the supply problem is put into a totally neu perspective. 39 Table,10. Cast of Construction of Single Family Duellings in Metropolitan Vancouver 1960-1973 Year • Cost/sq. f t . std 1200 f t . bungalou Material and labor cost Annual Dollar Change Annual % Change Cost Index 1964 10.60 12,720 1% 104.3 1966 11.67 14,004 1,284 7% 113.2 1967 12.49 14,988 984 7% 116.8 1968 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 Source: Real Estate Trends in 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 in The Greater Vancouver Regional District 1964-1973 Price of Serviced Annual Dollar Annual % Lot Change Change 1964 $ 5,061 + 411 -8% 1966 5,810 749 14% 1967 7,710 1,900 32% 1968 . 9,600 1,890 24% 1969 • 11,500 1,900 19% 1970 .;; '•'.'A 11,520 . 20 0% 1971 13,200 1,680 14% 1972 14,708 1,508 11% 1973 23,833 9,125 62% Source: Determined from Table IX The Housing Issue prepared by the Planning Department of the GVRD 1973. rable 12. The Cast of Housing in Greater Vancouver Regional District in Terms of Building Costs and Serviced Land Prices 1964-1973. /ear - total Cast Material & Land Annual Annual Change due to 1 Change due serviced Labour as as a Percent Dollar to mat. & labor and cost land + a % of Total % of change change cost labor + Cost Total in total in Total % Dollars materials Cost cost 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% - 324 -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 ^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, Serial #11-003. Employment Earnings and Hours, August 1971 and August 1973 Serial #72002. "^ The Greater Vancouver Regional District, The Housing Issue Vancouver: A Report by the Staff of the Greater Vancouver Regional District Planning Committee, p. 12. i k Central Mortgage and Housing.Corporation Single Family Dwelling Statistics 1971, 1972, 1973. • 5 The Greater Vancouver Regional District, Population Forecast Vancouver GVRD Planning Department 1973. ^Population Forecast, Op. C i t . 7 Population Forecast, Op. Cit . fl Population Forecast, Op. Cit . 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 residential duelling sites have been documented clearly. The increases in the size of the existing housing stock have not been sufficient to meet the demand expect-ations generated by net family formations and net migration into the region. It i s instructive nou to look at the supply side of the supply/demand equation in order to gain some insights into the abil i t y of the suppliers (private developers and/or public agencies) to meet the demands for residential duelling units uithin specified time horizons.* Static Analysis of the Residential Duelling Unit Supply Process Vieued as a static program frozen at any given point in time, the potential supply of residential duelling units in the region may be compared to mathematical sets (see Figure 3). These sets or.} limitations are peculiar to the region under consideration. Such limitations may or may not occur in other regions. Perhaps a striking •These expectations do not take into account the limited expansion possible of the process of conversion of residential duelling sites to actual residential duellings. Even in an unlimited number of residential duelling sites available, there is a fi n i t e capacity of the construction industry to build homes due to incipient shortage of materials, labor management and capital. FIGURE 3 Diagram of Static Analysis of Residential Duelling Unit Supply Process example of such differences would be Houston, Texas, where the non-use of zoning by-laws precludes the creation of development areas. The major set is the supply of urban designated land within the region at any given time. This would be the acreage of land either zoned for urban residential usage or land which the municipal or provincial authorities w i l l permit eventually to be rezoned into urban residential land. A specific example of the land within this major set would be the acreage designated as non-agricultural frozen land designated by the individual municipalities as sufficient for each municipality's urban needs for the five-year period from 1973 to 1978. These areas, as approved by the Land Commission administering the Act on behalf of the Province of British Columbia, set the limits 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 is sufficiently close to trunk sewers so as to permit development on an economically sound basis. Someone, either the private developers and/or the municipality concerned must underwrite the costs involved in providing lateral sewer links, water lines and roads to the land under consideration. Although considered a static supply for the sake of this analysis, the number of acres varies as a direct result of the relationship between lot prices, servicing costs and raw land costs. As lot prices rise, i t may become more feasible to buy less expensive land further away from the existing infrastructure and to incur the "higher costs of providing services to that land. Within this set, the supply of economically feasible land w i l l vary with the price of lots which w i l l , in turn, be a function of the relative 46 shortage of supply in the existing and incremental, housing stocks in relationship to effective demand. Thus, uithin this set, the economic forces of the market could be at uork:- the supply of service-able land u i l l increase in relationship to the prices paid for the product, serviced land. This analysis does not take into account the externalities uhich may accompany this development of land further auay from this existing infrastructure. Examples of such external-it i e s uould be the provision of schools, longer arterial roads and increased community services. The set of land, uhich is economically feasible to service, is further limited through the creation of a further subset or subsets of land uithin the set of land uhich is economically feasible. Municipalities in the region designate "development areas" in uhich the municipalities u i l l permit development to take place normally. These are circumscribed areas set out by the municipal planners in con-sultation uith the municipal council. Furthermore such development areas may be given time horizon pri o r i t i e s by the municipality con-cerned. Far example, a municipality u i l l designate an area as Develop-ment Area 1 in uhich a certain level 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 infra-structure to that area - particularly seuage treatment f a c i l i t i e s . The boundaries of these development areas may or may not be f i n i t e . In 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. Developers and/or landowners may be able to convince council that the advantages W) to this municipality of tying the non-designated parcel under con-sideration to the infrastructure could outweigh the disadvantages to the municipality. The incidences of such leakage are reduced in the region, houever, due to the splintering of land ounership patterns uhich make assembly of a sufficient large parcel to justify the additional off-site costs uhich uould be incurred by the developer in tying the parcel outside the designated area into the existing infrastructure. It i s important to point out that the number of acres included uithin the subset of designated urban areas is not the sole deter-minant of the number of residential duelling units uhich may be supplied from the land in this subset. The overall density of develop-ment permitted u i l l affect the number of residential units that could be supplied. Such overall densities are the subject of an interaction betueen developers proposing projects and the municipality approving developments. Some municipalities u i l l rely solely upon existing zoning changes through land use contracts. For instance, i f only single family density uere permitted by the municipality concerned, then the number of residential duelling units potentially supplied uould be considerably louer than i f multiple family or mixed density uere permitted. Supply of Land Assumed Density Factor Potential number of residential .