@prefix vivo: . @prefix edm: . @prefix ns0: . @prefix dcterms: . @prefix skos: . vivo:departmentOrSchool "Business, Sauder School of"@en, "Real Estate Division"@en ; edm:dataProvider "DSpace"@en ; ns0:degreeCampus "UBCV"@en ; dcterms:creator "Richmond, Bruce Leslie"@en ; dcterms:issued "2012-04-04T19:48:47Z"@en, "1971"@en ; vivo:relatedDegree "Master of Business Administration - MBA"@en ; ns0:degreeGrantor "University of British Columbia"@en ; dcterms:description """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."""@en ; edm:aggregatedCHO "https://circle.library.ubc.ca/rest/handle/2429/41923?expand=metadata"@en ; skos:note "LAND USE, PRICE CHANGES AND SPECULATION ON THE URBAN FRINGE: AN INTER-TEMPORAL CASE STUDY IN THE KAMLOOPS AREA, B.C. by Bruce Leslie Richmond Comm., The University of British Columbia, 1970 A THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION in the Division of URBAN LAND ECONOMICS Faculty of COMMERCE AND BUSINESS ADMINISTRATION We accept this thesis as conforming to the required standard: THE UNIVERSITY OF BRITISH COLUMBIA December, 1971 In presenting this thesis in partial fulfilment of the requirements for an advanced degree at the University of British Columbia, I agree that the Library shall make it freely available for reference and study. I further agree that permission for extensive copying of this thesis for scholarly purposes may be granted by the Head of my Department or by his representatives. It is understood that copying or publication of this thesis for financial gain shall not be allowed without my written permission. Department of fy The University of British Columbia Vancouver 8, Canada Date Wdr&h /, /?72. LAND USE, PRICE CHANGES AND SPECULATION ON THE URBAN FRINGE: AN INTER-TEMPORAL CASE STUDY IN THE KAMLOOPS AREA, B.C. ABSTRACT Bruce Leslie Richmond The established trend of increasing raw land values, combined with a forecast of this pattern to continue, is both reinforcing and perpet.uating 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 miscon-ceptions 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 iv 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 unincorpora-ted dis tricts 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 V 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 pre-determined 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 ¥ (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 specu-lation 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 sub-divisions and urban sprawl. That is, speculation in it-self 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. vii PREFACE This study is part of a large research project undertaken for the Union of British Columbia Municipal-ities (UBCM). Originally intended to investigate the the effects of land speculation on the community, the en-tire project was financed through a grant from the Federal Government's agency Central Mortgage and Housing Corpor- • ation (CMHC). The following motion endorsed by the UBCM indicates the scope of their interest in this area: \"WHEREAS much of the value in land which accrues from the prospect of development should rightfully be the property of the community, not of private indiv-iduals; AND WHEREAS the enhanced value of urban and suburban land is due in no small measure to municipal planning, works and services; AND WHEREAS the high cost of land is one of the basic causes of the current housing shortage: THEREFORE BE IT RESOLVED that the UBCM executive be requested to set up a committee to consider means of curbing and offsetting the adverse effects on the community of land specualtion.\" Three urban areas in the Province were selected for the project: Greater Victoria (Saanich), Greater Kamloops viii and Greater Vancouver (Richmond, Surrey, Port Coquitlam and Delta). Data for this study of the Kamloops area was collected in the Spring of 1971 as was that for the Victoria area, (see the forthcoming MBA Thesis on land speculation in the Victoria area, by George M. Kropinski; some of the theoretical portions of both studies are identical). \"ACKNOWLEDGEMENT This study did not merely commence of its own accord. \"The author would like to especially acknowledge the guidance of Professor Stanley W. Hamilton, who provided his assistance and experience in initiating the study, in organizing the processes concerned with the data collection, and in guiding the analysis and interpretation of the data. The data has been collected in confidence and with gratitude to the Assessor of the City of Kamloops, Mr. William Headon. I am also indebted to Sebius Doedel, who created the computer program, and to fellow students, notably Mr. George Kropinski and Miss Gaye Cummings, for their assistance in collecting and compiling the data. V -TABLE OF CONTENTS Page ABSTRACT iii PREFACE . . . . . . . . . . vii ACKNOWLEDGEMENT ix LIST OF TABLES xii LIST OF FIGURES. xix Chapter I INTRODUCTION 1 Significance of the Study 1 Purpose of the Study . 3 Chapter Organization ^ 5 References 10 II LAND SPECULATION: A GENERAL DISCUSSION 11 Introduction 11 Speculation in General Commodity Markets. . . 13 North American Attitudes Towards Land . . . . 16 Land Speculation: The Presumed Effects. . . . 18 The Market for Undeveloped Urban Fringe Land. 28 Land Speculation Reconsidered 34 References 40 III SCOPE AND METHODOLOGY OF THE STUDY 44 r Objectives of the Study 44 Data Sources and Methodology 48 Compilation of the Data Sheet 51 Sampling Procedure 58 References 61 xi Chapter Page IV DEFINITION AND HISTORICAL GROWTH PATTERN OF THE STUDY AREA 64 The City of Kamloops - Historical Growth . 64 Study Area - Sa-h'li (Ray W) . . . . . . . 68 North Kamloops - A General History . . . . 71 Study Area - North Kamloops (Ray X § Ray Y) 7 7 The Unorganized Communities 83 References . . . . . 94 V ANALYSIS OF DATA. 95 Property Type I - Acreage 98 Property Type II - Subdivided Lots . . . . 106 Ray X - Riverdell Subdivision . . . . Ill Brentwood Subdivision . . . 113 Windsor Park Subdivision. . . 117 Westmount Subdivision . . . . 120 Ray W - Sa-hali 123 VI LAND USE CONTROL 127 Introduction 127 The Public Interest in Land Resources. . . 128 North American System of Land Tenure . . . 131 The Case for Public Intervention 134 Methods of Controlling Land Use 144 References 164 VII CONCLUSIONS 171 BIBLIOGRAPHY APPENDIX \"A\" Data Collection Coding Sheet APPENDIX \"B\" The Development Pattern of Sa-hali (Ray W) xii LIST OF TABLES Table - Page i IV-1 Population Growth - Town of North Kamloops . 74 | IV-2 Comparative Construction Breakdown -I North Kamloops 76 | IV-3 Age Distribution of Buildings -1 Powers Edmonds Addition 84 IV-4 Age Distribution of Buildings -i Mission Flats 86 ; IV-5 Land Use Distribution - Brocklehurst . . . . 87 I IV-6 Age Distribution of Buildings - Brocklehurst 88 • IV-7 Land Use Distribution - Westsyde 90 ; IV-8 Age Distribution of Buildings - Westsyde . . 91 ; IV-9 Land Use Distribution - Valleyview 92 i IV-10 Age Distribution of Buildings - Valleyview . 93 < V-l Location and Size of Acreage Properties in Study Areas 102 I V-2 Average Sales Price per Unit of Acreage j Properties 106 V-3 Average Turnover Rates for Unimproved Lots . 107 i ! V-4 Total Number of Sales by Year of Sale -| Ray X and Ray W 109 | V-5 Turnover of Unimproved Lots by Year i (1962-1970) 109 i ' V-6 Summary of Unimproved Lots by Subdivision and Percent Sampled Ill 'f V-7 Riverdell - Year of Development of Unimproved Lots and Proportion of Lots | Developed (cumulative) by Year 112 ) xiii Table Page V-8 Riverdell - Price per Unit for Unimproved Lots 113 V-9 Brentwood - Year of Development of Unimproved Lots and Proportion of Lots Developed (cumulative) by Year 114 V-10 Brentwood - Price per Unit for Unimproved Lots (1965-1967) 116 V-ll Windsor Park - Year of Development of Unimproved Lots and Proportion of Lots Developed (cumulative) by Year. 118 V-12 Windsor Park - Price per Unit for Unimproved Lots (1967-1970) 119 V-13 Westmount - Year of Development of Unimproved Lots and Proportion of Lots Developed (cumulative) by Year 120 V-14 Westmount - Price per Unit for Unimproved Lots (1966-1970) 121 V-15 Sa-hali - Year of Development of Unimproved Lots and Proportion of Lots Developed (cumulative) by Year 126 xiv LIST OF FIGURES Figure • Page II-I Life Cycle of Land Values. . . . . . . 29 II-II Stages of Land Values 31 IV-I Location Map - Kamloops, British Columbia 63 IV-II Growth of the City of Kamloops by Concentric Rings 67 IV-III Location Map - Sa-hali 69 IV-IV Census. Tracts - Sa-hali 70 IV-V . North Kamloops - Land Ownership by the B.C. Fruit Land Company 72 IV-VI Age Distribution of Buildings in North Kamloops\" 78 IV-VII Residential Subdivision by Year in Study Area (Ray X § Ray Y) . . . . . . . 79 IV-VIII Installation of Sewage System by Year in Study Area (Ray X § Ray Y) 80 IV-IX Main Transportation Arteries -North Kamloops 81 IV-X Census Tracts - North Kamloops . . . . 82 IV-XI Existing Location of Trailer Parks in the Kamloops Area 89 V-I Location of Property Type I - Acreage. 103 1. CHAPTER I INTRODUCTION Significance of the Study Coinciding with the continuing expansion of the terri-torial limits of urban areas is the availability of an increasing volume of literature written by both economists and laymen, attempting to explain the varied catalysts of 'urban sprawl' and the substantial unit price increase in land values. To date, a great deal of the present reason-ing related to changing land values is based on- conjecture and simple economic assumptions, and only a minimal amount of investigation, in the form of empirical research, has been performed to either substantiate or disprove widely stated opinions. Although the validity of several accept-ed assumptions is continually' argued among land economists it could be concluded, after a review of the related articles and a consensus of public opinion, that there is growing assent to the fact that so-called 'land speculation' is largely responsible for the 'excessive' increases in the value of undeveloped land. As a result, land speculators 1 i 2. are becoming increasingly labeled as 'undesirables' in the land market and blamed for distorting the price, of undevelop-ed land and for causing the premature conversion of agri-cultural land to residential use on the urban fringe. It is unquestionable that the relative costs of undeveloped land have increased but in the absence of reliable data one should not be too quick to single out 'speculation' as a major cause of price increases without first examining the forces which motivate speculators in the raw land market. As stated in Chapter II, Barlowe gives a general definition of \"land speculation\" as \"any holding of landed property with the hope that it can be later sold at a profit\"?' Generally, economists agree that speculation in commodities where the supply can be increased in relation to the demand is beneficial in the long run, creating both price equilibrium and a better allocation of resources. However, with respect to land, where the physical supply is fixed, competition among-s,e Hers is viewed as detri-mental in comparison to other commodity markets. Some authors support this argument by stating the demand for land is always ahead of the supply; however, this is a very questionable conclusion and one whose assumptions require a detailed analysis. Although the physical supply of land is fixed, one must consider its economic supply and the alternate use of individual sites. Each competitor for a. vacant site has a different set of future expectations and demands for compensation in buy-ing and selling land as a commodity. Related to these 3. expectations is a need to examine existing subdivision and land use controls which provide the limits in which these expectations and compensations can be satisfied. That is, if excessive speculation occurs possibly it is because there is complete independence of decision among competitors in dictating a site's future use which is exercised in the absence of legislated controls. In the case where controls do exist, the intent of these regu-lations must be examined to establish whether they are actually controlling growth or motivating urban sprawl. In summary, the study will question the widely accepted premise that \"speculation leads to a waste of a valuable resource...\"1 by examining the variables which contribute to and motivate the often criticized activities of 'land speculators'. Purp ose of the Study The purpose of this study is to determine by empirical research the effects of predefined speculative activity in the land market by isolating the causes contributing to changes in raw land values. This will require re-creating the market behaviour of undeveloped land sales in a time series analysis in an urban area realizing that historically each city is phycically shaped by different processes. This primary objective will involve an exten-sive data collection process in order to construct a 4. reliable sample from which conclusions can be stated. As outlined in the review of the literature in Chapter II, there exists diverse opinions with respect to the na.ture and effects of land speculation and the study will attempt to verify or disprove, by analysis-of the sample, the baris of these assumptions and opinions. It is possible that many presently accepted assumptions with respect to land speculation spring from basic misconceptions about land as a commodity and specifically the nature and function of land speculation. In an attempt to contribute to a know-ledge of the operation of the raw land market, the study collectively will combine a review of present thought on land speculation, as documented in available literature, with an analysis of undeveloped land sales in an urban area and suggested methods for controlling land use. It is not the purpose of the study to solely outline the growth pattern of one urban area, namely Kamloops, British Columbia, but rather to use the historical evi-dence acquired from data relating to Kamloops to provide a basis from which to formulate general objective con-clusions as to the effects of land speculation on un-developed land sales in urban areas. 5. Chapter Organization Following the definition of 'land speculation1, Chapter II extensively reviews much of the available literature relating to the topi-\", of \"Land Speculation\" under five general subheadings: 1. Speculation in general commodity markets; 2. North American attitudes toward land; 3. Land speculation - the presumed effects; 4. The market for undeveloped urban fringe land; and 5. Land speculation reconsidered. First, a reasonable case is put forward to support a general acceptance by economists of speculation in other commodity markets and reasons for their exclusion of land due to its limited physical supply. In contrast, it is then shown that North Americans still basically adopt the attitude that land is limitless combined with a general unconcern for the rate at which land is consumed. Thirdly, the varied presumed effects of land speculation are present-ed as summarized from the writings of several authors con-sidered to be prominent in this field. Fourthly, the discussion of Chapter II explains the context of the development stage in fringe areas in relation to the five stages in the land cycle. Finally, three basic miscon-ceptions, as related to land speculation, are outlined in detail providing a useful background against which to undertake the subsequent analysis. 6. The next chapter outlines the objectives of the study and the method of data collection used in the time series analysis. The chapter also contains a brief history and description of the Land Registry System (Torrens System) and explains the importance of its' operation as well as the importance of access to property assessment cards in facilitating the collection of the required information. The data collection process required completing a separate information sheet for each sample parcel and the chapter examines the selected variables used and reasons for their inclusion in attempting to satisfy the primary objectives of the study. Finally, the sampling procedure is outlined explaining what was considered as the most effective way to delimit the sample of approximately ten percent of the total population of legally defined properties. Chapter IV outlines the historical growth pattern of the study area and surrounding Metropolitan Region under three separate subheadings. This division is advantageous due to the fact that prior to January 1, 1968 the City of Kamloops did not include the Town of North Kamloops and also the study area excludes land sales of properties in the contiguous unincorporated districts surrounding the present City limits. As a, result, the discussion initially examines the City's growth prior to amalgamation and includes a brief description of Sa-hali (Ray W), situated in the southwestern sector of the City\". The second sub-section describes the growth of North Kamloops, which 7. essentially represents the area traversed by Ray X and Ray Y, and outlines population growth, construction activity since 1951 and the effects of a change in the transporta-tion pattern. Thirdly, an extensive discussion, based on research completed by the Thompson Valley Regional Planning Board, outlines the recent growth of the unincorporated districts adjacent to the present boundaries of the City of Kamloops. It is important to understand the relationship of these districts to the study area as they represent an alternate residential site to properties situated in the sample area. This fact is evidenced by the \"pocket\" sprawl which is occurring in some of these areas at the present time. It was originally intended to include properties in these contiguous districts in- the sample; however, it was impossible to acquire the necessary information from avail-able records. Chapter V, the analysis chapter, begins with an ex-planation of the rationale used to segregate the voluminous data into categories in order to be able to compare and evaluate the sales characteristics of undeveloped properties. The analysis itself briefly considers the sales character-istics of the minimal number of acreage properties (Property Type I) in the sample for which adequate informa-tion was obtained. It was fully realized, before commencing this initial part of the analysis, that insufficient informa-tion had been acquired from which to formulate conclusions for acreage sales. However, it is hoped that a concise 8. analysis of the available acreage parcels will illustrate the basis on which conclusions could be formulated, given an - acceptable sample. The analysis chapter, therefore, emphasizes the characteristics of the sales of individual lots (Property Type II) in Sa-hili- and Kamloops North. The two samples are discussed both individually and collectively and the observations form the basis for the ensuing conclusions. However, prior to stating the conclusions, Chapter VI summarizes, by basically reviewing available literature, the concepts of land use control under the following headings: 1. The public interest -in land resources; 2. North American system of land tenure; 3. The case for public intervention; and 4. Methods of controlling land-use. The primary objective of the chapter is to illustrate a range of controls allowing for various degrees of public intervention and designed to improve, not replace, the private sector. This is accomplished by describing the options available for land use control which range from \"laissez-faire\" at one extreme, to the public ownership of land at the other extreme. Finally, the conclusions to the study are presented in Chapter VII, based on the preceding analysis of the 9. data, and subsequent proposals are suggested to control the supply of new residential lots on the urban fringe. In addition, the final chapter includes several comments relating to the general discussion developed in Chapter II and Chapter VI. These comments both support and criticize the basis of existing accepted concepts which reflect the presumed effects of 'land speculation'. 