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Land use, price changes and speculation on the urban fringe : an intertemporal case study in the Kamloops area, B.C.

University of British Columbia

The established trend of increasing raw land values, combined with a forecast of this pattern to continue, is both reinforcing and perpetuating general opinions with respect to the causes of the unit price increase of raw land. Specifically, the stigma attached to the term "land speculation" is rapidly increasing. The existence of these circumstances makes it imperative to identify the motives initiating 'speculative activity' involving undeveloped land in order to either substantiate the basis for the growing criticism of so-called "speculators" or disprove, with empirical evidence, the concepts on which the misconceptions of speculation and the resulting criticism are founded. Consequently, following a general discussion of existing attitudes toward land in North America and the presumed effects of land speculation, this study attempts to establish empirically to what extent speculation in undeveloped land exists in the City of Kamloops, its causes and actual effects on the unit price of raw land. The study incorporates in its framework an extensive review of existing related literature under the general heading of "Land Speculation - A General Discussion". The purpose of this section of the study (Chapter II) is to identify and summarize varied observations documented by several authors who have both supported and rejected basic misconceptions with respect to land speculators. In addition, Chapter II provides a useful basis for comparing the personal observations of reviewed authors with the subsequent actual results of the analysis. The primary objective of the study is to measure the changes in raw land values from 1949-1970 in the City of Kamloops, and to rationalize these changes in terms of market behaviour. The approach used in an effort to achieve this objective is a time series analysis to isolate the causes contributing to changes in raw land values and as a result recreate the market behaviour of raw land sales in the intertemporary period. The subject of the analysis and primary source of data, is the City of Kamloops, exclusive of the unincorporated districts contiguous to the City's boundaries. Due to the economic substitutability of land use, it would have been more desirable to include the contiguous unincorporated areas; however, this was impossible as the required data was unavailable. The sales data is derived from a sample of 620 properties representing ten percent of the total population of legally defined parcels. The sample was obtained by extending two rays to the City's perimeter from a predetermined origin. The origin was chosen after completing an analysis of demographic and land use data in order to establish the most appropriate areas for the study. A third line was extended across the area which presently reflects the greatest concentration of new residential growth. The information requirements for each sample parcel, acquired from Land Registry Titles and Assessment Cards, were designed to reflect the type and number of bona fide transactions, price trends, land turnover rates, holding time, and pattern of development in each sample area from 1949-1970. It is important to note that the data input derived for Sample X (North Kamloops) is representative of an area which developed almost completely in the absence of subdivision controls while, in comparison, the data collected for Sample W (Sa-Hali) conversely represents an area which is presently developing under rigid municipal control. The importance of this factor is reemphasized in the analysis of the data and ensuing conclusions. It should also be noted in this connection that when the sample areas were chosen the researchers were unaware of the areas where development controls have been legislated and this factor did not prejudice the extensive data collection process. The significant areas of investigation directly relate to a widely quoted definition of the concept of speculation stating that land speculation is "the holding of land out of use pending its sale at a higher price". Comprehensive data indicates generally for the City of Kamloops whether land is being held off the market and if so by whom and for what holding periods. It also establishes a pattern of growth, price trends for residential lots, and relates to what degree accessibility dictates a pattern of growth. The analysis strongly supports a general conclusion that, in the historical growth of Kamloops excessive speculation in undeveloped land, either as previously defined or conversely represented by a premature conversion to a higher use, has occurred predominantly in the absence of legislated subdivision controls resulting in inferior subdivisions and urban sprawl. That is, speculation in itself has only been detrimental to the raw land market in Kamloops in the absence of legislative controls available to the Civic government as empowered by the Municipal Act of British Columbia.

Text

2012-04-04

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http://hdl.handle.net/2429/41923

Business Administration - Urban Land Economics

University of British Columbia

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