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 uithin this designated development area(s) times the average overall expected density to be permitted in that area, consideration should be given to the lim i t -ations of the potential number of residential duelling units to be supplied. Due to limitations of land assembly uithin the specified area there is a subset of land uithin the set of development area(s) uhich is 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 in most instances i t i s much smaller. Parcels uithin an assembly area are often interrelated to some degree. Many parcels are "key" in that the road patterns, sanitary and storm seuers, sanitary seuer pumping stations,must be located on these parcels to efficiently service the area. Frictions in the assembly process arise from a number of different factors. Instrumental amongst these factors uauld be: 1. Landowners' unuillingness to s e l l due to misplaced expectations that land may be eligible for a higher and better use than that des-ignated. Far instance, owners often feel that their land is sutiable for multiple family use rather than single family. Such expectations often may have been generated from observations 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 their preference to con-tinue enjoying the use bo which the land is presently put in spite of the lure of monetary rewards. For instance, many smaller acreages are held by older people who want to "last out their days on the land". Many farmers wish to continue farming on the land presently under their control. k3 3. Presently, use of a particular 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 overall price permitting economic development. One particularly vexing problem in the Greater Vancouver and Louer Fraser Valley region is the predominance of expensive homes on one and tuo acre sites. h. Landouners inflationary expectations have been fueled by the rapid price increases in the region. Reluctant to s e l l their land at a l l , landouners often price the land at levels uhich discount inflationary expectations far into the future. 5. Landouners often distrust participants in the real estate industry. These landouners adopt the attitude of "burying their head in the sand" and refuse to even discuss the possibility of sale. The coincidence of these parcels uithheld rises almost geo-metrically uith the number of landouners uhose land uas to be assembled in a given area. In practical terms, the assembler knous that he u i l l run into.a greater resistence in gathering together thirty acres from ten separate landholders than in putting together a comparable thirty-acre parcel held by three ouners. The value of existing structures usually rises significantly 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 thirty parcel held by ten landouners uhile only three homes may be on the comparable thirty-acre parcel. In aggregate, the combined effect of splintered landholdings and/or holdouts are considerably important uhen considering the 50 potential supply of residential duelling units uithin the region. It may be possible uithin a limited time horizon to assemble a l l or even a significant portion uithin a designated urban development area, but, i f such i s not the case, the residential duelling supply pipeline becomes constructed at the outset. The effect i s most pronounced i f the municipality holds the boundaries of the development area constant and does not permit significant "leakages" of potential developments from outside the development areas. Dynamic Analysis of the Residential Unit Supply Process Given the pool of potential residential duelling sites as indicated by static analysis, i t is nou necessary to turn to a dynamic analyses of the production process over time to determine the relative efficiency or inefficiency of this production process. 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 residential duelling units to market and the attrition in numbers of duelling unit sites uhich never can come to market or uhose production u i l l be delayed beyond normal expected time horizons. It i s one thing for developers and/or public agencies to have rau land in inventory and quite another for these rau acreages to be transformed into serviced building sites ready for residential construction. Figure 4 sets out the dynamic process in simplified diagramatic form. The time taken for the conversion of rau land into serviced residential sites can vary considerably from municipality to municipal-ity in the region. The time taken to bring serviced residential building sites to market can also vary considerably uithin a municipal-ity 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 • • H - P u c a f4-Ol C . • H cn to CO u u co •a cn ca CQ cn cu • P ai c - P n cn aix: c cn • H zi r-\ a rH rH CO -C 3 - P attrition in numbers a tn 0) tn tn ra PL CO xa E - P n c C QJ E c a. • H a rH tn co in > a co _ l TP • c D • H +5 a c G -Dl C • H cn co 03 Fn a c •rl A time <7 X I E to cn tn ra TJ c CO Cf-• • •rH - P a. Q] U C •rH E a fH t i -er co .Y ra -p c D • H - P U =1 FH - P cn c: o u c 3 cn c •rH CO 3 -a a JZ tn co ti_ E•rH a Guiding the development through the municipal approval process A 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 happen quite quickly or i t may be draun out over a considerable period of time. It may be that the developer and/or public agency has sufficient land in inventory uhen the creation of a development area is announced by the municipality. It may be that an experienced assembler can put together a parcel sufficiently large for development uithin a matter of ueeks. In most instances houever, land assembly in the the region is a slbu, frustrating task uhich takes at least several months and even may last for years. Competition betueen the developers is intense. A number of developers may be uorking on an area simultaneously. Each may acquire crucial "key" parcels, frustrating the attempts of the others. Often, long periods of intensive negotiation betueen the developers u i l l de-termine uhich de.veloper(s) end up uith the developable package. A l l assemblies are subject to the time consuming problem of dealing uith "holdouts". It may be in the end, that their efforts come to naught. Competition amongst the developers is not of interest for the crucial question is the number of rau sites uhich may be gathered to-gether in aggregate by a l l the participants. The point to note is that there may be considerable delays encountered by the participants in assembling the land due to competition among themselves. The time taken to guide subdivisions and/or multi-family building sites through the municipal approval process is the c r i t i c a l element in 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 problems inherent uith grouth. 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 in the process of development approval. The process of approval i s being constrained by the multitude of issues uhich arise in the cases of equating social costs uith private costs. It is unfortunate that uithin the complexity of the process i t is 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 in the existing housing stock and the trade-off of the increased costs of development imposed upon the municipality vs the benefit of municipal population grouth. The financial position of municipalities and the role of the provincial government has an important impact upon the time required in 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 exist. In some cases the time created by a slou approval process is an asset to the municipality in the respect that i t may require the additional time to determine the optimal type of development given i t s financial position or succeed in impressing the provincial government that a serious municipal finance situation exists. The planner also has an important role regarding the efficiency of the dynamics of the approval process. A comprehensive plan related to the financial position of the municipality and the optimal develop-ment situation required in order to satisfy the municipal budget 54 provides the superstructure in which the planner may introduce his concepts regarding the services that are required in the development of a municipality. The approval process must function uithin the general framework outlined by the planner. If the objectives and goals, of the municipality are not well established in a comprehensive plan the micro economics of the approval process cannot function properly. If the engineer or school board or other various authorities involved in the approval process are not cognizant of an overall .municipal planning policy with specified objectives, the approval process•is burdened,as various authorities attempt to relate their function of approval to the undetermined policy. The local politician also has an important function regarding the time required for approval process. There is a very important trade-off between the technical assets or disadvantages of a develop-ment and i t s impact in the p o l i t i c a l environment in the community. The primary concern of the local politician is to observe that the ratepayer i s not being harmed by a development in respect that public and social costs created by a development do not exceed the benefit to the community as a whole. Some of the considerations that the politician would take into account are: 1. Tax burden of existing residents . • . 