10. REFERENCE 1. Raleigh Barlowe, Land Resource Economics, Prentice-Hall, Inc., Englewood Cliffs, N.J., 1958, page 227. CHAPTER II LAND SPECULATION: A GENERAL DISCUSSION Introduction As the population of urban areas increases and subse-quently the demand for land for urban uses rises, cities tend to spread outward, encroaching upon land in the suburban zone. The movement is a continued process which converts land previously used for agricultural purposes into urban use With this in mind, the value of any unit of vacant fringe land may be considered as being in two parts - the value in its existing use, and its potential development value. Deve-lopment value is the difference between the value of land in its existing use and the value in its highest and best use. The major portion of urban land has no development value be-cause the existing use of most urban land is also its highest and best use. In the case of vacant land on the urban fringe where the highest and best use is some type of urban develop-ment, the development value may be substantial. By taking ad-vantage of the forces working towards increasing urbanization the land speculator, or investor, attempts to make a profit fr om rising development values. Land speculation may be defined as the holding' of land resources in their present uses - and often in lower uses than those justified by the prevailing market conditions -while awaiting an expected increase in property sale values. The usual method of operation is to acquire blocks of land well in advance of urban growth and to hold them off the mar ket until such time as they are ready for urban uses. As Barlowe notes, the term \"land speculation\" is also used in other contexts: It is sometimes applied to any holding of landed property with the hope that it can later be sold at a profit. Practically all property owners qualify as speculators under this definition. At times, it is also used to describe the activities of builders and land developers who develop farms, subdivisions, houses, shopping centers, and other properties on their own with the intent of selling them at a profit after the development process is completed. These operators have some characteristics in common with the tradi-tional speculator; but they are often in-terested mostly in the use of their develop-ment programs as a means of marketing their labor and managerial abilities.3 This chapter examines the concept of land speculation within the following framework: 1. Speculation in general commodity markets; 2. North American attitudes toward land; 3. Land speculation - the presumed effects; 4. The market for undeveloped urban fringe land; and, 5. Land speculation reconsidered. 13. Speculation in General Commodity Markets Speculation is a continuing process that will occur in almost any market which is subject to uncertainty or imper-fections. Most economists consider that speculation serves a useful purpose in that it can lead to a better allocation of resources over time. This is generally true for speculation in commodities such as wheat, minerals, lumber, and specula-tion in these markets is rarely criticized by the general public. According to Samuelson and Scott, \"The intelligent profit-seeking action of speculators and arbitragers tends to create certain definite equilibrium patterns of price over time and space\".4 When a commodity has different prices at different times (or at the same time in different areas), the opportunity for profit exists providing that the costs of holding it over time for later sale (or of transferring it for immediate sale) can be estimated with reasonable accuracy, and providing that the costs are not so high as to discourage an individual from committing current funds to its purchase.5 In commodity markets, speculators operate by taking ad-vantage of spatial and temporal price differences existing between markets for given commodities, by buying at the lesser prices and selling at the higher prices, thereby making a profit for themselves -- and, at the same time, tending to equalize the prevailing prices. As a rule, specu-lators do not buy commodities with the intent of using them • in the usual sense; rather, they are motivated by the 14. expectation of existing price differentials or future price increases.6 To the extent that speculators can accurately forecast the future scarcity of a commodity, their action can result in stabilization of foreseeable price fluctuations over a given time period. By buying commodities in one period for release in a future period, speculators cause (1) a with-drawal of present supply, (2) a temporary increase in present price, (3) an increase in amount stored, (4) an increase in future supply, and, (5) a reduction in future price - the end result being a relative stabilization of price and consump-7 tion over time. Thus, in the commodity market at least, speculators perform a socially beneficial function. The actions of a single speculator on a particular com-modity will not significantly affect the market price, unless the market happens to be severely restricted. If this indeed is the case, and the market price is definitely influenced by the decision of one speculator to buy or sell, \"... the question of monopoly control becomes more important than that Q of speculation\". On the other hand, whenever there are a large number of speculators in a given market, competition among them will effectively reduce individual gains, and per-mit none to make excessive profits over the costs he incurs -which include, of course, the wages necessary to keep him in this line of activity. Thus, although \"there is something vaguely unpleasant 9 about the image of the speculator\", economists have long recognized the important role speculation•has in an efficient price system. However, as MacKay concludes, the life of a speculator is not an easy one: Not only does his expectation of profit depend almost entirely on the actions of others, but if he appears to be doing well he will face competi-tion from other speculators who wish to get in on a good thing. There is no certainty that a speculator will make any profit, much less a large one, and the chance he may lose money is always present.10 It is worth noting here that, as the term itself implies, excessive speculation is often detrimental to the public in-terest by causing distortions and inefficiencies in the price mechanism. However, excessive speculation in commodity mar-kets can always be curbed - various means are available to effect this, but the fundamental method of forcing prices down is to simply increase supply in relation to demand. The underlying question of speculation in land can be more fully understood by examining both the causes of land speculation and the problems which arise from it. Before at-tempting this, however, it is appropriate to examine the general attitude toward land as a resource in North America. 16. North American Attitudes Toward Land The prevalent attitude in North America toward land has been tempered by the belief that land as a resource is virtually limitless. This notion, bred during the early settlement days, has been a dominant factor in the development of both Canada and the United States. In 1796, Albert Gallatin, an American diplomat and one-time Secretary of the Treasury, remarked that, \"If the cause of the happiness of this country was examined into, it would be found to arise as much from the great plenty of land in proportion to the inhabitants ... as from the wisdom of their li political institutions\". Related to this collective confidence that the supply of land is somehow unlimited, is the general unconcern for the rate at which land is consumed by new development - an 12 attitude that has been termed \"prairie psychology\". On top of this, has been the seeming indifference - until compara-tively recently - toward the general standard of land develop-ment. As Yearwood observes, the dominant American attitude concerning land use is one of \"...little concern for the rate at which land is used and a belief that all development is necessarily and inherently good, probably because someone is 13 making money out of it\". A British observer once remarked that, \"One of the most marked characteristics of American 14 development is its impermanence\", and that, despite the 17. rampant growth, \"... it is very rare in America to encounter any antipathy to new development. Quite the opposite is usually the case\".15 This attitude seems to be quite justi-fied, because, to most North Americans, unfortunately, \"... development is progress, even if the development is substan-dard, premature, improperly located, and a drain on the public „ 16 purse\". Closely associated with the attitudes toward \"limitless\" land resources and incessant development, is the accepted practice of land speculation. According to Delafous, \"Specu-lation in land has been a tradition in America and was in fact a major motivating force in opening up the West .... This speculative bent still colors American attitudes toward the land and is a factor to be reckoned with in attempting 17 . . . . to control its use\". Promotional literature, inviting in-vestments in land, is widespread. Several years ago the book entitled, How I Turned a Thousand Dollars Into a Million in Real Estate - in My Spare Time, topped the best seller list for more than eight months. Recently, a major article in Maclean's urged Canadians to take advantage of the specula-1 8 tive element in land. The article never- once mentioning the effects of land speculation on the general public enticed readers with the tempting headline, \"This small-town barber isn't any smarter than you are. BUT he's a part-time land speculator, and soon he'll be worth $400,000. You could do it too\". The story praised speculators as the \"...new kind of Canadian mini-tycoon, men of limited incomes who are living 18. 19 quite literally off the fat of the land\". The foregoing section has briefly summarized what has been the traditional attitude to developing land in North America - the recognized accepted and acclaimed procedure of \"get in, get rich, get out\", and the frontier, trailblazing mentality, characterized by a striking indifference as to the socio-economic consequences. It will be the purpose of a later chapter to outline reasons why this attitude must change, if, as Yearwood states, the general public is to. realize \"...whose ox is being gored when speculators reap a windfall. And an ox is_ being gored; as .the various systematic works on speculation document, the total community - and the 20 taxpayer - is the loser\". Land Speculation - the Presumed Effects The earlier discussion on speculation in general commo-dity markets pointed out the value to the economy of specula-tion in those particular markets. What was then stated is generally applicable to any product or resource characterized by having a particularly fluctuating supply. Speculative activity in land resources, however, is a controversial sub-ject to say the least. 19. Although competition exists between sellers in the land market, in the opinion of many, the results of such competition are not as beneficial as those results that normally accrue from competition in many fields of•production. Bryant, for example, states that the overall effect of competition in the land market is \"...simply an undesirable distortion of the trend of urban growth\".21 As a city grows \"...the directions of its growth are pretty well determined by physical factors, natural or man-made, so that demand is constantly ahead of supply ... normal market adjustments simply do not operate 22 in these circumstances\". Although tradition and free enterprise have long decreed that \"... land uses are most efficiently organised if deci-2 3 sions are made by the market — \" , there are many who would disagree. The\"market\" ... is not some abstract entity. It is made up of people, some of them unsuspecting, uninformed pur-chasers, some of them ethical men in the development business, some of them speculators, and some of them, apparently, just crooks. Still, until very recent times, land-use decisions were made by private individuals - the realtors, land developers, and the bankers, all of whom were interested in personal profit.24 In the same vein, The Economist notes that: No other market is so distorted, so imperfect, so jerky in its action and 20. hemmed in by the effects - intended and unintended - of public regulations. The jerkiness is virtually inevitable. Buildings are long-lived; changes of ownership, whether of freehold or lease, occur at long intervals and sporadically; land effectively on the market at any particular moment is only a scattered fraction of the total.25 Consequently, in the words of Fogarty. \"...myth and fact become inextricably mixed, and the result, it has been said cynically, is that real estate is perhaps the only market where the successful guesser can rely on one constant - the ? f\\ ignorance of the rest of the world\". The characteristic fragmentation of land ownership has been accused of preventing the most efficient use of urban 27 land. Here the argument is that inefficiencies in land-use may result from instances where the theoretically highest and best use of a particular area would necessitate the combination of sites previously used separately, but one or more land-owners refuse to allow his land to be used for such a purpose. This refusal may be attributable to a variety of reasons, the most likely being the desire to take advantage of the so-called \"monopolistic position\". According to Lean, \"There is always a potential monopolistic element in the ownership of land in so far as every plot is unique in its spatial rela-tionships with other plots of land\".28 J n u r b a n a r e a s particu-larly there may be several mutually exclusive demands for the use of a piece of land, and city growth only serves to 21. multiply demands for any given site whether it be oil the fringe area or near the central business district. At the outset it was stated that very little empirical research has been undertaken to investigate the profits de-rived from land speculation, the effects of speculation on general price levels and the process of changing property values over time. However, several authors have seen fit to make at least tentative observations on the general effects of land speculation. Frenzied competition for land, particularly on the urban fringe, has resulted in \"...unbridled land subdivision as a get-rich-quick scheme ... (leaving) ugly scars on nearly every major city and many of the smaller cities in the United 7 q . . . States\". Speculative activity is prevalent m fringe areas because, as Whyte states, \"...just beyond today's suburbia there is little planning, and the development is being left 3 0 almost entirely in the hands of the speculative builder\". The speculator and/or developer is naturally attracted as much by the availability of relatively inexpensive land, as by the presence of minimal regulations. He \"...follows the line of least resistance, and in his wake is left a hit-or-31 miss pattern of development.