2. Resistence of residents to growth'in population 3. Environmental costs 4. Desire of residents to upgrade the quality of residential units by encouraging consumers.of a high income scale 5. Resistence to increased density (multi-family projects) 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 resu l t s uould be a decrease in the number of r e s i d e n t i a l units brought on the market and increases in the time taken to obtain approval . The subdiv is ion construct ion stage of the dynamic process i s not unduly cons t r i c t ing in terms of t ime. Serv ic ing of land can usual ly be accomplished in three to s ix months given normal cond i t ions . Mater ia l shortages are houever, a problem at cer ta in t imes. IMo a t t r i t i o n s in supply occur in that no duel l ing s i t e s uould be los t at th is stage. Duel l ing unit construct ion time lags do occur but are not unduly c r i t i c a l . Res ident ia l duel l ings usual ly take from three to nine months to complete. Completion periods can be lengthened through shortages of labor and mater ia l s . IMo a t t r i t i o n in the number of r e s i d e n t i a l duel l ing units occurs at th i s stage. 56 Footnotes ^Andre Derkouski, Residential Land Development in Ontario, A Report prepared by the Urban Development Institute of Ontario, November, 1972. 57 CHAPTER V RDLE OF PUBLIC COMPANIES IN CANADIAN RESIDENTIAL DEVELOPMENT Pu 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 estate 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 estate companies o f f e r i n g stock issues 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 equity f i n a n c i n g s completed by neu entrants and/or e x i s t i n g companies during the years I960 to 1973. There are inadequate s t a t i s t i c a l records a v a i l a b l e to de-termine the exact extent of the p u b l i c companies' r o l e i n the pro-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 also d i f f i c u l t to develop a true p i c t u r e of the r e l a t i v e importance of the p u b l i c and p r i v a t e companies i n providing housing. P u b l i c company concentrations i n terms of b u i l d i n g s t a r t s , d o l l a r volumes or any other representative 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 instance, to date there i s no record of p u b l i c a l l y financed b u i l d e r s i n the Maritimes, but t h i s category of b u i l d e r plays and important part i n the Calgary market. In 1971, p u b l i c companies accounted f o r 43.3% of s i n g l e and semidetached s t a r t s i n Calgary. The important point to remember i s that there uere no b u i l d i n g companies uhich uere p u b l i c a l l y financed, oper-a t i n g i n Calgary i n the e a r l y 1960's. The change represents a considerable 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 1960-1973 -1973 1972 1971 1970 1969 1968 1967. 1966 1965 1964 1963 1961. 1960 Number of new com-panies 0 1 1 2 35 8 2 1 0 Total amount of equity financing (fMillion) 0 5 7 2 103 63 7 0- 14 Source: Financial Post Corporation Service, Record of IMeu Issues. CD 59 private builder in Calgary during the past feu years. Similar trends may be observable in other c i t i e s . / P r i c e (1970) painted to the acquisition of a steady supply of building sites as the important factor determining the maximum economic size of a building firm in the Vancouver region. It has been generally noted that ensuring a steady supply of • land is almost no problem for the smallest builders, and steadily increases as the builder's volume grous. Therefore, any situation uhich significantly increases the di f f i c u l t y , and hence the cost, of assembling suitable volumes of land is certain to louer the maximum economic size of a building : firm. The result is that in some cities uith the right com-bination of land.availability, market size and demand, and entrepreneurial talent, the maximum size is about 750, in other areas i t is about 250, uhile in Vancouver, largely because i t is a land-poor area, the maximum size is around : 100 units per year.-1-The role of the public company in residential land develop-ment is even more d i f f i c u l t to document. Statistics documenting sales of serviced building sites are often lacking. Where numbers are reported, i t is 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. Working from the r e s i -dential duelling statistics as incorporated in company sales, i t is d i f f i c u l t to sort out uhich sites uere company developed and uhich sites uere purchased from other supplies. Industry observers dD point, houever, to the increasing role of the public companies in financing land inventories. Large in -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 sites and residential duellings, achieve planning efficiencies and economies of scale. GD Companies cannot expand their 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^ Equity requirements, furthermore, are on the increase as raw land prices, climb upwards. Thorsteinson of Richardson Securities points to this trend. With the scale and complexity of real estate development ., in Canada increasing, the corporation is emerging as the most suitable form of business organization. The size and number of real estate companies seeking public financing w i l l increase in the years ahead.2 61 Footnotes Price, Edmund V. The Housebuilding Industry in Metro-politan Vancouver. Unpublished Master of Business Administration thesis, University of British Columbia, 197D. Thorsteinson, Ami 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 fifteen developers uhich uere generally knoun to represent the major residential 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 in the year from September 30, 1973 to September 30, 1974 (see Table 19). This figure is roughly a third Df the average number of residential duelling starts in 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 partially or completely someuhere betueen seven hundred and f i f t y to nine hundred acres in the area. The tuelve companies reporting held an aggregate of 4,457.09 acres. 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 held 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 Greater Vancouver and Lower Fraser V a l l e y areas as at September 3D, 1973" Table 14 tabulates the r e s u l t s . Table 14. T o t a l Acreage and Average P a r c e l Size of Inventory Held by Responding Developers T o t a l acreage held by twelve 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 u n i t s 4,457.D9 acres Average inventory 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 - twelve companies r e p l y i n g - 371.4 acres 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 inventory 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 held by the twelve companies f o r the pro-v i s i o n of r e s i d e n t i a l dwelling u n i t s i s not large at a l l . Consider the acreage held by p u b l i c companies i n other s e l e c t e d urban centres i n Canada. Although there i s no breakdown as to the ultimate use of the acreage nor the density of development i t may be assumed that the major portions of the inventory w i l l be used f o r r e s i d e n t i a l housing. Table 15 sets out comparisons between urban centres. Table 15. Rau Land Inventories in Acreages for Representative Major Public Companies in Selected Urban Areas of Canada - Based on 1972 Annual Reports of Reporting Companies Toronto Undifferentiated Montreal Vancouver Ottaua Edmonton Calgary as to location Totals Company A Company B Company C Company D Company E Company F Company G Company H Company I Company J Company K 4,512 1,171 77 623 35 8 370 20D 69 62.5 26.0 120 58 2,188 72 325. 436 610 5 /436 134 267 4,168 6,675 1,705 2,000 4,989 637 6,556 7,0000 1,171 2,218 6,115 . 2,000 ' 623 62.5 26.0 65 Number and Size of |\lon-Adjoining Parcels Held by Developers in  Inventory Respondents uere asked to detail number and sizes of non-adjoining parcels. For the purpose of this survey, non-adjoining parcels uere defined as geographically separate parcels rather than legally separate parcels, to prevent confusion in the cases where assemblies of land would be composed of a number of adjacent parcels with separate legal descriptions. 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. The second largest was 317 acres. The average size of a l l the largest holdings reported by eleven developers was 88.5 acres. The smallest parcel reported was D.5 acres. 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 indicates a desire on the part of developers to concentrate their efforts on a small number of geographically separate parcels. This could be explained, in parti/, by the developers' reluctance to spend an undue amount of time travelling between different sites. The total number of separate parcels held at a count of 77 is quite surprising in view of the multitude of potential development sites in the Greater Vancouver and Louer Frase<r Valley areas. This is in effect a reflection of the developers' ability to uncover or assemble larger blocks of land. It is also confirmation of the desire not to splinter holdings. Geographical Distribution Table 16 indicates the geographical distribution of the lands held by the tuelve companies reporting. As uould be expected approx-imately 65% of the land uhere development is anticipated uithin five years is distributed uithin the Greater Vancouver Regional District and approximately 35% uithin 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 in the Louer Fraser Valley in the hopes of promoting a "neu town." Perhaps the lesson of premature inventory accumulation * has been learned in that the 2Q0D acre site is nou.classified as per-manent agricultural land. Surrey is the leading municipality in terms of land inventories held by these major developers. There are 755.9 acres or 35.4% of the net acreage held for development uithin the next five years uithin this one municipality. This confirms that commonly held vieu that Surrey u i l l be the action centre for development uithin 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 significant portions of the result as i n f i l l i n g has almost completely depleted the rau land in these municipalities. Land held by developers uould as likely 67 Table 16. Geographical Distribution of Land Holdings Throughout Greater Vancouver and Lower Fraser Valley. Aggregate :' r \ Figures for a l l Twelve Companies *;Including Residential Reporting - a l l Uses, ' .' 'v Area Gross Acreage Net * Acreage Percentage of total net acreage Vancouver 9.36 9.36 '•' 0.4% Burnaby 55.78 55.78 2.6% •' -"' Richmond 175.06 175.06 • 8.1% -•• j' ' ' • Delta 453.00 153.00 7.1% ^ • Surrey 755.90 755.90 35.4% Coquitlam Port Coquitlam • 142.00 142.00 6.7% Port Moody 7.50 7.50 ' 0.3% Langley 2,099.78 99.78 4.7%, , ^ "•' '•' Abbotsford Matsqui 64.00. 64.00 2.9% ' > Maple Ridge Pitt Meadows 131.00 , 112.00 5.3% , IMorth Vancouver West Vancouver 97.15 97.15 4.6% ' " '. Mission 317.00 317.00 14.9% V ' . ' :- • •. Other 150.28 150.28 7.0% TOTAL 4,457.09 2 ,138.81 Excluding parcels five years. where development is not anticipated for at least be held for redevelopment as development. The significance of the l/ancouver/Burnaby inventories uould increase someuhat i f potential duelling units uere to be counted in that the proposed densities :-uould most likely be higher than surrounding municipalities. Land uhere production starts uould be delayed beyond five years, from the date of this survey uere arbitrarily 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" agricultural 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 fore-seeable 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 cite the single most important reason, even though there may be several reasons oper-ative, at any one time. The possible choices uere placed alongside each time horizon so that the developer could cite 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 results. Developers predominately chose municipal policy as the single most important reason uhy development uas not in progress at the time 69/ Table 17. Most Important Single Reason Uhy Inventory not Being Serviced and/or Residential Construction in Progress IMou. Reasons as Selected by Developers Surveyed Time Horizon Most important single reason IMumber choosing reason Subdivision servicing and/or residential construction to begin within one year from September. 3D, 1973 Subdivision servicing and/or residential construction to begin later than one year from September 30/73 but before tuo years Subdivision servicing and/or residential construction to begin later than tuo years from .September 30/73 but before five years Subdivision servicing and/or residential construction to begin later than five years from. September 30/73 Lack of adjacent services / 1 Municipal policy 8 Corporate Policy . . 2 Market not yet ready for this type of residential unit in this area 0 Other - Building in immediate area 1 ..Lack of adjacent services 2 Municipal policy 4 Corporate Policy 1 Market not yet ready for this type of residential unit in this area 0 Other 0 Lack of adjacent services 1 Municipal policy 4 Corporate policy 0 Market not yet ready for this type of residential unit in this area 0 Lack of adjacent services 0 Municipal Policy 2 Corporate policy . 0 Market not yet ready for this type of residential unit in this area 0 Other - Provincial land freeze 1 70 of the questionnaire. Uith respect to land inventory uhich the developers f e l t uould come on stream uithin one year, eight of tuelve or 75% of the responses cited municipal policy. Developers eval-uating the land inventory uhich they f e l t uould be subject to starts uithin 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 listed municipal policy. Young (1974) documents the lengthening time taken ,for muni-cipal subdivision approval in the Greater Vancouver Region. Chapter , VII outlines the process uhereby municipalities set aside specific areas as development areas in order to control urban grouth. Uhile i t is beyond the scope of this thesis to verify fully the correctness of the developers' contentions, there is no question as to the point of vieu held by the developers uith respect to limitations in the supply of serviced duelling sites 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 for land in their in-ventories. Replies uere to be given in acreages uith density fore-casts in terms of anticipated number of residential units per acre in,those instances uhere residential use uas scheduled. Table 18 sets out the results. . , Table 18. Developers' Expectations as to Most Probable Uses for Their Land Inventories - Aggregate Figures for a l l . : '• Tuelve Developers Reporting Total acreage Anticipated number of residential units per acre Total number of anticipated residential units \ Single Family 1,899.48 acres 3.77 unit/acre 7,161 units Multi Family 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. units/acre 219 units Commercial 61.28 acres - •. Industrial . . 