\" Although there is always a great \"deal of publicity about speculators who have made quick fortunes, \"less is said con-32 cerning the blighted hopes or investments lost\". Even less, 22. as Yearwood observes, is heard concerning the effects of speculation on the public in general: \"The community loses through loss of revenue when land is taken from a productive use to be offered for speculative purposes, when scattered subdivisions without the necessary services and facilities must be served, and when foreclosures and defaults become 33 numerous, and when taxes are increased\". By its very nature and method of occurrence speculation in land has been accused of nullifying the planning function of communities. Fagin states that because co-ordination of planning involves both space and time, the effective planning necessary to encourage orderly patterns of development re-34 quires simultaneous attention to both. Unfortunately, however, speculation adversely affects both the sequence and the tempo, or rate, of municipal development. The overall effects can best be illustrated if, for purposes of prelimi-nary investigation, speculative activity is considered as having either of the following immediate results: (a) the excessive subdivision of parcels of land, and (b) the complete withholding of entire parcels from development of any kind. With respect to the former result, Merriam investigated the effects of excessive subdivision in the early 1940's and observed that: The spread of a city by unplanned sub-dividing, motivated only by the individual 23. owner's desire for profit, h to be extremely wasteful. In with our traditional toleran hazard methods, the typical interested primarily in the of his own land, has paid li to the broader needs and des community. Unused sidewalks, and water mains, fireplugs, and lonely houses on unkept dismal reminders of this unb as proved accordance ce for hap-subdivider, development ttle attention ires of the streets, sewer street lights, lots remain as ridled expansion. 35 He cites figures for the United States that indicate a very large surplus of subdivided lots, with estimates as high as <7 15,000,000 excess lots. According to Merriam the following 37 figures are illustrative of the general situation: Area Milwaukee County (Wisconsin) Redford Township (Detroit) Chicago Lots Platted 39,313 27,183 1,222,000 Lots Not Used 37,962 26,004 554,000 Proportion Not Used 90.34% 53 .66' Lovelace cites North Vancouver as being an extreme example of excess land subdivision during a period of rapid speculative 3 8 activity. There are numerous other examples, one of the more spectacular being the rampant speculation and subdivision 3 9 o^ the Saanich Peninsula during the early 1900's. Not only does excessive subdivision prematurely remove lands from more logical or productive uses - such as farming -it may also hinder the development of an area when the time 24. is appropriate., due to the complication of real estate trans -40 actions arising from diverse patterns of land ownership. Understandably, social and economic costs associated with excessive, uncontrolled subdivision of land are consi-derable. Wherever the present and future welfare of the com-munity as a whole has been sacrificed for immediate indivi-dual gain, the results are \"...the familiar blighted districts, the wasteful improvement-scarred areas, and the high costs to 41 the community\". Speculative activity that results in the withholding of urban fringe land from development, artificially affects the tempo and sequence of municipal development and in so doing has a direct, adverse effect on the community as a whole. The marked urban .decentralization of recent years is some-times attributed to land speculation. Regardless of whether or not that statement is justifiable, if land within the borders of an urbanizing area \"...is held vacant or in less-developed use than current conditions alone might justify, then the boundary of the urban area will tend to be further 42 from the CBD than would otherwise be the case\". The re-sulting sprawl, whether fostered by speculative activity,or not, negates and frustrates the very purposes of urban agglo-meration - specialization, interaction, and concentration of people. In a growing community, the following items are most affected: 25. 1. The actual costs of municipal facilities and services -including the efficient provision of police and fire protec-tion, schools, bus lines, streets and transportation corri-dors, utilities, etc. The cost of initially providing these services, as well as the cost of maintenance and operation, is closely linked to the actual sequence in which different areas of a large community are developed. For example, the sequence of subdividing land determines \".-..whether linear facilities such as pipes and streets will have to be extended inefficiently over long distances to serve scattered users or will be extended gradually to serve areas built in careful 44 phase with efficient facility growth\". 2. The retention of municipal control over the eventual character of development. Consider, as an example, a case where the municipal master plan requires future intensive development served by public sewer and water lines in a par-ticular area which presently happens to be remote from any utility lines. If control over the actual timing of develop-ment is affected by speculative activity, the area in question could be the premature subject of a considerable amount of subdivision and low-intensity development served by indivi-dual wells water sources and separate sewage disposal units. The existence of this type of development may make it very difficult at a later stage to convert the area to the more intensive character required by the evolving municipal pat-tern, even though important community-wide reasons may exist 26. for doing so. In similar fashion, as Fagin notes, \"...an important future industrial district may become so cut-up by scattered small-scale factories as to preclude its eventual development as a planned, co-ordinated industrial district 45 when the time is ripe\". 3. The maintenance of a desirable degree of balance among various uses of land. For instance, it is often essen-tial to the economic stability of municipalities - especially those which contain large quantities of low-value homes -that the service costs be offset by tax income from commercial and industrial sources. In such cases it is critical that new residential construction be timed in proper relation with commercial and industrial expansion. Another type of balance among land-uses involves the somewhat subtle relationship of areas of varied character. For example, The village of Has tings-on-Hudson in New York has a policy exercised through the zoning ordinance which regulates the timing of apartment construction in rela-tion to the rate of one-family home buil-ding in accordance with a 15 to 85 ratio. Thus, for instance, whenever 85 new one-family dwellings have been built, the village may issue permits enabling 15 dwelling-units in apartment buildings. This regulation is intended to maintain what is locally felt to be a desirable pre-dominance of one-family dwellings in a commuter village, but at the same time to make possible a necessary though smaller supply of rental apartmentsThe device makes the timing of one element conditional on the timing of another related element.46 27. 4. The maintenance of a high quality of community ser-vices and facilities. During periods of rapid land develop-ment adequate time intervals are required for the assimilation of residential, commercial or industrial additions to the community. When land is subdivided at a faster rate than muni-cipal facilities and services can be added, \"...the resulting overloads on existing capacities cause a decline in the qua-lity of services. Uncontrolled, this deterioration can result in seriously substandard levels of water supply, sewage and 47 waste disposal...\". This section has detailed some of the typical affects of land speculation on the community. Yearwood concludes that, Speculation leads to waste of a valuable . resource. There is waste in taking land out of a productive use before it is ready for another; waste is tying up capital for long periods in an unproductive enterprise, with more in taxes, interest, and special assess-ments; waste in the division of land into lots that are too small, or of poor design, or poorly located; waste in zoning too much for business use; and waste in replatting land which has been prematurely subdivided. There are other wastes too: increased utility costs, increased maintenance costs, and in-increased overall governmental costs, all of which affect the community adversely.48 It is worth noting here that there is \"...widespread opposition to any type of control which would hamper the activities of those engaged in the speculative enterprises connected with the conversion of raw acreage into urban 28. lots\".49 Widespread opposition to control of speculative ac-tivity appears to be a common phenomenon and its force is responsible for much of the disorderly growth on the fringes of urban areas. More will be said on the subjects of control-ling not only land speculation but private land use, in a later chapter. The Market for Undeveloped Urban Fringe Land The demand for undeveloped land is essentially a \"derived demand\": that is, the demand for this particular type of land develops from and depends upon the demand for satisfying what, in this case, happens to be a basic human requirement -shelter. According to Hamilton, \"... the return from ownership of undeveloped land is not primarily income but rather capital appreciation. The value of undeve-loped land depends almost entirely upon the final use and the timing of development, any income provided prior to development is usually insignificant in relation to this capital appreciation.\"50 In their article, \"Land as a Growth Investment\", Ricks and Weston have identified five stages in life cycle of land within any given urban area that undergoes development.^ These land-use stages are (1) agricultural, (2) pre-development, (3) original development, (4) underdevelopment, and (5) re-development. In the context of this study, however, only the 29. Figure I LIFE CYCLE OF LAND VALUES U < P4 W cu p o w T I M E Source: R.B. Ricks and J.F. Weston, \"Land As a Growth Investment\", Financial Analysir.ts Journal, Vol. 22, July/August 1966, p. 70. 30. first three stages are of significance. These particular stages, which Hamilton has denoted by the prime determinants of value rather than actual land use, are (1) agricultural value, (2) potential development value, and (3) value at the time of development.52 The three stages are illustrated in Figure II. Although this study is primarily concerned with land that falls within Stage Two, it is important to exa-mine both Stages One and Three for they serve as the con-straints or boundaries for Stage Two. The value of the undeveloped, agricultural land in Stage One, before other uses are considered, is simply the capitalized value of the income obtainable from agricultural uses. During this stage, changes in the price of land are in-fluenced by any changes in productivity and/or price changes for the final agricultural outputs. Assuming that farm prices are controlled to a significant degree - through marketing boards, for example - land values would tend to increase gradually over time as Figure I illustrates. Land would remain in Stage One of the development cycle as long as the market value - based on agricultural use - equalled or exceeded the maximum price payable for some other use. Fur-ther to this point, Hamilton notes: Even with potential urban use in the foreseeable future, the present worth of the land for development is less than the agricultural value. Observe that it is the value generating use rather than the actual land use which 31. Figure II STAGES OF LAND VALUES (Developed) AGRICULTURAL .VALUE LATENT VALUE HIGHEST AND BEST USE STAGE ONE STAGE TWO STAGE THREE T I M E Source: Stanley W. Hamilton, \"Price Movements in Undev-eloped Land Facing Urbanization: A Micro Study\", Unpublished PhD. Thesis in Business Administra-tion, University of California, Berkley, p„ 46. 32 . distinguishes Stages One and Two. A property may remain in agricultural use well beyond the point at which farming ceases to be profitable.53 Land in the other extreme, Stage Three, is characterized by actual development, and its value in the short run is de-rived from the capitalized value of the land's contribution to income production as an urban property. There are two items to appreciate here. In the first place, since develop-ment of the land may occur over some extended period of time, the actual boundary of Stage Three is subject to interpreta-tion. For most purposes, however, it is sufficient to simply classify property as being in Stage Three when income-pro-ducing improvements are provided on the site. Secondly, the value of the land itself in Stage Three is difficult to deter-mine, since the total income subject to capitalization in-54 eludes a certain amount derived from the capital improvement. In the context of this study, however, the important considera-tion is that land be properly classified as between Stages Two and Three. Thus, \"Unlike Stages One and Two where the boundary is determined by value generating considerations, Stages Two and Three are delineated by the presence of on-site income producing improvements\".^ The interim period, Stage Two, is illustrative of price rising above the current agricultural use value, in expecta-tion of the future higher urban-use value. Consequently, the actual value of land in this stage is highly uncertain, depending on its use at some future period in time.5^ The characteristics of the market in Stage Two, as well as the process of value determinantion within this market, will be examined in more detail in the next sectit Lon, For the time being, the following simple equations serve to summarize the three stages of land values and the 57 conditions defining the boundaries: Stage One: A^it ~ P M Vit Stage Two: A M Vit — P M Vit — (DMV^ CD) t Stage Three: (DMVi - CD) > PMVit where: AMV^t = market value of unit i of land in period t based solely on agricultural use; PMV-,. = market value of unit i of land in period it t based on potential development; DMV^ = market value of the developed unit i of land in period t, assuming development occurs in period t. CD cost of development in period t. 34. Land Speculation Reconsidered The aforementioned opinions on land speculation and its effects, although widespread, appear to be based on at least three misconceptions: 1. the assumption of a fixed supply of land and a dis-regard as to the influence of demand in the determination of market prices; 2. the confusions of speculators with those land owners who may have some degree of monopoly control over portions of the supply; and, 3. the belief that speculation, of and by itself, is the cause of excessive inferior subdivision and the resulting ur-ban sprawl. The result of the first misconception is an underestimation of the degree of competitiveness particularly in the urban land market. Land is not as unique a \"commodity\" as many would be-lieve. It is true that aside from relatively insignificant amounts reclaimed from aquatic areas or \"created\" through the use of air rights for building purposes, the supply of land is fixed in physical terms. However, the economic supply is con-siderably less inelastic. If the supply of land was perfectly inelastic, the sole response to an increase in demand would be an increase in price. Such is obviously not the case, 35 . particularly with land on the urban fringe, as MacKay ob-serves: . . an increase in the demand for urban land not only results in \"price increases but also in an expansion in the area of land used for urban purposes as well as an increase in the intensity with which exis-ting urban land is used. The difference in elasticity between the physical and the economic supply of land is determined by the degree to which changes in demand are met by changes in area and intensity of use. The economic supply of land is still more inelastic to changes in price than the supply of many other products, but it is not nearly so inelastic as the physical supply.58 It has even been concluded that \"... for any individual entre-preneur, the supply of land is only limited by the price he is willing and able to pay\".59 The important point is that the actual degree of elasticity, combined with the widespread ownership of land, produces conditions of supply that are considerably more competitive than many would suggest. Equally significant is the inadequate attention to the influence of demand on the price of land. Referring back to the three stages of land values, land in Stage Two is essen-tially subject to three sets of buyers.60 The first set -those buying for agricultural use - establish the minimum price. The second set includes developers who purchase unde-veloped land only if they have strong expectations of being able to develop the property and later resell at a profit. However, as Hamilton states: 36. Due to the nature of the market, the developer acts as a price-taker for both the land and the developed property. As such, the developer cannot influence either the price of land or the price of the com-pleted property. The price of land is set in an imperfect but quasi,-competitive market. The price of developed property is derived from the price of the standing stock of developed property.61 This is closely related to the second popular misconcep-tion - that of speculators exercising monopolist powers. The ownership of land, both rural and urban, is widely dispersed in North America. If it were not so, and land ownership were concentrated among relatively few persons as is the case in some South American countriesthe result would be a definite monopolistic market and generally inefficient land allocation. To the extent that the location of land is fixed, as well as the fact that no one unit of space is identical with any other in terms of physical characteristics, the owner of a particular site can exercise considerable discretion as to his selling price. The price of a unit of land may reflect monopolistic conditions only in relatively few instances, and for this to occur either of two conditions must exist: (a) there is no alternative site for a particular use; (b) there is no alternative use for the site. In the first instance, the landowner is a monopolist who can set a price on his land which is not influenced by the pricing policies of other landowners. In the second, the potential user is a mono-polist who can offer a price which is not 37. influenced by the