3.65 acres -•• - ' . Recreational 134.70 acres -Mixed usage '.i • 2,000.00 acres Unable to antici-pate at this time Development too f a r : i n future TOTALS .4,459.65 ••' acres 15,477 units 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 sites and/or residential housing uithin certain time horizons. Rau land is not the same as serviced building sites, nor are serviced building sites the same as residential duelling units. Each step in the process takes time to accomplish. Given that very feu more residential units could be brought on stream by the developers surveyed before the end. of the year than those in production nou, the f i r s t time horizon uas set as'present construction. Developers uere asked to report on the number of sites and/or units in production at the time of this -72 survey (see Table 19). Given that developers must acquire land far in advance of . production in 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 in construction (either subdivision servicing and/or residential construction) uithin .one year from the date of this survey. Due to the lead times required by the developer as described above, this production uould represent fa i r l y u e l l a l l the production that these developers could be counted upon to produce in that year. Neu land purchases uould most likely not be able to make i t through the various steps in the municipal approval process uithin that time. The number of units scheduled for production uithin one year i s also a fa i r indicator of the pro-ductive 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 in 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 is important to note that, even i f subdivision servicing : and/of residential construction uere to begin uithin 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 19. Developers 1 Expectations as to Time Before Subdiv is ion and/or Res ident ia l Unit Construction to" Begin on Lands Held in Inventories - Aggregate Figures for a l l Tuelve Developers Reporting Land in inventory for production Acreage IMumber of r e s i -den t ia l uni ts to be provided Subdiv is ion se rv i c ing and/or r e s i d e n t i a l construct ion i n progress at time of survey 377.81 Subdiv is ion se rv i c ing and/or r e s i d e n t i a l construct ion to begin u i t h i n one year from September 30, 1973 679.54 Subdiv is ion se rv i c ing to begin l a t e r than one year from September 30, 1973 but before tuo years 467 2,603 5,-020 2,530 Subtotal 1,524.35 10,153 Land in inventory for land banking Acreage IMumber^  of r e s i -den t ia l uni ts to be provided Subdiv is ion se rv i c ing and/or r e s i d e n t i a l construct ion to begin l a t e r than tuo years but before f i ve years from . September 30, 1973 Subdiv is ion se rv i c ing and/or r e s i d e n t i a l construct ion to begin l a t e r than f i v e years from September 30, 1973 535 acres 2,319 acres 2,265 1,275 r e s i -d e n t i a l uni ts estimated for 319 acres IMo estimate ' made for 2000 acres . A rb i t ra ry d i v i s i o n into land held for inventory and land held for land banking explained in tex t . 74 r e q u i r e d for the developer or non-associated b u i l d e r to complete c o n s t r u c t i o n . Therefore, land inventory on uhich s t a r t s may begin u i t h i n tuo years should not be considered as increments to the housing stock f o r a p e r i o d up to three years from the survey. Holdings uhere production s t a r t s uas not forseen f o r tuo or more years from the date of the survey uere considered as land bank inventory. This i s not to say that t h i s land u i l l not be converted intD s e r v i c e d land 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 to say that t h i s land banking i s not necessary f o r the developer i f he i s to r a t i o n a l l y plan h i s production. I t i s simply t D say that t h i s land should not be construed as land on uhich increments to the housing stock u i l l be constructed i n the immediate f u t u r e . Developers' Responses R e l a t i n g to Most Valuable P a r c e l s i n Their  I n d i v i d u a l Inventories 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  D u e l l i n g Units . Developers responding to the questionnaire uefe asked to s e l e c t the four most valuable holdings i n t h e i r 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 housing. I n s t r u c t i o n s uere provided to point out to the developers that a p a r c e l by t h i s d e f i n i t i o n should include blacks of land uhich u i l l be developed as a u n i t , rather than l e g a l l y separate p a r c e l s . The s o l i c i t i n g of information on i n d i v i d u a l p a r c e l s uas p a r t i a l l y a check on the summarized information that each developer s u p p l i e d on h i s master sheet i n the questionnaire and p a r t i a l l y an e x e r c i s e to obtain more d e t a i l e d information on i n d i v i d u a l p a r c e l s i n the developers' i n v e n t o r i e s . The 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 totalled .1855.55 acres uith an estimated net developable acreage to the order of 1720 acres. Results indicated in 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 miles from main.uater lines and 0.23 miles from presently developed areas. Respondents reported on the estimated year of development for the 37 parcels in question. Indications uere that 3 Df the 37 uere under development or scheduled for development in 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 1974 through 1975. 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 uithin 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 in 1972 and 7 out of 37 in 1971. In total, therefore, 29 of the 37 parcels or 78% uere acquired in the tuo years prior to the survey* The remaining parcels uere acquired at various times from 1962 through 1970. Table 21 indicates the year of acquisition. Comparing the year of acquisition statistics to the estimated year of development sta t i s t i c s confirms the vieu that developers in the region dd not normally build up land inventories in uhich ;, estimated time.to commencement of development greatly exceeds the 76 Table 2 0 . Est imated Year of Development - 'Most V a l u a b l e ' Pa rce l s ' as S e l e c t e d by Developers Est imated year of development Number of p a r c e l s to be developed 1973 . 3 1974 15 1975 6 1976 2 1977 1 1978 3 1973-1975 1 1974-1975 ?. 1974-1976 ' 2 1974-1982 1 1976-1977 1 T o t a l 37 Table 2 1 . Year of A c q u i s i t i o n - '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 by Developers Year Of A c q u i s i t i o n Number of P a r c e l s Acqu i red 1973 12 1972 10 1971 . 7 1970 2 1969 , 2 1968 0 1967 2 1966 0 1965 0 1964 0 1963 1 1962 1 T o t a l 37 time actually required to bring the development to a point where construction may be started. Developers seem to have collectively evolved a pattern whereby the time elapsed from inception of assembly or acquisition to fi n a l sale, does not exceed four years at the maximum. In fact, i t may be seen that a significant proportion of the parcels were acquired in 1973 for development in 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 in 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 rise in the land values during the past few years. IMo consider-ation was given to the length of holding periods for the individual 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 rise in value would approximate 21% per annum. If, however, i t was found that the average dollar 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 in value, reflected the general increase in housing stock prices throughout the abnormal past two years of supply/demand inbalance in 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 residential 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 results 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 Lack of adjacent services Municipal policy Corporate policy Market not yet ready Other - following normal procedure 1) - development complete in 1974 2) - under development 2) As indicated, developers plumped for municipal policy as the single most important reason. The questionnaire sited 23 out of 35 parcels or approximately 65% as being held up for this reason. The average size of the largest parcel held is interesting in that single holdings of this size are few and far between in the region. This is confirmation of the developers' ability to uncover or assemble larger sites. 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 surrounding Canadian Urban centres. Although the information is out of datq in that the establishment of the agricultural land reserves has further 4 23 3 4 " . . . 7 9 ' 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 in 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 theoretical framework for examining the potential supply of residential dwelling units. A static analysis of two municipalities within the Vancouver region, Surrey and Maple Ridge, confirm the expectations formulated. In these examinations, the time horizon is 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 earlier in the sixties, are running out of land designated and suit-able for development. Table 2k demonstrates that Coquitlam's 40.8% •increase in population from 1961-1966 slowed to 29.7% from 1966-1971. Examination of a map would confirm that Delta's 121.9% increase and Port Coquitlam's 75.9% increase from 1966-1971 couldr.not be duplicated. There is not sufficient vacant designated land. Table 24 ccnfirms that Surrey has 116.5 square miles of territory.or ID.8% of the total of 1,073.9 for the Metropolitan Vancouver, while Maple Ridge has 100.3 square miles or 9.3% of the total. More significant is the fact that Surrey has an established density of 846.4 people per square mile in 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. Static Analysis of the Residential Dwelling Site Potential in Surrey The total land area lying within the boundaries of Surrey is 139 square miles''' or approximately 95,360 acres. • Primary agricultural reserves of approximately 17,141 acres and secondary agricultural reserves of approximately 6,308 acres reduce the urban area by approxi-mately 23,449 acres to a remainder of 71,911 acres. The Greater Vancouver Sewer and Drainage District sanitary sewer trunk enters Surrey at 56th Avenue on the western boundary. One branch continues across Surrey at approximately the 56th Avenue line; one branch curls south to service White Rock; and one branch curves northward to the Newton area. The trunk sewer lines are indicated on Map 1 . This sewer trunk system is capable of providing sewer , service to an estimated 22,717 acres, both inside and outside the presently designated urban growth areas, provided that lateral sewer lines are installed to connect the individual sewerage basins to the trunk sewer system. The provision of lateral sewer lines is a responsibility and power of the Municipality of Surrey. Table 25 sets out the acreage contained in the various sewer drainage basins in the Surrey area...' \:.-Table.24. Area, and Population of Municipalities in Metropolitan Vancouver Census ^ Increase Area sq. miles 1961 1966 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 6.7 -9.0 6.6 3.9 18.7 4.0 Burnaby IMeu Westminster 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 IMorth Vancouver City North Vancouver DM West Vancouver Lions Bay 4.2 62.7 34.4 0.6 23,656 38,971 25,454 • • a 26,851 48,124 31,987 • • • 31,847 57,861 36,440 396 13.5 23.5 25.7 • • • 18.6 20.2 13.9 101.9 88,081 106,962 126,544 21.4 18.3 Coquitlam Part Coquitlam Part Maady Fraser Mills 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 40.8' 37.1 46.6 - 0.6 40.6 29.7 75.9 53.5 - 4.3 41.1 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 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 Other Areas* 34S.2 3,726 2,-529 3,004 -32.1 18.8 Greater Vancouver Regional District Pitt Meadows Maple Ridge 833.1 19.8 100.3 120.1 790,741 2,187 16,748 18,935 892,853 2,247 19,287 21,634 1,028,334 2,771 24,476 27,247 12.9 2.7 15.2 13.7 15.1 23.3 26.9 26.5 Table 24. Area and Papulation of Municipalities in Metropolitan Vancouver (continued) Census Increase Area sq. miles 1961 1966 1971 1961-66 1966-71 (per cent) Langley City Langley DM Other Areas* Metropolitan Vancouver 3.9 116.8 120.7 1,073.9 2,365 14,585 2,800 15,767 16,950 18,567 4,684 21,936 26,620 1,622 137 151 828,248 933,091 1,082,352 18.4 8.1 9.5 12.7 67.3 39.1 43.4 10.2 16.0 Unorganized areas and Indian Reserves Source: Statistics Canada 92-702, 92-708, 98-701. Table 25. Surrey Sewer Drainage Basins - Acreages Contained '84 Area Acreage South Surrey Cloverdale Panorama Ridge Area to North Delta Newton Central valley Surrey Memorial Hospital Fleetwood Pumping Area •y Guildford North Slope (to water's edge) 3193 acres 3378 2200 1145 • 2214 554 603 247 443 8740 . Total acreage 22,717 acres 1. 2. 3. Drainage basin areas were measured by planimeter. No attempt was made to subtract, out already developed acreage. Margin of error is in the, vicinity of 5%. 85 In 1972, the Municipality of Surrey delineated urban grouth areas 1, 2 and 3. Urban grouth area I encompasses an area in Uhalley and Newton to the order of 14,209 acres. Urban growth area 2 sets aside approximately 1,696 acres in Cloverdale. Urban growth area 3 covers approximately 2,492 acres in the Sunnyside area of White Rock. Map 1 depicts the Surrey urban growth areas. The urban growth areas were set aside by the Municipality of Surrey in order to control the staging of Growth and Development. The intent was to concentrate public financial and staff resources to serve a clearly defined area within which the demand for public services is made more predictable than in the areas of unplanned scattered growth. The intended result is greatly simplified 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 sufficient 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 in the area of ex-pansion. The land within the urban growth areas is already partially developed. Only the remaining undeveloped land is suitable for the supply of new residential 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 site based on the assumption that further subdivision could . take place. Only parcels with area in excess of one acre were counted. , . 8 6 Table 26. Remaining Undeveloped Acreage in Residential Zones -Surrey Urban Growth Areas • Area ' " Remaining undeveloped acreage in residential zones Urban growth area 1. 3,308 acres 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 in the vicinity of 5%. 4. Parcels were counted in residential zones only including multi-• family. The overall area of Surrey, therefore, is successively reduced through various constructions: -•-1. The agricultural land freeze; . 2. The designation of urban growth areas; and 3. The extent of existing development in the urban growth areas. Table 27 summarizes the results. The net undeveloped acreage situation in Surrey urban growth areas amounts to approximately k.1% of the total area. 87 Table 27. Met Developable Acreage Compared to Gross Area - Surrey Acreage Percent of t o t a l area T o t a l area 95,360 acres 100 % Total area - l e s s a g r i c u l t u r a l reserves 71,911 75.4 Area included i n seuer drainage basins 22,717 23.8 Area included i n urban grouth areas 1, 2 and 3 18,397 19.2 Net undeveloped acreage i n urban grouth area 1, 2 and 3 • 4,496 4.7 Even though there i s an estimated 4,496 net undeveloped acres u i t h i n the Surrey Urban Grouth Areas, the land ounership patterns are s p l i n t e r e d . There are very feu parcels over tuenty acres i n s i z e . The greatest majority of the par c e l s are tuo acres or l e s s i n s i z e . Table 28 documents the number of separate landholdings by p a r c e l s i z e categories f o r a l l the undeveloped land u i t h i n the urban grouth areas. Assembly of these s p l i n t e r e d landholdings p r i o r to development u i l l be very d i f f i c u l t . No exact f i g u r e s can be given as to exact l y uhat percentages of these parcels can be assembled i n t o developable packages u i t h i n given time horizons. An u n s p e c i f i e d number of land-ouners may refuse to s e l l . Table 28. Parcel Size by Size Category for Remaining Undeveloped Acreage in Residential Zones -Surrey Urban Growth Areas Remaining undeveloped acreage Number of parcels by size category Area in residential zones 0-2 2-5 5-10 10-20- 20+ acres Growth area 1 3,308 acres 346 328 255 13 5 Growth area 2 308 acres 13 38 36 3 Growth area 3 880 acres 32 55 4 3 4 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 in the vicinity of 5%. • ' 4. Parcels were counted in residential zones only including multi-family. Static Analysis of the Residential Duelling Site Potential in  Maple Ridge The total land area lying uithin the boundaries of Maple Ridge is 70,50.0 acres. The Municipality Df Maple Ridge has submitted a plan tD the Land Commission requesting that the land surrounding the toun centre be exempted from the permanent agricultural land designation. The land slated for exemption by the Municipality is that land uhich the Municipality considers as ample for five year of urban grouth uithin.Maple Ridge. The non-agricultural land surrounding the Haney centre totals approximately 4,143 acres. IMon-agricultural land east of 240th Street uas not considered in this total as the possibility of pro-viding f u l l servicing to the eastern sector of Maple Ridge l i e s re-motely in 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 