pricing policies of other potential users. If both conditions hold, there is a bilateral monopoly and the price will be settled by bargaining. The price of land is apt to be too high in the first case, too low in the second, and is indeterminate in the third.62 In the vast majority of cases, powers of monopoly control do not exist to a significant degree in the land market. There are two points to consider here. In the first place, although land is bound by its physical location, \"... in the economic sense land is mobile to the extent that it can move from one use to another depending upon the price that each use is willing to pay for it. Thus, it can move from where it is 6 3 plentiful to where it is scarce, in economic terms\". The second point concerns the degree of land substitutability -not of the resource itself, but of various units or sites of land. It is generally accepted that no individual owns so much land that there are not alternative sites, owned by others, available for development, and which represent reason-able substitutes. The third set of purchasers operating in Stage Two are the investors or land speculators, whose object is to with-hold land from development while awaiting anticipated price increases. The usual method is to purchase land in fringe areas, at prices that reflect the existing value in some ag-ricultural use, and hold the land until it can be sold for a higher price - in line with the potential value that could be 38. obtained in the land's most remunerative urban use. Con-trary to popular belief, the speculator makes no personal ef-fort to increase the value of his land; he merely keeps it off the market until such time as he feels he can receive a pro-fit,64 The end result is that the price of a unit of urban fringe land in the short-term may reflect its inflated value, to the extent that it includes the speculator's profit as well as the acquisition costs. Thus, in the early years of urbani-zation at least the effects of speculative activity are re-flected in higher land prices than would normally be justi-fied in Stage One. Due to the relatively inelastic supply of this type of land, the immediate reaction to an increase in demand would be an increase in price, rather than an increase in quantity supplied as well as an increase in price. This initial reaction would not persist because, even within the short-run period, the increase in demand would soon cause an expansion in the area of fringe land available for urban de-velopment . The third apparent misconception concerning land specu-lation - the belief that speculation leads to excessive, in-ferior subdivision and urban sprawl - is based on a false assumption. Although examples of urban sprawl are often linked to the activities of speculators, this does not indicate that speculative activity itself is bad. Rather, poor subdivision conditions imply inadequate public controls on land use. The whole subject of private land ownership and public controls is key in any discussion on speculation, and will be examined closely in the Chapter succeeding the analysis. 40. REFERENCES 1. Angus N. MacKay, \"Land Speculation - A Comment\", Plan, Vol. 6, No. 2, December 1965, p. 83. 2. Raleigh Barlowe, Land Resource Economics, Prentice-Hall, Inc., Englewood Cliffs, N.J., 1958 , p. 227. 3. loc. cit. 4. Paul A. Samuelson and Anthony Scott, Economics, McGraw-Hill Co. of Canada, Toronto, 1966, p. 461. \"Arbitrager\" is the term commonly applied to those who speculate in financial markets. 5. C.E. Elias, Jr., and James Gillies, \"Some Observations on the Role of Speculators and Speculation in Land Development\", U.C.L.A. Law Review,.Vol. 12, No. 3, March 1965, p. 789. * 6. An ancient joke used by commodity specialists illus-trates this point: A speculator in soybeans miscal-culated and was unable to dispose of his lot of soy-beans. Thinking to salvage something from the wreckage of his hopes, the hungry speculator opened a can of soybeans for dinner. There was nothing in the can. A wise and older speculator in soybeans commented: \"You see,'there are soybeans for eating and soybeans for trading\". (Elias and Gillies, p. 790) 7. Samuelson and Scott, op. cit. , p. 454. 8. MacKay, op. cit. , p. 83. 9. Elias and Gillies, op. cit. , p. 789. 10. MacKay, op. cit., p. 83. 11. cited by Robert C. Weaver, \"National Land Policies -Historic and Present\", U.C.L.A. Law Review, Vol. 12, No. 3, March, 1965, p. 7T9: 12. John Delafons, Land-Use Controls in the United States, The M.I.T. Press, Cambridge, Mass., 1969, p. 4. 13. Richard M. Yearwood, \"Land Speculation and Development - American Attitudes\", Plan, Vol. 9, No. 1, March 1968, p. 16. 41. 14. Delafons, op. cit. , p. 4. 15. ibid, p. 3. 16. Yearwood, op. ci t. , P- 16. 17. Delafons, op. cit. , P. 4. 18. Jon Ruddy, \"You Too Can Bt, a Land Speculator\", Macleans, Vol. 18 No.1 , January 1968 , pps . 22-24, 40-41. 19. ibid, p. 23. 20. Yearwood, p. 22. 21. R.W.G. Bryant, \"Reply to Mr. MacKay\", Plan, Vol. 6, No. 2, December 1965, p. 93. 22. ibid, p. 94. 23. Delafons, op. cit•, p. 12. 24. Yearwood, op. cit., p. 17. 25. \"The Scarcest Commodity\", The Economist, Vol. 195, No. 6096, June 25, 1960, pps. 315-16. 26. Frank Fogarty, \"Land: A New King of Boom\", Architec-tural Forum, February, 1957, p. 101. 27. William Lean, Economics of Land-Use Planning: Urban and Regional, The Estates Gazette, London, 1969, p. 9. 28. loc. cit. 29. American Society of .Planning Officials, cited by Yearwood, op. cit. , p. 15. 30. William H. Whyte, \"Urban Sprawl\", Fortune, January 1958, p. 102. 31. loc. cit. 32. loc. cit. 33. Yearwood, op. cit. , p. 22. 34. Henry Fagin, \"Regulating the Timing of Urban Develop-ment\", Law and Contemporary Problems, Vol. 20, No. 2, Spring, 1965, p. 298. ' 42. 35. Robert E. Merriam, Society of Planning Officials, Chicago, » ^ 36. loc. cit. Vol 40, No. 1, 1948,pps. 69-71. Co., Victoria, 1970, Chapter 10, Boom\", pps. 189-209. 40. Kevin J. Cross, Evaluation, Community and Regional panning DHI^Hlty of B.C., Staff Research Project 2 , 1965 , pps. 13-14. 41. Merriam, op. cit., p. 2. d? Richard F Muth, \"Urban Residential Land and Housing 4 2 • • ^ M a S e ts\" ; I ^ ^ t ^ ^ S' Perloff anTTiwc^rWa^io, Jr., eds. p. 43. Adapted from Fagin, op . cit., pps. 300-302. 44. ibid, p. 300. 45. loc. cit. 46. ibid, p. 301. 47. ibid, p. 302. 48. Yearwood, op. cit., p. 19-49. Cornick, P j ^ t u r ^ d i v i s i o n , cited by Yearwood, op. cit., p~ 2T] PhD. Thesis in Business Administration, University of California, Berkley, 1970. cn p Bruce Ricks and J. Fred Watson, \"Land as Growth 5 1' Investment ^ ' Financiaj__An_ni^^ Vol. No. July/August 1966, pp. 69-/8. 43. 52. Hamilton, op. cit. , pps. 44-45. The ensuing discussion draws extensively on this source. 53. ibid, p. 47. 54. In the long-run, the value of land in Stage Three may, of course, be considered higher, as there is time for the property to become redeveloped at a higher use. 55. Hamilton, op. cit., p. 47. 56. Ricks and Weston, op. cit., p. 57. from Hamilton, op. cit. , p. 48. 58. MacKay, op. cit. , p. 88-89 . 59. H.J. Davenport, The Economics of Enterprise, The MacMillan Co., New York, 1913, p. 169; cited by Ratcliff, Urban Land Economics, McGraw-Hill, New York, 1949, p. 282. ~ 60. Hamilton, p. 50-52. 61. ibid., p. 51. 62. MacKay. op. cit., p. .89. 63. Richard U. Ratcliff, Urban Land Economics, McGraw-Hill, New York, 1949 , p. 283. 64. MacKay, op. cit., p. 84. 44. CHAPTER III SCOPE AND METHODOLOGY OF THE STUDY Studies must be impartial: the task is neither to prove that a particular policy is correct, nor to suggest that a particular objective would be desirable; this may emerge from the study, but the end must never be permitted to prejudice the careful and methodical approach to the data.l Objectives of the Study The first stage of the methodical approach to a study of urban land values is to outline precisely the questions to be investigated and resolved. This initially requires the clear formulation of the study objectives. It has been stated that due to the nature of the real es-tate market \"it is characteristic that the seller is inexpe-rienced and unfamiliar not only with market prices but with 2 the mechanics of real estate transactions\". In view of this statement, the primary objective of the empirical study is to measure the changes in raw land values-, from 1949 to 1970 in Kamloops and to rationalize them in terms of market behaviour. 45. Market behaviour inherently involves an activity which has been termed or labeled 'land speculation'. Chapter II discussed the nature of land speculation and its apparent effects on the land market. Milgram defines speculation as simply \"the holding of ground out of use pending its sale at a higher price\".3 An objective of the analysis will be to establish if, and to what extent, this definition of speculation is respon-sible for both the increase in the price of raw land, and the discontinuous fragmented growth pattern (\"urban sprawl\") of Kamloops. A suggested cause of urban sprawl, and the resulting in-crease in raw land cost, is the independence of decision among competitors for land use. Individual competitors have a dif-ferent' set of future expectations and demands for compensation.. The rapid expansion of the economic base of housing has promp-ted many developers to respond to the demand for housing and produce a variety of discontinuous unrelated developments. These developers are usually called speculators and some ear-lier cited authors have positively linked rising land costs, premature subdivisions, and an excess of building lots with speculation. Harvey and Clark in \"The Nature and Economics of Urban Sprawl\" conclude that speculation is \"a motivation of tiie growth process and that all incremental additions to the urban fringe are speculative ventures\".^ Therefore, the re-search will attempt to determine if it- is the independence of placement and timing perpetuated by public policies which al-lows a lack of coordination in the location decision, permitting a sprawl pattern and motivating the current specula tion pattern. Public policy has definitely supported the singl family home as a suburban environment and accentuated single family development as opposed to central city multiple deve-lopment or even redevelopment. In addition, most lenders sup-porting subdivision development demand that projects be orga-nized in completable units which will not extend beyond one, or a maximum three, building seasons. Also, has speculation contributed to increased service costs of electricity, water and sewerage disposal, and paving which are constructed by the lineal foot, and which with fragmented growth function only at a proportion of capacity? If the increase in lot price is attributable to the rising cost of raw land combined with in-creased development costs, what proportionate relationship is the increase in land costs to increased utility costs? Finally pertaining to speculation, if land is being held off the mar-ket when it is ready for development, resulting in pockets of growth, who is responsible for this action? That is, are in-dividuals, real estate agencies, construction companies, or other corporate developers holding land off the market in an-ticipation of their opportune moment of subdivision? Directly related to changes in raw land prices are sup-plementary questions to speculation, which it is hoped well defined data will answer. For example, what effects has a rise in the general prices level had in increasing the price of raw land? By indexing the recorded sales of sample parcels over a twenty-two year period to a base year it is possible to 47. derive the net effect. An additional area of analysis involves the pattern of development of vacant land in the City of Kamloops since 1949. Besides ascertaining if a definite continuous pattern exists or discontinuous sprawl, as previously outlined, the data could reveal whether growth has been rapid in one area and then moved to another area or, in contrast, evenly distributed. Also, does development peak in one year, or is there a rela-tively average growth rate? It will be possible to delimit the geographic location of residential settlement by enumera-tion districts and correlate the results with relevant census data. Other questions to be resolved surround the registered ownership of vacant land. As explained later in more detail, the Torrens System of land registration has greatly facilitated the study of ownership. Not only will the data provide the types of owners but it also records the period of ownership of vacant land and the type of builder who improved the site. Accessibility to the unimproved site, within the City of Kamloops and surrounding region is the final area of analysis to be performed in the study. That is, the analysis will exa-mine to what degree the value of a site in the sample area is a function of the distance from the Central Business District to the urban fringe and to what extent is accessibility to economic activities and services a determinant of raw land 48. value? In summary, the preceding questions form the framework for the collection of data and subsequent analysis. Generally, within these terms of reference, it is hoped that the collected data will \"...succeed in deriving what part of the rise in the price of raw land is attributable to the development process it-self, and what part of the price increase is due to general demographic and sociological factors of urbanization\".5 Data Sources and Methodology Data must be handled before its complexities can be wholly appreciated; there can be no complete substitute for the reality of personal experience in survey.6 Following identificati on of the study objectives and out-lining .the questions to be analyzed, the method to be used to coll ect the information was determined. The foremost question was which method of analysis could be expected to yield the most effective results. The inexperienced researcher found that in dealing with the apparently simple but in reality com-plex questions of procedure, personal experience was extremely important. It was realized that no amount of subsequent mani-pulation or refinements in statistical analysis could overcome deficiences which are introduced during the initial stages in the collection of basic data. However, preceding a detailed 49'r examination of these inputs a description of the data sources is presented. Data Resources In 1911 British Columbia adopted the Torrens System of land registration, which originated by statute in 1858 by the enactment of the Real Property Act of South Australia. This system was established under government control for registra-tion of title to the land itself rather than registration of documents or deeds. (The traditional deed system requires an examination of the chain of documents produced by the vendor in order to establish that the vendor had bona fide title to the land.) An important criteria in deciding the best method of information collection is the cost which is directly corre-lated to the length of investigation and number of data in-puts required. The Torrens System requires that all titles be registered in the Land Registry Office, and this made it possible to acquire the sale dates, transaction prices and type of owner for sample parcels from 1949-1970 in one govern-ment office. Briefly, the ^our main features of the Torrens System which facilitated inexpensive data collection are: 1. It is a system of provincial registration of title to land; the province, within certain limitations, guarantees the title and operates the system's machinery. 50'r 2. Transactions must all be registered against-the title in the provincially operated land registry office, and they are not valid in the form of mere instruments executed by the parties as against other competing registered interests. 3. The certificate of title is intended to be a complete and accurate reflection of the result of all preceding transactions affecting the property. 4. Each parcel of land is recorded in the register at the land registry office as a unit of pro-perty. The land is surveyed and accurate boun-dary and parcel descriptions are available that facilitate the recording of land disposi-tions. 