is currently designing a trunk seuer system uhich u i l l provide seuer service to the uestern sector of-'the Municipality - principally Development Area 1. The seuer catchment, basin lie s inside the Agricultural 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 Agricultural Reserve Boundaries (approximately 127th Avenue) on the north as Development Area 1. The area in Development Area 1 totals approximately 302 acres. The Deudney Alouette Regional District report on Planning Goals and Guidelines for Maple Ridge 1972 - 1976, outlines the general objectives uhich the Municipality is trying to achieve in directing development to these areas. Primary among these objectives are: ' -•' 1) To control this staging of development and grouth; 2) To restrict 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 ; uide area; h) To inform the citizen and developer of the Municipality's . timing in the provision of necessary public services; and 5) To set clear policies so that day-to-day planning de-cisions u i l l be more efficient and coordinated. There are approximately 302 net undeveloped acres in Development area 1 of Maple Ridge. There are feu parcels over tuenty acres. The greatest majority of the parcels are tuo acres or less in size. Table 29 documents the number of separate landholdings by parcel size categories for the undeveloped land uithin 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 in 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 residential at a permitted density of approximately four units to the acre. Council may consider cluster housing patterns at a density of 91' Table 29. Parcel Size by Size Category for Remaining Undeveloped Acreage in Residential Zones - Maple Ridge Development Area 1 Area Remaining undeveloped Number of parcels by size acreage in residential category zones 0-2 2-5 5-10 10-20 20+ Development area I 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 is roughly equivalent to single family density of four to the gross acre. There is one family which controls approximately 109 acres at the northern end of Development Area 1. This family wishes to continue farming the land and to pass the land to their family suc-cessors so that they may farm. This block of 109 acres represents approximately 36% of the undeveloped land in Development Area 1. The net effect of this "holdout" is 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 installation 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 built in the seuered area each year. In March of 1974, Maple Ridge Council more than tripled impost fees from $300 a lot to $1,000 a lot in Development Area 1, retro- ; . active to January 6, 1974. The Assistant Municipal Clerk explained that the fees are to cover the cost of installing seuer, uater and other services* Council also set seuer charges in Development Area 1 at $1,250 per lot for those lots fronting the main seuer trunk and $950 per lot for lots not fronting in the trunk line. Lateral mains 2 u i l l have to be put in by the Developer . Fees, therefore, totalled $2,250 or $1,950 per lot, depending upon location. On March.21, 1974, Maple Ridge Council held a public hearing to discuss the rezoning of the 102 properties in Development Area 1 to one family urban residential. Opposition to the rezoning quickly became apparent. Most opponents uanted the area to retain i t s rural residential 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. Opponents uere also concerned uith .higher property taxes. 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 4 to by-laus rezoning the remaining 94 parcels of land. Footnotes Maple Ridge Gazette, May ID, 1973. Vancouver Sun, March 7, 1974. Maple Ridge Gazette, March 27, 1964 Maple Ridge Gazette, April 16, 1974 CHAPTER VIII CONCLUSIONS Several public companies involved in residential development .individually have larger land inventories in other Canadian centres equivalent to the total inventory held by a l l tuelve companies re-sponding to the questionnaire. The major private sector developers in the Vancouver region generally hold land inventories sufficient for immediate development. There uas no evidence of extensive long term land banking. The average parcel size of land holdings uithin 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 municipali-ties concerned did reduce the potential duelling unit supply, but .the "leakages" in terms of permitting development outside the develop ment area offset this limitation in one of the tuo municipalities studied. The d i f f i c u l t i e s encountered in assembling land does reduce considerably the potential supply of residential duelling units. The d i f f i c u l t i e s in assembling land in one municipality constricted the potential supply of duelling units so markedly that the municipal ity uas required to raise i t s per lot imposts to finance the munici-pally installed 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 attritions 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 sufficient land inventories at present to provide the residential housing units expected to be demanded by consumers over the next few years. It is also evident that the developers are able to assemble same land for immediate development, i f sufficient land is 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 policies and regulations in order to bring any residential dwelling units to market at a l l and municipal policies and actions wil l remain instrumental to the supply of housing. Further Observations and Predictions Land development in the Greater Vancouver Area and Lower Fraser Valley differs remarkably from other urban areas in Canada in one significant 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 significantly smaller in 1969 when these comparisons were made. Since that time, the Land Commission Act has further restricted the availability of raw land. Development in the f'orseeable future wi l l be limited to the areas designated by the municipalities as sufficient 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 total area. Table 28 paints aut that the 96'' remaining undeveloped acreage in these Surrey Urban Growth Areas is 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 is 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 is 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 abiliti 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 developed. The relatively smaller parcels remain. Assembly of the smaller parcels is costly and time consuming. High overhead public companies do not have a competitive advantage in assembling such land. In this respect, large public companies are competing directly uith numerous smaller organizations. Cognizant of the di f f i c u l t i e s inherent in assembling land, the relative 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 is 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 is disposing D f smaller holdings while searching elsewhere in Canada and the United States for residential land development opportunities. The majority of the public companies interviewed are, however, simultaneously acquiring larger parcels elsewhere in 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 residential land assembly and land development activities, many companies have shifted emphasis to other types of development activities. Industrial and commercial development are of more interest. In these fields the attention of larger blocks of capital and manage-ment expertise are required even though relative parcel sizes are smaller than residential. One public company has turned to multifamily construction on smaller prezoned blocks of land nearer to the urban core. Reviewing these trends, the prediction is that the cumulative role of the large public companies in residential development in the Vancouver area will decline to an even less significant proportion of the overall activity. Furthermore, one can predict that the increasing costs of land assembly due to the fragmented ownership patterns wi l l lead to cost push inflation for residential housing. Such cost push inflation w i l l be a complete inversion to the demand pull inflation 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 is the same as in the Greater Vancouver Regional District study i.e. vacant land suitable for residential 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 