8 In addition to the land registry files access to the tax assessment rolls was of equal importance and benefit in com-piling the sample. The Kamloops assessment rolls identify the values of land and improvements separately and also provide the date of improvement. This made it possible to separate raw land sales from improved property sales and also identify mini-mum improvements which would be demolished prior to develop-ment. The assessment cards also chronologically listed the sales for each sample parcel from 1949-1970 adjacent to the corresponding title number and often it was unnecessary to search the title unless a new subdivision occurred. In summary, the existence of the Torrens System and access to the assess-ment rolls made the study financially feasible. However, it should be noted that there were some occasions when it was im-possible to trace a subdivision, rejoining, or redividing of individual parcels, even by cross referencing the land registry 51'r document number and corresponding assessment roll identity . number. Compilation of theData Sheet Preceding the discussion of the sampling technique and analysis and interpretation of the collected data, a detailed discussion of the selected quantifiable determinants of raw land value is presented. These determinants are derived for 620 sample properties in the City of Kamloops randomly chosen from a legal map by the extension of rays from a chosen point to the urban fringe of the city. The rays were chosen after analysis of demographic and land use data to establish the most appropriate areas for the study. These areas would neces-sarily reflect the greatest concentrations of new residential growth during the study period. Every property in a legal block which a ray passed through is included in the sample re-gardless of its land use zoning (residential, industrial, com-mercial) . The first procedure was to identify from the map the legal description of each property. Obviously, at this point it was impossible to decipher whether the parcel was vacant or im-proved, therefore, all defined properties were listed. To iden-tify the properties in the assessment ,cards it was necessary to record the block, lot and plan number. The second classifi-cation procedure was to record the enumeration district in 52'r order to be able to compare geographic regions with corres-. ponding census data, such as population growth. A zoning clas-sification follows directly after the enumeration district. Milgram proposes in her land study of Philadelphia that \"since use to which land can be put is a major determinant of poten-tial return the expected price of a parcel would reflect its zoning category at the time of sale\".9 It is hoped that this effect of zoning can be isolated in the analysis. Following zoning, the lot size of each parcel is recorded in an attempt to show the effect on price of square footage and lot frontage. It was possible to obtain both acreage for larger parcels and feet measurements for subdivided lots. No attempt will be made in the study to compare acreage values with changes in lot values but these will be considered as two separate categories. The next input to the program is the date of development. Since each property in a block which a ray passed through was recorded, and it was required that each property be located in the assessment cards to determine if it was improved, it was decided to record both raw land sales and improved property sales. The development date is then used to identify current vacant parcels and vacancy prior to development for improved properties. From planning maps an entry (#6) was made to the data sheet outlining the services provided and date of installation 53'r including both public utilities and land improvements to the vacant site. This is to determine which facilities, if any, are already in place when the homebuilder or developer pur-chases the land. For example, often development will precede the installation of an utility, such as the use of septic tanks until a city sewerage system is installed and this in-creases the minimum lot size allowable which will affect the lot price. The seventh variable in data collection involves travel time or accessibility to the CBD and other services and eco-nomic activities, such as schools and shopping. Quoting Milgram again, she states \"a priori it was expected that the development and price per acre would vary according to loca-tion and access to facilities...\".'*'0 Assuming contemporary values of individual transportation will be retained, decentralization of people is not only in-evitable but warranted. Combined with transportation values is the change in type of demand for spatial requirements. It has been estimated that a century ago a population of one thousand required approximately ten acres and today the requirements are one to two hundred acres. Therefore, it could be assumed tl^ at family size and income affect space consumption prefer-ences and consequently land prices. If higher incomes lead to more intensive bidding for raw land causing higher prices and a sparser residential location, accessibility to necessary or desirable activities will also affect values. To estimate travel times from traffic flow maps it was necessary to accurately identify the main streets bisecting the sample area, keeping in mind that rays from the same ori-gin do not provide the same accessibility to the CBD. Also, it was important to denote the growth pattern of the main ar-teries, that is the changes in main transportation routes, if any, from 1949-1970 and to try and identify the N-S or E-W \\ traffic systems.Since the data will be related to enumeration districts the geographic location within a district is also important. Not only will parcels within an enumeration dis-trict have different travel times to the CBD, due to relative distances from the main arteries, but also different commuting times to schools, shopping, and recreational opportunities within the enumeration district. The final section of information relates to the actual transactions of sample properties. The period of study is 1949-1970 inclusive. For each property in the sample the transaction date (month/year), title number, transaction type, type of owner, and sales price was recorded. The writer realizes there could be some error using the sales price as pointed out by Brigham in his study for the Rand Corporation. For example, \"public records are susceptible to large deviations from full cash value ... as there are a large number of sales by fathers-in-law to sons-in-law, builders to their construction firms, and so forth, and these'sweetheart sales.' may be at artifi-11 cially high or low prices\". However, using the land registry system and assessment rolls it was possible to eliminate the 55'r majority of non-arm's length transactions by referring to the document number corresponding to sales price and by referring to the names of the registered owners. It is hoped that there is minimal error, and that defects in data collection with respect to sales price will not significantly distort the results. Under the column labeled 'Transaction Type' a simple differentiation was made between a raw land rate and a sale of improved property. The type of owner was listed either as a private individual, real estate agent, holding company or corporation. The purpose of this grouping is to attempt to identify who is holding vacant land and possibly relate knowledge of the land market in Kamloops to the transaction price. That is, possibly owner characteristics, such as pro-fessionals versus non professionals and non building companies, dictate to some degree the holding period prior to develop-ment and consequently the price of raw land. However, when correlating the type of owner to other sale characteristics some caution is warranted, as to the reliability of the re-suits, because it was often difficult to determine the owner 'type' if not specifically stated as a company or agent, as frequently a registered individual represents corporate in-terests . Using the date of sale and sales price, of arm's length transactions, and combining this final data with the preceding inputs, it is anticipated answers to a number of different 56'r questions re the Kamloops raw land market will be resolved. These questions involve the type and number of transactions, price trends, land turnover rates, holding time, and the pat-term of development. With respect to the type and number of transactions, the total number of lots transacted from 1949-1970 will be calcu-lated in addition to the uniformity of sales, by recording the sales for each individual year to determine a trend in land sales. The number of lots not involved in a sale will also be tabulated, as well as identifying by size whether smaller parcels were bought and sold more frequently compared to large vacant areas. The price trend will be determined by measuring the. ave-rage price of all raw land transactions from 1949-1970 and in-dexing this price to a base year (1949) . This will provide the annual rate of increase and it will then be possible to deter-mine if this rate of increase is constant in addition to in-dicating the profitability of holding land. The average turnover rate relates the total number of land sales to the total number of lots. For example, if there axe 600 lots and 800 sales (1949-1970), the average turnover would be 1.3 times. This figure would then be compared to the uniformity of sales, as defined earlier. With respect to raw land, a more beneficial ratio would be to relate the vacant number of lots unsold in a-given year to the total of new subdivided lots to determine the effects of excess building lots on market values. Besides average turnover,* it will be possible to calculate if the number of transactions steadily increased as lots neared development as well as how many par-cels were bought by other than the ultimate developer. This combines with the final area of analysis which is holding time. Questions such as what is the median holding time before development and by whom, will be answered. In addition, what percentage of land developed was acquired in the year of de-velopment? preceding year? two years previous? more than five years previous? It is anticipated this investigation will reveal if there is a causal relationship between transactions and the development process. This concludes the examination of the selected variables from the data sheet and their relationship to the ensuing analysis. A flexible program was designed to apply the data to diverse situations applicable to different enumeration districts in different time periods. All the values selected were quantifiable but naturally there will be some error due to a certain degree of subjectiveness of decision by the re-searcher and the nonavailability of information in certain cases. However, regardless of these two negative aspects to the approach, the data should produce useable results and ex-clude subjects margined to the central objective of investi-gating the nature of land speculation in the City of Kamloops. 58'r Sampling Procedure Random sampling involves selection from some form of sample frame, and those most frequently used are lists, registers, and maps.... The essential requirements are that the frame must cover the whole popu-lation, must be complete, avoid duplication, be accurate and up-to-date and be accessible and available for use by the sampler. The defined area for the land study is the City of Kamloops as outlined in Figure #1. This area is composed of 6,300 legally defined parcels, for which there are assessment cards, and is exclusive of the unincorporated districts contiguous to the city's boundaries. Since the main objective of the study is to investigate the price changes of raw land in the urban area since 1949 it was decided to choose a point of origin, outside the earlier developed CBD, from which the rays would extend to the city limits to give an approximate 10% sampling of proper-ties. Therefore, since no ray passes through the heart of the central business district the analysis will not provide a study of land price changes in the CBD. The most effective technique to select a proportion of the total population was to extend three rays through chosen areas, primarily either developed in the study period or which are still vacant. Derived from a legal plan map, each property in every square block through which a ray passed represents one observation unit for which the preceding outlined data was collected. The total number of properties composing the r — ~ • — _ _ _ — — • • • ' ' 59. 60. representative sample is 620 parcels, or approximately 10% of the total number of properties. The first two rays (X and Y) are comprised of 368 and 72 properties respectively and are located in the northern and north western sections of Kamloops. The origin of these two rays is at the junction of Fortune Drive, Tranquille Road and 8th Avenue. 'Ray X' extends north to the Canadian National Railway tracks and 'Ray Y' terminates at the boundary between the unincorporated area of Brocklehurst and the City. The third ray crosses a southwestern section of the City named Sa-hali. This is a residential.subdivision adjacent to the Trans Canada Highway which began development in 1963 and is still expanding. This sample is comprised of 180 properties. 61. REFERENCES 1. Jackson, J.N., Surveys for Town and Country Planning, Hutchinson University Library, 1966 , p. T0~. 2. Ratcliff, Richard U., Urban Land Economics, McGraw-Hill Book Company Inc., New York, 1949, p. 289. 3. Milgram, Grace, The City Expands A Study of the Conversion of Land From Rural to Urban Use, Philadelphia 1945-62, Institute for Environmental Studies, University of Pennsylvania, Philadelphia, Pennsylvania, March, 1967, p. 123. 4. Harvey, Robert 0. and Clark, W.A., \"The Nature and Economics of Urban Sprawl\", Land Economics No. 41, February, 1965, p. 3. 5. Brigham, E.F., A Model of Residential Land Values, The Rand Corporation, Santa Monica, California, 1964, p. 131. 6. Jackson, J.N., op.cit. p. 21. 7. The required personal experience was provided by Prof. S.W. Hamilton, who greatly assisted in defining the variables for the computer program relevant to the objectives of the study. 8. Head, Ivan, The Torrens System in Alberta, The Canadian Bar Review, Vol. 35, 1957 p. 5. 9. Milgram, Grace, op.cit. p. 89. 10. Milgram, Grace, op.cit, p. 87. 11. Brigham, E.F., op.cit. p. 82. 12. Jackson, J.N., op.cit, p. 64. 62. CHAPTER IV DEFINITION AND HISTORICAL GROWTH PATTERN OF THE STUDY AREA In order to be able to objectively analyze the output from the computer program created to examine changes in vacant land values, it is necessary to understand the historical growth pattern in the Kamloops Region and more specifically in sample areas containing the selected Rays X, Y and W. The Kamloops Region includes the unorganized communities of Brocklehurst, Mission Flats, Westsyde, Valleyview and the Powers-Edmonds Addition which are contiguous to the city li-mits of Kamloops. These communities, which have experienced rapid growth in the last decade, contain approximately forty percent of the total population of 43,600 in the Metropolitan Region, and have played a significant role, as alternate resi-dential locations, in determining vacant land values in the study area. FIGURE IV-1: LOCATION MAP - KAMLOOPSBRITISH COLUMBIA. 63. (Source: British Columbia Bureau of Economics and Statistics, The Kamloops Region - An Economic Survey. Victoria, May 1961. 64'r The City of Kamloops - Historical Growth The history of Kamloops is the story of transportation. The city is the accident of geography, the meeting of north-south valleys with the only major east-west valley in Southern British Columbia.1 The City of Kamloops, situated at the junction of the North and South Thompson Rivers (Figure I) in the interior of British Columbia, was first established by the Hudson's Bay Company as a fur trading post in 1812. Due to its strategic location, the fort and adjacent lands soon developed into an important fur depot, defense post, and breeding grounds for the hundreds of horses required for the fur brigades. Little areal expansion occurred in the region until the Cariboo Gold Rush of 1861-1862 and the subsequent construction of a new fort in 1863 opposite the old site. \"In 1871 James Mcintosh acquired one hundred acres adjoining the Hudson's Bay property on its eastern boundary and engaged E. Dewdney 2 to lay out his property as a townsite.\" By 1880 the popula-tion of the newly settled townsite on the south shore was 500 persons. Between 1885 and 1905 the population increased to 2,500 with the advent of the Canadian Pacific Railway (1886) and Kamloops' designation as a divisional point. Also, in 1911 the Canadian National Railway began construction down the Yellowhead Pass from Jasper (Figure I) and in 1915 commenced operating into Kamloops. This achievement of \"transcontinental status\" initiated the development of the local economy along 65'r the lines of a major distribution centre. \"After the large migration of British settlers into Canada, 1903-1907, the cultivation of cropland succeeded mining as the major economic activity\" ... and \"...large scale ex-pansion occurred again in the 1930's when vegetable canneries were added at Kamloops\". Also, ranching grew in importance in the valley areas between 1200'-3000' elevation in the spring and fall and above 3000' elevation in the summer. \"At the end of World War I regular provincial cattle sales were initiated at Kamloops\"4 and \"in 1968 more than 30,000 head of cattle were sold providing over $4,000,000 in revenue to ranchers\".5 In addition to agriculture and ranching, the increasing influence of lumbering on the regional economy dates from the early 1900's, stimulated by construction of the C.P.R. Be-sides residential construction demands and a significant ex-port market, the local economy has provided \"market opportuni-ties in the manufacture of fruit and vegetable containers\"6 and more recently larger mills (Kamloops Pulp and Paper -Weyerhauser Co. 1955) commenced the production of pulp chips. Figure I also illustrates the importance of highways to the region. With railways providing the initial impetus to growth, it seems the impact of recent highway construction has provided the basis of the growth of the last decade. In 1962 the one hundred mile Roger's Pass section of the Trans Canada Highway (#1) was completed, decreasing travel time by ten hours between Vancouver and Calgary and providing a com-pletely Canadian route to the East. This event is still causing a rapid increase in economic and demographic growth in the region, and combined with the 1971 completion of provincial highway route #5 (Yellowhead Route) connecting highway #16 to Edmonton, growth will be stimulated to an even greater degree, especially in the transportation and tourist industries. Until amalgamation with the Town of North Kamloops (Dec. 31, 1967) the boundaries of the City of Kamloops con-tained the area outlined in green in Figure II. As previously stated, transportation routes have established the City of Kamloops as a node or a \"hub\" of inter and intra-provincial commerce. As a result there exists long narrow wholesale distribution sector flanking the main highway and railway routes which converge within the city limits. This sector developed into the main commercial district of Kamloops and is presently extending east into recently incorporated Valleyview. In addition, the topography of the area has gene-rally confined growth to the valley floor, between the South Thompson River and adjacent southern slopes. As a result the residential growth pattern, by concentric rings, developed as outlined in Figure II. However, the availability of flat land within the city limits is quickly diminishing and the most recent ring (1966) encircles much of the study area of Sa-hali (Ray W) which is a steeply sloping area in the O f K A M L O O P S »*«ieeo* CT\\ 68. southwestern section of the city. Due to the availability of flat vacant land in North Kamloops and in the contiguous un-incorporated districts much of the recent urban growth has occurred in these communities. This development pattern is discussed in the succeeding sections of this chapter. In summarizing the historical growth of Kamloops, it is extremely evident that the city \"owes much to the transporta-tion industry which has contributed to a significant extent 7 in the development of the economic importance of the region\". Transportation facilities will undoubtedly continue to shape the future of the region as evidenced by \"planned siding ex-o tension programs\" by the C.N.R. and a \"$300,000 construction project at Kamloops airport to provide a permanent air traffic control tower and related facilities\" to accommodate ex-panding air traffic. Study Area - Sa-hali (Ray W) Sa-hali is a subdivision situated in the southwestern sector of Kamloops within the original city limits. Its geographic location and proximity to other divisions of the city is illustrated by Figure III. This area was not developed to any significant degree until 1963 due to its hilly topogra-phy which is more expensive to service. The City of Kamloops did not make the same expensive FIGURE IV-IV: CENSUS TRACTS - SA-HALI. (Source: The Department of Public Works City of Kamloops. ' CITY O f K A M L O O P S o 71'r mistake as North Kamloops with respect to who is responsible for installing the required services. The developer in Sa-hali is responsible for the installation of all utilities excluding only the sidewalks and streetlighting. All utilities such as hydro and telephone must be placed underground and an instal-lation of adequate sewage disposal system is also required of the developer. Sa-hali has been serviced and developed in eight different sections since 1963 and the road system and subdivision plans have been largely dictated by the topography of the area. Figure IV dividies the subdivision into two enumeration districts. Both districts have higher than average incomes and services with view lots and an above average housing stock. North- Kamloops' (Figure' V) The historical growth of North Kamloops is divided into two sections. First, a brief history of the entire region is given, followed by a more detailed outline of the subdivided region through which Rays X and Y pass. (North Kamloops amal-gamated with the City of Kamloops on December 30, 1967.) General History North Kamloops, initially (1820-1840) was a grazing KPur. [ 'ARK A f t C A STHUR I S L A N D A P E HA VILLAGE h o ^ h y LOOPS Y-^U-ers KAMLOOPS - NORTH oURE IV-V: NORTH KAMLOOPS - LAND MERSHIP BY THE B.C. FRUIT LAND ^PANY. 3urce: Game, R.G., Director of inning, Thompson Valley Regional mning Board, Valleyview, B.C. i: i;' 73'r for the horses owned by the Hudson's Bay Company but with an influx of settlers after the Gold Rush (1861) the area was partially converted to agricultural use. However \"the alluvial plains of North Kamloops first began their real development with the interest of wealthy English capitalists\"10 who, headed by the Earl of Errol, formed the B.C. Fruit Land Company. This corporation \"secured by crown grant and purchase some 9000 acres, including all of North Kamloops, Brocklehurst, and the land between the west bank of the North Thompson River and the mountains from Hals ton to J amies on\". 1\"L The company then constructed an underground irrigation system using the waters of Jamieson Creek, and the holdings of the company were then sold, primarily on an acreage basis, to English settlers, desirous of establishing farms and orchards. The successful land assembly and subdivision of land in North Kamloops by the B.C. Fruitlands Irrigation Company, was accompanied by a small nucleus of residential and commer-cial growth in the southwestern section of the region. Figure VI delimits this area which subsequently became the Village of North Kamloops in 1946. By referring to Figure VI it is possible to recreate the growth pattern of the Village by establishing the age of the buildings by 'Period Constructed'. Generally, North Kamloops grew at a steady rate, within the area of Figure VI until subdivision began in the study area to the north in 1960. Table 1 gives the population growth of North Kamloops from 1946 to the amalgamation date in 1967. TABLE 10 Town of North Kamloops Population Year Municipal Estimates Dominion Census 1946 Inc. as Village 970 1947 1,100 1948 1,350 1949 1,550 1950 1,750 1951 1,979 1952 2,400 1953 3,000 1954 3,500 1955 4,000 1956 4,398 1957 4,800 1958 5,200 1959 5,600 1960 6,000 1961 Inc. as Town 6,456 1962 6,800 1963 7,500 1964 8,500 1965 10,000 1966 11,197 1967 12,700 Source: Construction Statistics, Department of Planning, City of Kamloops, 1971. 75'r It was also possible to obtain from the Kamloops' Planning Department the annual total of issued building per-mit values for residential structures from 1951-1970 (Table 2). These figures are included with population, also to show the increase in the number of residential units constructed in North Kamloops especially since major subdivision com-menced in the sample are (Rays X and Y) in 1962. 76. TABLE 5 Comparative Construction Breakdown North Kamloops 1951 1952 1953 1954 1955 1956 1957 19 58 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 Single Family Units 41 79 108 80 60 98 114 130 64 52 71 129 237 430 266 204 188 102 219 202 Amount (Building Permit Values) 5 166 319 517 597 476 764 825 1,268 692 534 788 1,354 2,306 3,692 3,300 2 ,594 2,413 1,285 2,375 2 ,442 ,000 ,925 ,400 ,500 ,500 ,300 ,770 ,160 ,490 ,500 ,340 ,000 ,404 ,860 ,350 ,700 ,435 ,220 ,000 ,700 Source: Construction Statistics, Department of Planning, City of Kamloops, 1971. Study Area - North Kamloops (Ray X and Ray Y) As previously indicated, the first residential and com-mercial development in North Kamloops occurred in the southern sector (Figure VI) due to the fact that the majority of the existing economic activities were concentrated in the City of Kamloops. However, due to a diminishing supply of vacant flat land suitable for development in the City of Kamloops in the late 1950's developers were forced to either purchase steeply sloping lots in the southwestern section of Kamloops or expand beyond the city limits. The administrators of the Town of North Kamloops became extremely anxious to annex future growth and' as a result placed almost no restrictions on prospective developers. The subdivision bylaw only required that the developer deposit enough funds with the Town to gravel the roads of a subdivision. There were no drainage or sewerage requirements and underground services were not required. As a result, prior to 1959 a sewage disposal system did not exist in North Kamloops. However, with a significant upsurge in Kamloops population forecast to coincide with completion of the Trans Canada Highway sewage bylaws were introduced in 1959, as septic tanks require a larger minimum lot size. Figure VII illus-trates the separate subdivisions in the sample area and Figure VIII illustrates the timing of the installation of sewage systems by municipal bylaw. All sewer pipes must be installed in the middle of the roads due to the sandy soil in the region. Therefore, where the gravel roads existed FIGURE IV-VI: AGE DISTRIBUTION OF BUILDINGS IN NORTH KAMLOOPS. (Source: Game, R.G., Director of Planning, Thompson Valley 7 g Regional Planning Board, Valleyview, B.C. . : —- j . A I J... • - - •- i ri'! r n -; all: v/>.' • V l^rnrr ^ x ^ x x x ^ x x ll^x I 11 ^ m s s p ^ \\ I ! j* COTTONWOOD iVEWi'-. [ : I J f T j- r-TTT J J s \\ -t ] -r—T-s ,—.—f- r-i v -J - > .A*-.' / i A 1 \\ e I * » » l aI -_ . \\N. ivewe xx. \\ * \\ VAr-.^ 1 I rZ-vv? V; X X X -A V .0/ 7-^ x x x v^ A. / /x J*- <- • \" A A. V A\" « ;v ' a 'A- •- A !<>:;„ - / V ; j < y f w ^ V' •4 ^ \"TTTT'T\"] J-.-A._j_X .i v /A /A '< > ' / / f \"••^i >-->-- x-- A A » j. ' » •, i. . \\ > ; ~v 1. \\—; i i I'I IVT? 1 A- \\ ; ! i* \\ | h ! I I i ! , . i j i ; A 1 ; i : / ' v A. / -A--»«• A >fc r' ' •. -1', ' -J -\"\" i\" r ^ \" . • A* i 1 r f ' 7 ri t •> r • yv. *7 X / \" -V A - - A / ' / V • i • V. . \" / -^ v - A ^ v - : w ^ • AV- / > A' • X / Xr^ X .A ,<' / s \\ ^ A v/ // - V < ••>. k -.-Vs. • • - ^ I \"<• ; .-a J /\\ rp: A - A v'-v>- A\" -vV ? ' ; ' • . V'X, VX-- A.,-, V > sic ' / .V v • A ; \\ ' ' A r-y-'ih.. . A , ' -vf.'\" / AA ' 4 U • KAMI CO P f; ( NOh'T-H ) V-o \\ AGE Of BUILDINGS / Kt 5A.' /960\" 1970 1955-1959 't!: 19 50- 1954 1945 - (949 •s -wit!? BEFORE 1945 - \\ ..... / /V W J % - \\ ^ ^ - / ; o - ? -\\ \\ ^ • \" V v . y - K ' * • i if -(PERIOD CONSTRUCTED) ** -U *- * £ - - fy f £ ™ IV-VII^ RESIDENTIAL SUBDIVISION BY YEAR IN STUDY AREA Engineer, Department of Public Works, 7 9 City of Kamloops, B,C. ™ -j^VIII: INSTALLATION OF SEWAGE SYSTEM BY YEAR IN STUDY AREA (Source: McGregor, N., Chief City Engineer, Department of Public Works, fSourrp ' M A I N TRANSPORTATION ARTERIES - NORTH KAMLOOPS. City of' Kamloops1\"' B C' ^ ^ C i t y E nS i n e e r> Department of Public Works \" ' ' 81. XtASlMUK ISLAND KA-V.LOOPS - .NORTH SCA-Lfc - I\" • 6 DO\" yc> fNO tit^T i f * a Q D f» f. UMJVTAflY SCHOOL * *AM,.OCH'S HI^ H 5.-M. OL L t PA R K A ft £ A n 83'r prior to the installation of sewers it was necessary for the Town to tear up the roads and completely rebuild them. The expense of this procedure is one important factor which caused North Kamloops to amalgamate with the City of Kamloops. The main arterial routes providing accessibility to the subdivision are illustrated in Figure IX. There has been a significant change in the traffic pattern in North Kamloops since the construction of the Overlander Bridge which trans-formed Fortune Drive into a main artery. However, this change mainly affects'the traffic patterns south of the sample area and Tranquille Road and 6th Street still provide the main access to properties within the sample region. Finally, Figure X divides the study area into enumera-tion districts. This makes it possible to correlate concensus figures such as population and income with the output from the program. The Unorganized Communities As was stated in the introduction to this chapter the unorganized communities surrounding the City of Kamloops com-prise a very considerable part of the metropolitan area. The following analysis of these communities will show them gene-rally residential in character, with the exception of Mission Flats, and to contain a very considerable percentage of the local housing stock. The information contained in the fol-lowing analysis has been acquired directly from A Summary of Land Uses published by the Thompson Valley Regional Planning Board and by personal interviews with Mr. R.G. Game, the Board's Director of Planning. Powers-Edmonds Addition This community occupies approximately 70 acres on the brow of the hill below the Trans Canada Highway and above the river at the western entrance to the city and any expan-sion of the city to the west depends on access through the Powers-Edmonds Addition which is presently not sewered. Only one house has been constructed in the area since 1967 and the age distribution of the ninety eight buildings recorded in the area is as follows: TABLE 3 Age Distribution of Buildings \" Number ' % Distribution 1968 - 1960 22 22% 1959 - 1955 15 15 1954 - 1950 17 17 1949 - 1945 10 10 Before 1945 34 36 Total 98 100% Source: A Summary of Land Use, Thompson Valley Regional Planning Board. This area is only fifty percent developed and has a population of approximately 400. However, much of the re-maining land is not suitable for development due to pro-blems imposed by broken topography and steep slopes. Mission Flats Further west of the City and adjacent to the south bank of the Thompson River is Mission Flats. Low elevation is the main objection to the area's use for heavy industrial pur-poses. There is a very considerable foreshore suitable to development but it has been suggested that the site be left undeveloped since it is subject to annual spring floods. Also, continued high water throughout the summer limits the usefulness of the land. The total approximate area of Mission Flats is 528 acres;' 39 acres are residential and 11 acres commercial. The population of 350 is housed in eighty-seven residential dwellings, nearly all of which are in a deteriorated condi-tion and the area generally reflects a low standard of im-provements. 86. TABLE 4 Age Distribution of Buildings (including housing) Number % Distribution 1968 - 1960 1959 - 1955 1954 - 1950 1949 - 1945 Before 1945 24 17 46 23 34 17% 12 32 16 23 Total 144 100% Source: A Summary of Land Use, Thompson Valley Regional The two main problems to the expansion of the Mission Flats as an industrial site is the low elevation and provi-sion of access to both North and South Kamloops. Brocklehurst Brocklehurst is the largest single unorganized community on the outskirts of the City of Kamloops and is also the fastest growing area in terms of residential assessment and population. Between 1965 and 1968, two hundred and seventy new dwellings were constructed in Brocklehurst. The community occupies 1,124 acres north and west of Kamloops and is ap-proximately 50% developed. The breakdown, of land use by. acreage is as follows: Planning Board 87. TABLE 5 Land Use Total Acreage % Distribution Residential Commercial Agricultural or Vacant Public 2_8 1,124 407 10 678 36% 1 60 3 Total 100% Source: A Summary of Land Use, Thompson Valley Regional This represents a very low utilization of the land re-sulting from uneven and inefficient subdivision and the actual density of the developed residential land is even lower because of the 10,000 square foot minimum lot size, imposed by the general lack of community sewerage collection and treatment. The following percentages classifying the existing structures by age includes residential, commercial, indus-trial and public uses. However, the majority of the struc-tures are residential as there are only seventeen commercial and public buildings. Planning Board TABLE 10 Age Distribution 1968 - 1960 1959 - 1955 1954 - 1950 1949 - 1945 Before 1945 67.7 15.6 3.4 4.7 8 . 6 100.0% Source: A Summary of Land Use, Thompson Valley Regional While the stock of housing including a large number of mobile units (Figure XI) is reasonably good, the comparable standard of services is poor. Basically, the area is not sewered or drained but is supplied with domestic and irriga-tion water by the B.C. Fruitlands Company. The area is ser-viced by telephone,hydro and natural gas. 21.75 miles of roads (89.3%) are improved with asphalt. Westsyde Westsyde stretches 4.73 miles along the road bearing the same name, north and west of Kamloops. The area chosen to include the community, which also coincides with the general distribution of domestic water by the B.C. Fruitlands, contains 997 acres and has a population of 2,300. Planning Board KAMLOOPSVAREA E X I S T I N G L 0 C A ™ N OF TRAILER PARKS IN THE (Source: Thompson Valley Planning Board, Valleyview, B.C. 89' EXISTING LOCATION OF TRAILER PARKS IN THE KAMLOOPS AREA ( AUGUST 1970) LEGEND Nama of Trailer Coo/r No, of cccupkd bsys(cxcl. Obi. V/I - 43 singles <— 6 singles > I <2>l. — I5 singles 4 <&f». Z singles ' — / sing I* ' - • 4 olntfea V/nstsyda Raylaigh Barnhartval9 Knitfcford Mission Flats CJ4.R. Junction Q North Th&npon Wwy. (Seo Land • Usb Ma pa} /\\CPrltot9 Land) \"» CcnJ dcYet-epemeot prestotl/ ankaetn Total' 629 singlo Trailer* IC Doublo Wldo TTo/lcra 682 available Boys 2 3 9 proposed E^ya < 3 Courts) The river valley is fairly narrow through the length of Westsyde but while some of the lowest, and as yet unbuilt ground by the edge of the North Thompson River, floods the region on a routine basis, the greatest recent problem, with regard to drainage, has been created by subdivisions above the Westsyde Road on comparatively high ground located on the deltas of ravines. Westsyde including all classes of development, is at present only approximately 25 percent developed. However, residential areas (including trailers - Figure XI) predominate and commercial development is negligible. Land utilization is as follows: TABLE 7 Land Use Acres Dis tribution Vacant or Agricultural 742 213 74.4% 21.4 Residential Commercial Industrial Public 7.4 33 1 . 8 .2 .7 3.3 Total 997.2 100.0% Source: A Summary of Land Use, Thompson Valley Planning Board Regional There are 120 permanent trailers in the Westsyde area, many on individual house lots. The area has generally poorer 91'r quality dwellings, but since the introduction of the Community Planning Area Regulations concerning building standards, housing has been considerably upgraded. However, there is no existing community sewer treatment and there exists a very inefficient pattern of subdivision considering the land is only 25% developed. TABLE 8 Age Number % Distribution 1968 - 1960 239 50% 1959 - 1955 126 26 1954 - 1950 72 15 1949 - 1945 14 3 Before 1945 27_ 6_ Total 478 100% Source: A Summary of Land Use, Thompson Valley Regional Planning Board Valleyview Valleyview, the last community on the boundaries of Kamloops, is actually in a relatively more favourable position than the City of Kamloops with respect to transportation routes. This community (pop. 3,500) was incorporated in 1970 and with considerable industrial acreage and commercial and multi-family residential development, has a sound economic basis. Valleyview contains 546 acres of developed land and is entirely a valley development.stretching 3.5 miles eastward from Kamloops along the Trans Canada Highway and is showing no tendency yet to climb the hills to the south. In compari-son to the other communities, Valleyview is almost three-quarters developed with only one-half residential. TABLE 9 Land Use Acres % Distribution Residential 294 53% Commercial 59 10 Industrial 15 2 Agricultural or Vacant 156 28 Public 22 4 Total 546 100% Source: A Summary of Land Use, Thompson Valley Regional Planning Board While the standard of individual homes is very high, the standard of subdivision is not, and the usage of the land is therefore in many cases not efficient. Also, trucking is an important economic activity in Valleyview and requires an excessive amount of outside storage. Coupled with a former minimum lot size of 15,000 square feet prior to the installation of sanitary services, the population of 3,500 is quite low. TABLE 10 Age Number Dis tribution 1968 -1959 -1954 -1949 -Before 1960 1955 1950 19 45 1945 324 214 95 78 19 44.4% 29.3 13.0 10.7 2.6 Total 730 100.0% Source: A Summary of Land Use, Thompson Valley Regional Planning Board Valleyview is well serviced by municipal services to a degree that is comparable to the North Side of the City of Kamloops and has a family formation pattern similar to Brocklehurst. 