uell as redevelopment of the urban core. The percentage cost increases for these sites, 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 rise but in many in-stances costs u i l l be closer to sales prices than they are today. Profit margins u i l l definitely tend to narrou. In this respect, housing u i l l be like many other commodities uhere scarcities 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 District confirms this observation. The study identifies 57,000 acres of i n f i l l land sufficient for 18 years at existing densities, but points out that 81% of the land in the samples is uneconomic to develop, and 11% is in the process of being developed.1 Soon the presently uneconomical lands must be developed i f population grouth is 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. Higher densities of development are normally acknouledged to be a better use of the scarce resource of urban land. What appears to be a social 99 problem - the cost of housing - may soon initiate a social benefit -the better use of land. The response u i l l evolve in the po l i t i c a l arena. Areas for Further Research The thesis f a i l s to specifically determine the demand for residential units. Price level changes are taken to be indicative of a shortage of supply of residential units relative to demand. Several areas could be researched. 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 inelasticity of demand as income levels rise. 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 socially desirable. Research could be initiated into the approval process specifically associated uith Planned Unit Developments and multi-family projects. Perhaps reasons could- be developed uhich uould make intermediate densities more po 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 initiate changes in housing patterns. It may also be that many developers have suggested intermediate density projects only to find that frustrations, delays and negative attitudes have led them to turn back to traditional single family patterns. It may be that consumer preferences make i t just as profitable for the developer to produce traditional single family subdivision as intermediate density. IDG-It may be that municipal preplanning is 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 residential duelling sites. A l l these pouers reside uith the municipalities. The policies of municipalities reflect the uishes of incumbent residents. Research should be initiated as to the nature and form of an organizational superstructure uhich uould have the pro-vision of housing as its 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 is necessary. 101 Footnotes Greater Vancouver Regional District, " I n f i l l Policy Explor-ation," The Greater Vancouver Regional District, December 1973, p. 3. 102' BIBLIOGRAPHY The Canadian Statistical Review, August 1971 and August 1973, Serial #11-003. Employment Earnings and Hours, August 1971 and August 1973 Serial #72002. Central Mortgage and Housing Corporation Single Family Dwelling Statistics 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 District, " I n f i l l - Policy Exploration", The Greater Vancouver Regional District, December 1973. Greater Vancouver Regional District, "Report of the Residential Living Policy Committee:, The Greater Vancouver Regional District, 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 Elasticities of IMon Farm Housing", The Review of Economics and Statistics 46: 1964-. Richard A. Moore. "Development Potential Model for the Vancouver Metropolitan Area", Unpublished Master's of Business Administration thesis, the University of British Columbia, Vancouver, 1972. E. Oksanen, "Housing Demand in Canada, 1947-1962: Some Preliminary Experimentation", Canadian Journal of Economics and Po l i t i c a l Science., 32, 1966. Edmund V. Price. "The House Building Industry in Vancouver". Unpublished Master's of Business Administration thesis, the University of British Columbia, Vancouver, 1970. P. A. Samuelson, Economics: An Introductory Analysis. Toronto: McGraw-Hill Company of Canada Ltd., 1966. Ami 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 Statistics 50: 196S. The Greater Vancouver Regional District, Population Forecast, Vancouver Vancouver GVRD Planning Department 1973. 1U3 A P P E N D I X 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? MASTER SHEET 107 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 . LANGLEY BURNABY RICHMOND DELTA SURREY MATSQUI MAPLE RIDGE/ PITT MEADOWS COQUITLAM/ PORT COQUITLAM NORTH VANCOUVER/ WEST VANCOUVER PORT MOODY MISSION OTHER/ SPECIFY " ~ S | p E I ^ E ™ g 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 DEVELOP-MENT 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 MUNICIPAL POLICY LACK OF ADJACENT SERVICES 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 IS. ACREAGE 5. C) SUBDIVISION SERVICING AND/OR. RESIDENTIAL UNIT CONSTRUCTION . TO BEGIN LATER THAN ONE YEAR FROM SEPTEMBER 30/73 BUT BEFORE TWO YEARS (1-2 YRS) D) LATER THAN TWO YEARS BUT BEFORE FIVE YEARS (2-5' YRS) E) LATER THAN FIVE YEARS (MORE THAN 5 YRS) T 4 . NUMBER OF RESIDENTIAL UNITS TO BE PROVIDED (CHECK ONLY ONE) LACK OF ADJACENT SERVICES MUNICIPAL POLICY CORPORATE POLICY MARKET NOT YET READY FOR THIS TYPE OF RESIDENTIAL UNIT IN THIS AREA LACK OF ADJACENT SERVICES MUNICIPAL POLICY CORPORATE POLICY MARKET NOT YET READY FOR THIS TYPE OF RESIDENTIAL UNIT IN THIS AREA 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) TRUNK SEWER . . - . ' II) 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) 112-District 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 facilities 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 facilities in areas where tdevelopment and .growth is wanted. The delineation of Urban Growth Areas is also intended to serve as a means of informing the citizen and developer of the Municipality's timing in 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 con-centration 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 is greatly simplified and . more economical co-ordination and provision of public services such as ut 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 utilities and services...plans...l.n_._c.onm . .(b) Confine a l l sanitary sewer_ex_t^ (c) Establish a priority for local improvement spending in the Urban Growth ' Areas; (d) Prepare a capital budget geared towards obtaining public land requirements ' and constructing public facilities 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, (i) Sufficient inf i l l i n g has taken place in existing Urban Growth Areas; ; v (ii) Control plans and utility 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. It is intended, therefore, that the Municipality's policy will 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 faci l i t i e s , 'sjii.' tho i;l;n new . i i . 15! most "ePfective~use i s made of our existing services . and f a c i l i t i e s ^ s o that new services and facilities 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 ; l " = REVISED MAR. 1974 , G.P Fraser River 112 AVE./ 104 AVE.;^ 96 AVE O ) c a in C .0 SURREY SCALE: 1"=3000' DEVELOPMENT AREA BOUNDARIES AGRICULTURAL LAND RESERVE BOUNDARIES 'G.V.S. AND D.D. TRUN& SEWER DEVELOPED AREAS , 0 AVE. SEWERAGE AREA BOUNDARY \ 

Cite

Citation Scheme:

        

Citations by CSL (citeproc-js)

Usage Statistics

Share

Embed

Customize your widget with the following options, then copy and paste the code below into the HTML of your page to embed this item in your website.
                        
                            <div id="ubcOpenCollectionsWidgetDisplay">
                            <script id="ubcOpenCollectionsWidget"
                            src="{[{embed.src}]}"
                            data-item="{[{embed.item}]}"
                            data-collection="{[{embed.collection}]}"
                            data-metadata="{[{embed.showMetadata}]}"
                            data-width="{[{embed.width}]}"
                            async >
                            </script>
                            </div>
                        
                    
IIIF logo Our image viewer uses the IIIF 2.0 standard. To load this item in other compatible viewers, use this url:
http://iiif.library.ubc.ca/presentation/dsp.831.1-0099888/manifest

Comment

Related Items