94'r REFERENCES •1. Morse, J.J., Kamloops - the Inland Capital, A Publication of the Kamloops Museum Association for the Kamloops Centennial Committee, 195-°., p, 23. 2. ibid., p. 2 0. 3. British Columbia Bureau of Economics and Statistics, The Kamloops Region - An Economic Survey, Victoria, B.C., May 1961, p. 2. 4. ibid. , p . 2 . 5. Hi story of Kamloops, Article Published by the Industrial Development Department, City of Kamloops, p.5. 6. British Columbia Bureau of Economics and Statistics, op. cit., p. 3. 7. British Columbia Bureau of Economics and Statistics, op. cit., p. 4. -8. \"New C.N. Sidings Near Kamloops\", Journal of Commerce, June 1, 1970, p. n.a. 9. \"Airport plans get green light\", Kamloops Daily Sentinel, November 13, 1970, p. n.a. 10. Morse, J.J., op. cit. , p. 35. 11. Morse, J.J., op. cit., p. 36. CHAPTER V ANALYSIS OF DATA In order to achieve the objectives of the study, it was essential to formulate an analysis procedure which would recreate the market behaviour of raw land sales during the study period. It was originally decided to compile the data into comparable categories for the individual rays and then to aggregate the output for the three rays in an attempt to rationalize the general market behaviour of raw land values within the limits of the City of Kamloops. However, because of insufficient information it was subsequently decided to eliminate Ray Y from the total sample and resulting analysis. Therefore, the follow-ing discussion is an evaluation of the entire output for Rays X and W which was systematically listed by year by compiling the data collected from assessment cards and land registry titles. From the available data sources it was impossible to obtain a sales history, prior to development, for a sig-nificant number of the sample properties. This factor, com-96'r bined with the division of the total sample of 620 into a single category for each ray, made it impossible to further differentiate the.total amount of sales information into several additional sub - categories. There was, however, some additional differentiation required which was essential in order to be able to compare and evaluate sales charac-teristics. The first necessary compiling distinction was between acreage parcels (Property Type I) and subdivided lots (Property Type II). These two property types form the basis for deriving the price per unit for each vacant parcel, with the price for each lot computed, per one hundred square feet, from the recorded dimensions. Unfortunately, there are very few acreage sales recorded during the study period and those which are recorded contain less than six acres and are often comparable in area with large lots. This pheno-menon is primarily due to the subdivision pattern which has occurred in the study areas and makes it difficult to attempt to state and justify the market behaviour of acreage sales within the Kamloops region. As a result, following a brief discussion of the characteristics of the acreage trans-actions the emphasis will shift to an analysis of general subdivision practices and sales characteristics of sub-divided lots as a basis for formulating conclusions on speculation and the efficiency of land use in the study areas. As stated in Chapter III, an important determinant of 97'r potential use and, consequently, the expected value of raw land, subject to its future demand, is zoning. The existing predominant zoning use within the three sample areas is either R1 or R2, which permit only single family low density dwellings. By referring to early zoning maps it was apparent that residential zoning has existed in the study areas since zoning restrictions were initially introduced prior to development. It was therefore decided to divide both pro-perty types further into simply a residential or non-resi-dential classification to determine any effects of zoning on price. The final sub-group established for the individual rays was by enumeration districts. This additional classification provided two main advantages which'facilitated a more effect-ive analysis of the output. First, the enumeration districts are definable geographic areas whose boundaries intersect with the rays and consequently divide the length of the ray into smaller comparable districts which are progressively farther from the ray's point of origin. The second ad-vantage of using enumeration districts is that it is pos-sible to compare census data, compiled by enumeration districts, with the growth pattern of each district during the study period. In summary, the data was compiled for each sample unit according to its property type (acreage/square feet), zoning, and enumeration district for Rays X and W. Sales of acreage 98'r parcels are, however, evaluated only as an aggregate sample of the combined rays. The evaluation of the sales charac-teristics of vacant lots is performed separately for Ray X and Ray W under the two zoning classifications and enumeration districts. However, it will also be necessary to aggregate the results of the analysis of the individual rays into one evaluation in Chapter VII in order to present meaningful conclusions to the study. Finally, due to the non-existence of sales information prior to 1962, it was necessary to change the index year from 1949 to 1962 and to disregard the small number of previous sales. -Property Type I - Acreage There are thirty-eight individual acreage parcels in the total sample of 620 observations. However, there is no sales information available for the period after 1949 and prior to development for thirty-three of these properties. Of the remaining five properties, three sold twice pro-viding only eight sales as a basis for observing acreage sales characteristics. It would be both misleading and unrealistic to relate an aggregate total of eight sales, for the three sample rays, to the study objectives and then proceed to list con-clusions about sales transactions involving acreage pro-perties derived from this correlation.* In the succeeding section, it will be shown that the well-defined pattern and 99'r immediate proximity of adjoining subdivisions in the study area resulted in the formation of large vacant \"pockets\" of undeveloped lots in contrast to acreage parcels which would have provided a history of acreage sales since 1949. In addition, the assessment cards ^or Kamloops only provided the required information for undeveloped acreage after sub-division occurred and did not record the origin of a sub-divided lot. That is, the chronological sales history for each legal parcel in most cases begins in the year of sub-division. For the benefit of a future researcher considering the use of the study region to evaluate the market behaviour, with respect to acreage parcels, the author recommends certain definition and procedural changes to the original study. These changes primarily involve the limits of the selected rays and restructuring the method of data collect-ion. The first suggestion is to enlarge the defined study area by including the unorganized communities adjacent to the city limits. As illustrated in the preceding chapter, these communities are rapidly developing and still contain large unsubdivided areas. This increase in the size of the sample area would be accomplished by extending Ray X and Ray Y across Westsyde and Brocklehurst respectively. (For the purposes of this study, it was intended to ex-tend Ray Y into Brocklehurst but due to the time con-100'r straints this was not possible.) In contrast to Rays X and Y it would not be advisable to extend Ray W beyond the limits of Sa-hali as the line would simply traverse vacant unsub-divided forest land under government control. The extension of each ray would considerably increase the total cost of data collection as, in addition to the City's assessment cards, it would become necessary to also use the provincial assessment cards as a source of information. However, this additional expense would be valid considering the sub-stantial minimum cost of evaluating properties along a shorter ray which contributed so few acreage properties to the sample. • The second suggestion, which would benefit future analysis of acreage sales, involves the actual data collec-tion within both the existing or enlarged study area. Al-though it is unquestionable that without the existence of the Land Registry System and access to the assessment cards it would not have been financially feasible to commence this study, the total reliance on these documents as a source of information was not a satisfactory procedure. These two sources only adequately provided sales informa-tion for an acreage parcel during the period between sub-division and development. Usually when subdivision occurred a different legal identification was attached to the new lot and it was seldom possible to trace the pro-perty backward past the subdivision date on the assessment card. As an alternate trace, the Land Registry Title 101. number was used and from the document it was possible to determine the origin of the lot but the sales price of the acreage was seldom' disclosed. However, the titles did pro-vide an accurate record of the name, address and occupation of the registered owner, making it easily possible to trace the past owners. It was soon discovered that in the study areas there were a few large developers who sold the lots to either small builders or private individuals who then improved the property. It is necessary, therefore, to com-bine the use of the present data sources with the co-operation of these developers who could provide the required sales information which is not available on the assessment cards. This additional procedure would also increase the cost of information collection and require access to private informa-tion, but it would certainly increase the total number of acreage units in the total sample and consequently the value of the study with respect to the stated objectives. The author has preceded the analysis of the sales history of the five acreage parcels with suggested pro-cedural changes to emphasize the importance of these changes. Having completed outlining the suggestions it is desirable at this point in the discussion to briefly evaluate the characteristics of the eight recorded sales, without stating conclusions, to illustrate the evaluation procedures that would have been performed using a suitable sample. The five sample units are located in the three study areas as follows: 102. TABLE 6 Property Number Ray Area 1 X .93 Acres 2 X 39 Acres 3 Y 1.88 Acres 4 2.41 Acres 5 W 1.30 Acres Table I illustrates the fact that not only is the largest unit less than 2.5 acres but that two of the properties are comparable in size to large individual lots. The properties are located in Figure I according to the •'Property Number' in Table I. The objective of iden-tifying the parcels on a map is to relate the sale dates first to the subdivision date and secondly to the year when the services were installed by either the City (Ray X and Ray Y) or the eventual residential developer (Ray W). With a large sample of acreage parcels it would have been pos-sible to determine the holding periods and turnover rates of these properties by calculating the time period the land was held between sales and the total number of sales prior to development. Before concluding this section on 'acreage' each unit identified in Figure I is discussed separately to provide an idea of the information from which conclusions on specu-lation and general market behaviour would be formed for a larger acceptable sample. FIGURE V-I: LOCATION OF PROPERTY TYPE I - ACREAGE (Source: Analysis) Property #1: is situated in the Windsor Park subdivision (1963). The subdivision was sewered in 1966 at the same time as the street system was improved by the City. The property is not yet developed but is surrounded by improved lots. The property is held by a corporation who purchased it in September 1968 for $12,500 (RAY X) Property #2; is situated adjacent to Property #1 in the Windsor Park subdivision. This property is still vacant also and has only one recorded sale for $1,500 in 1966, the same year in which sewers were installed. (RAY X) Property #3: is situated at the corner of Fortune Drive and 6th Avenue, the main arteries providing accessibility from the study area to the City of Kamloops. The first recorded sale is in January 1961 for $6,300 to a private individual, but this property sold again in January 1962 to a second individual for $11,650. The significant increase is probably due to increased demand for the site due to its strategic location at the junction of the main traffic arteries and possibly its 'service commercial zoning' (C4). (RAY Y) 105. Property #4: is situated at the origin of Ray W in a sub-divided area at the base of the hill below Sa-hali. The vacant parcel was purchased in January 1958 for $7,000 by a private individual and sold to the C;ty in January 1965 for $18,000, remaining undeveloped, (RAY W) Property #5: is situated in the vacant area south of the main subdivided area of Sa-hali. This pro-perty has one recently recorded sale for $10,000 in July 1969. (RAY W) Finally, Table 2 lists the average sale prices per acre' for the sample parcels, during the study period. Since the study area is part of a rapidly expanding region, ex-periencing an increased demand for land, it is not surprising that the price of land has increased significantly. Unfor-tunately, without more sales it is impossible to attempt to determine what proportion of this per acre increase is due to the development process or the process of. economic and demographic growth, The following table does not intend to represent the change in the average price per acre for raw land in the City of Kamloops but merely provides the average obtained from the limited information. 106. TABLE 6 Year Average Sales Price Per Acre 1968 1962 1965 1958 1961 $2,904 3,351 6,196 7,468 14,220 In summary, although it is impossible to conclusively resolve the questions stated in Chapter II, re the case of vacant acreage, it is hoped that the preceding discussion will serve at least three useful purposes. The first pur-pose' is to point out the need for redefining the study area to include the Metropolitan region and secondly to encourage the inclusion of corporate developers in the data collection procedure. Finally, it is hoped that the brief description of the sales history for each property, related to location, will illustrate the information available from which to formulate conclusions. Property Type II - Subdivided Lots The information obtained for the second property type, lots in units of one hundred square feet, provides an ade-quate representative sample as a basis for formulating the sales patterns of subdivided lots since 1962. As mentioned in the last section it was impossible, due to time constraints, to extend Ray Y across Brocklehurst, and as a result Ray Y consists of only seventy-two properties. There fore, the conclusions to the study, with respect to sales characteristics of vacant lots, do not take into account either the market behaviour of lots on the Y axis, or sales prior to the index year (1962). The analysis will con-sider the data accumulated for Ray X and Ray W separately; however, preceding the examination of Ray X, the following three tables are presented to illustrate the breakdown of recorded sales of raw land aggregately by year in addition to providing cumulative turnover rates. TABLE 5 Total Number Average Total Number of Sales Turnover Turnover Ray of Properties (1962-1970) (Percent) (1962-1970) X 368 223 60.6% 6.73% w 180 , 97 53.9% 5.98% Total 548 320 Average 57.3% 6.36! 108. TABLE 4 Total Number of Sales by Year of Sale X ' W Sales Percent Sales Percent 1962 10 4.4% - -1963 2 .9% - -1964 2 .9% - -1965 41 18.4% 6 6.2% 1966 78 34.9% 6 6.2% 1967 42 18.9% 5 5.2% 1968 17 7.7% 22 22.6% 1969 18 8.1% 19 19.6% 1970 13 5.8% 39 40. 2% 223 100.0% 97 100.0% TABLE-5 Turnover of Lots by Year (1962 -1970) X W Aggregate Sample cx+vn Sales Percent Turnover of Sample X Sales Percent Turnover 'of Sample W Sales of Percent Turnover Total Sample 1962 10 2. 71% - - 10 1.82% 1963 2 .5% - - 2 . 36% 1964 2 . 5% - - 2 .36% 1965 41 11.14% 6 3,33% 47 8,57% 1966 78 21.2% 6 3. 33% 84 15,32% 1967 42 11.41% 5 2.78% 47 8,58% 1968 17 4.62% 22 12.22% 39 7.12% 1969 18 4.89% 19 10.55% 37 6.75% 1970 13 223 3. 53% 39 97 21.66% 52 320 9,48% o 110. Ray X (Enumeration District #74) As illustrated in Figure VII (Chapter IV) the urban area crossed by Ray X was subdivided in four separate stages, commencing in 1958 and progressing outward from the ray's origin point. The latest subdivision, Westmount, began development in 1966 succeeding the establishment of Riverdell (1958), Brentwood (1960) and Windsor Park (1963). As evidenced by Table 4 the sales activity along Ray X did not commence until 1962 and construction activity reached a peak four years later. Excluding Riverdell, the author believes this growth pattern is correlated to a significant degree with the installation of sewage disposal systems (Figure VIII, Chapter IV) by separate municipal by-laws and the construction of the Overlander Bridge in 1962. (Figure IX, Chapter IV). These two public conveniences combined with a diminishing supply of land suitable for residential development in South Kamloops provided the attraction necessary to cause prospective home owners to gravitate north across- the Thompson River beyond the then existing city limits. To facilitate the discussion, Ray X has been divided into four sections corresponding with the boundaries of each subdivision. Each subdivision contains the following number of legal parcels and sample properties: 111. TABLE 6 Subdivision Total Number Legal Properties of (Lots) Properties in Sample Percent Sampled Riverdell 120 100 83% Brentwood 103 89 88% Windsor Park 198 144 72% Westmount 155 35 23% 576 368 Riverdell 1958 (Sewage 1962) Of the total 120 legally defined parcels in Riverdell, 117 properties are residential lots whose average dimen-sions are 75' x 105', The three remaining properties are commercially zoned and border on the main traffic artery (Sixth Street), with the largest parcel (7.43 acres) listed as the only unimproved property in this portion of the sample. There are no recorded sales for the commercial properties and consequently all sales data relates to the residential lots. Riverdell was subdivided in 1958 by the Town of North Kamloops and from the data it was possible to obtain development dates for eighty-three lots in the subdivision sample containing one hundred properties. These lots were improved with houses primarily by private builders who developed the subdivision, by year, in five periods as follows: 'TABLE 7 Proportion of Total Number of Lots Developed Year of Development Lots Developed (Cumulative) pre 1958 1 1.2% 1958 (subdivision) 13 ) 16.8% 1959 22 ) 43.4% 1960 15 ) 61.4% 1961 15 ) 79.5% 1962 12 ) 93.9% 1963 2 96.4% 1964 1 9 7 V 6 % 1965 - 97.6% 1966 - 97.6% 1967 - 97.6% 1Q£Q residential 1) 0 1968 --,.,< 2 100% commercial 1) - l u u o The figures indicate that only one lot in the sample was improved prior to 1958 and by 1963 only three sample residential lots were vacant. Since a sewage disposal system was neither installed by the Town or required of the developer during the settlement period, it could be concluded that septic tanks were acceptable and that an existing sewage system was not an important criterion when a prospective buyer considered purchasing a vacant lot. From examination of the data on Brentwood it is quite evident that until 1965 Riverdell annexed the con-centration of new growth on the urban fringe of the City 113. of Kamloops even though Brentwood was subdivided in 1960. That is, Riverdell was almost entirely 'built-up' before the residential sector expanded to include the prematurely subdivided area to the north. As a result of this sub-division process few large pockets of vacant residential land remained within the expanding urban perimeter. Due to the rapid development in Riverdell, the derivation of a reliable table describing changing lot values is not plausible as few lots sold more than once prior to the construction of site improvements. The following table merely represents an unindexed trend in value per hundred square feet tabulated from sales for three available years for the purpose of comparison with Brentwood, Windsor Park and Westmount, TABLE 8 Year Price Per Unit (100 sq. ft.) 1962 27 1963 29 1964 33 Brentwood 1960 (Sewage 1962) The second subdivision, moving outward from the origin of Ray X, contains 103 properties with the sample representing 89% of these subdivided residential lots. By comparing the subdivision and sewage installation date with the most active construction years, there is a 114. definite time lapse between these dates as illustrated in Table 9. Year of Development 1960 (subdivision) pre 1965 1965 1966 1967 Not Developed -TABLE 9 Total Number of Lots Developed Proportion of Lots Developed (Cumulative) 4 1.4 49 17 2 86 20.9% 77.9% 97. 7% 100.9% The preceding table indicates that an excess of serviced building lots were placed on the residential land market by the Town of North Kamloops, which authorized the subdivision plan for Brentwood in 1960. At this time the demand for residential lots was being adequately met by the existing supply. Otherwise, the price per lot would have increased substantially in Riverdell and prior to 1965 purchasers would have traded closer proximity to the City ' for a less expensive building site in Brentwood. This example of an over supply of serviced lots illustrates the repeated premature conversion of agricultural land to a dormant residential use on the urban fringes of the majority of cities. In contrast, by using the powers within Section 702 (2) of the Municipal Act of British Columbia, the Town of North Kamloops could have prevented this costly situation through a prohibitive zoning by-law. In the long run, the Town's attempt to attract growth and expand the tax base in actuality increased the cost of providing services to the scattered population. In addition, the installed utilities were utilized to only a proportion of their potential capacity until the excess building sites were required, commencing in 1966. From Table 9 it is also evident that in 1966, one year after major construction began in Brentwood, forty-nine of the total eighty-nine (55%) sampled sites were improved, By 1967, three years after construction com-menced, this figure had increased to ninety percent. Also, the forty-nine units constructed in 1966 represent twenty-five percent of the total number of units construc-ted in North Kamloops in that year. The author believes this fact illustrates that if the 'municipal mind' would plan its expansion in co-ordination with forecasted de-mand, by using existing municipal legislation rather than attempting to annex growth by making concessions to developers, such as only requiring funds to gravel roads in Brentwood, much of the criticism levelled against speculators would disappear. The changing site value for available properties in Brentwood is given in Table 10. Thirteen properties in the Brentwood sample sold twice prior to development and the-ir value per one hundred square feet is as follows; 116, TABLE 10 Price Per 100 Square Feet (Dollars) Property 1 1965 8/65 $26 11/65 $35 1966 1967 10/65 $37 8 12/65 $37 9 ( 10/65 $33 ( 10 ( 10/65 $33 ( 11 ( 10/65 $33 ( 12 ( 10/65 $33 ( 13 ( 10/65 $33 7/66 $45 11/66 $52 10/66 $48 7/66 $45 5/66 $48 Year Improved 1966 2 11/66 $45 1/67 $44 1966 3 3/66 $36 4/67 $53 1967 4 3/66 $40 2/67 $58 1967 5 ( 3/66 ( 4/66 $32 $32 Vacant 6 4/66 $74 2/67 $45 1967 7 11/65 $15 3/66 $32 1966 1966 1966 1967 1966 1966 1966 The definition of speculation earlier cited in Chapter II was the holding of land resources in their present uses - and often in lower uses than those justified by the prevailing market conditions - while awaiting an expected increase in property sales values. In this regard it is significant that although there was a time lag of almost five years between subdivision and major development, except for one lot (#5), when the properties 'Were demanded by- the market, the maximum holding period between the last two 117. sales prior to improvement was less than thirteen months. By examining the 'owner types' of the subject properties it was found that seven of the lots were held by companies and that they were then sold to building contractors while five of the remaining lots were held by individuals. The author would submit that although substantial profits are recorded over short periods of time both by individual and corporate owners the definition of speculation is not supported in this case as it was previously shown there was little demand for the lots be tween 1962 and 1966. Therefore, in order to account for the profits it is more applicable to restate Ratcliff's statement that due to the nature of the real estate market \"it is characteristic that the seller is inexperienced and unfamiliar ... with market prices\" ... in addition to the purchaser. In conclusion, the sale prices for the lots are reacting in this case in a manner typical of the activity in a commodity market involving both risk and the opportunity for profit, however premature subdivision supported by municipal authorities not exer-cising subdivision controls certainly provides the time period for speculative activity to occur before the raw land market reacts. Windsor Park 1963 ( S e w a g e 1966) The development history of Windsor Park is in some respects similar to Brentwood's. There was a definite time lag but its duration until major construction was 132. approximately two and one-half years in comparison to Brentwood's five year period. It is believed that the same reasons as given for Brentwood's growth pattern are applicable to Windsor Park. This subdivision contains 198 lots represented by a sample of 140 residential lots and four lots zoned for commercial use. As previously, all sales data relates solely to residential lots in the sample. The following tables, together with brief supporting comments are presented primarily for comparison with pre-ceding tables. TABLE 11 Total Number of Lots Developed Year of Development 1963 (subdivision) pre 1965 12 1965 10 1966 24 1967 28 1968 15 1969 12 1970 9 Vacant 24 Proportion of Lots Developed (Cumulative) 8.5% 32 .8% 69.2% 77.1% 100.0% Table 11 contrasts with Table 9 in two significant respects. First, construction actually shows a more gradual increase and decline than is exhibited by Riverdell and 119. Brentwood's growth pattern. The second difference is that a large group of vacant properties are still available for development; however, this is probably because Ray X is approaching the existing urban fringe area. Table 12 illustrates the changing site values for the six parcels in the subdivision for which sales information was available. TABLE 12 Price Per 100 Square Feet (Dollars) Year Property 1966 , 1967 1968 1969 1970 Developed 1 2/69 $57 3/70 $60 1970 •2 2/69 $57 5/70 $60 1970 3 10/67 $53 9/68 $53 1970 4 1969 5 1/66 $37 6/67 $40 1968 6 1/66 $32 6/67 $35 1967 The preceding figures indicate more stable market prices over the five year span. Possibly related to this is the fact that five of sales involved professional owners in the form of real estate agents or builders. The maxi-mum holding period is eighteen months; however, it is unlikely that lots were held vacant while a speculator waited for his opportune moment of development as there was an existing excess of building lots during this period. Westmount 1966 (Sewage 1966) The last subdivision which Ray X traverses is Westmount which was both subdivided and sewered in 1966. It should be pointed out that although Ray X terminates at the C.N.R. tracks, Westmount extends further north to the City limits where it joins the community of Westsyde As a result, the sample consists of only 35 parcels from which the following sales characteristics have been determined. The development pattern in Westmount exhibits more similarities to earlier growth in Riverdell than in the intermediary two subdivisions. With the sewers already installed, eliminating the possibility of tearing up the roads, significant construction commenced in 1967 as com pared to succeeding years. TABLE 13 Year of Development L Proportion of Total Number of Lots Developed ots Developed (Cumulative) pre 1966 (subdivision) 6 1966 3 1967 15 1968 4 1969 2 1970 Vacant 121. One wholly unexplainable fact related to Table 13 is that the sample does not contain a property which was developed in 1970 or a vacant lot. It is suggested that this factor is partially correlated with the attraction of an existing sewage disposal system. It is also important to note the change in the price of lots especially for three parcels which were purchased by a professional developer in this sewered area and sub-sequently sold at a substantial loss. It is possible that this is merely an isolated instance where a 'speculator' happened to lose over $3,000 per lot within one year but the example is presented to illustrate the realistic risks of speculative activity. It is believed that the same company held properties 1-6 and 8-11 and each of these lots were sold to private individuals who improved the sites. In addition, the holding period is less than two years and there is no evidence that owners held lots off the market when there was an excess supply of lots in existence. TABLE 14 Price Per 100 Square Feet (Dollars) Property 1966 1967 Year 1968 1970 Developed 1 6/66 $100 9/66 $ 46 1967 4 5 2 3 6/66 $ 50 4/67 $46 6/66 $100 1/67 $46 6/66 $100 6/67 $46 6/66 $ 49 9/67 $45 1967 1967 1967 1967 Property 1966 1967 Year 1968 1970 Developed 6 6/66 $38 7/67 $37 1967 7 7/70 $45 Vacant 12/70 $55 8 6/67 $26 9/67 $29 1969 9 6/67 $36 5/68 $46 6/67 $36 8/68 $47 6/67 $21 11/68. $29 1968 10 1968 11 1968 The preceding concludes the evaluation of the property sales contained in the largest sample of the study which was selected randomly by the extension of Ray X from Fortune Drive and 6th Street north to the C.N.R. tracks. It is hoped that by dividing the discussion into sections and relating each section to the subdivision process, the ob-jective of describing the determinants of the historical growth pattern with regard to vacant lots has been achieved. Conclusions pertaining to this section (Ray X), and the entire sample are stated in Chapter VII. Ray W - Sa-hali The study area known as Sa-hali, situated in the south-western sector of the City of Kamloops, is presently com-posed of approximately eleven commercial properties and two hundred and fifty residential lots. The sample contains the eleven commercial properties and 169 lots representing 72% of the total number of existing residentially zoned properties. 137. As illustrated in Appendix B , Sa-hali has been developed to date in nine distinct sections which are extremely ir-regular in shape. This irregularity is due mainly to the topography of the area which is steep sloping on the north with a more gradual incline on the southern boundary. The 'bank' format ion on the north has provided a large number of view lots overlooking the City of Kamloops and the North Thompson River Valley. The growth pattern has systematically progressed eastward along the brow of the hill, commencing at the Trans Canada Highway, which has provided the sole access to the area. Appendix B illustrates the position and importance of the Trans Canada Highway as an access route to Sa-hali. It also shows the route of the partially com-pleted Trans Canada Highway By-pass situated south of Kamloops. This new road system will undoubtedly provide an impetus to development of the presently vacant land to the south of the existing subdivided area, providing additional access to the City of Kamloops. Due to the irregular pattern of subdivision, it is impossible to divide the sample area into sections as was done for Ray X. Consequently, the discussion and Tables are representative of the development of the. complete sample selected by extending Ray W in a south-western direction across the centre of Sa-hali.' It should be emphasized that topography and access to a main traffic artery (Trans Canada Highway) are the two main criteria which have dicta-ted the past subdivision pattern in Sa-hali. In addition, 124. the City's subdivision by-law, as outlined in the next para-graph, has decidedly affected the growth pattern. As stated in Chapter IV, the developer must install all roads and utilities in Sa-hali with the City only respon-sible tor the provision of sidewalks and street lighting. These development regulations are a form of control which was not used in any of the four subdivisions comprising Ray X. In addition to decreasing the City's initial capital costs, these regulations have to a significant degree limited the excess supply of residential lots as a developer attempt-ing to recover his expenses plus a 'developer's profit', while minimizing carrying costs, will not service unsaleable lots if there is no immediate demand for these properties. The reader could probably cite examples where excess serviced lots have been created; however, it should be pointed out that the Kamloops region represents a relatively small land market in comparison to larger Metropolitan areas where the author believes the majority of these cited samples occur. That is, it is relatively easy to correlate demographic and economic growth to expected family formation in Kamloops, and forecast a demand for serviced lots. It is suggested that if the Town of North Kamloops had used stringent sub-division regulations it could have remained separate from the City of Kamloops rather than being forced into amal-gamation mainly because of financial difficulties due to the requirements of servicing a 'sprawled' area. 125. The first construction in Sa-hali occurred in the eleven commercial properties bordering the Trans Canada Highway in 1962 at the western entrance to the City of Kamloops. It is significant that this is the year in which the Roger's Pass section of the Trans Canada High-way was completed and that the majority of the sites are motels. It is unfortunate that no sales information per-taining to these sites prior to development is available, nor is there recent information which might illustrate the affects, if any, of the Trans Canada Highway By-pass on these properties. The residential sites to the east began development in area surrounding the school in 1965. In 1966 construction declined but it increased again in 1967. Sa-hali is still experiencing the fastest growth rate with in the City limits on the South Shore and will continue to expand south towards the new highway. General-ly the lots are above average price in comparison to the Kamloops region; however, they are completely serviced and most afford an excellent view. 126. TABLE 15 Total Number of Year of Development Lots Developed Proportion of Lots Developed (Cumulative) 1965 13 11.4% 1966 6 16.7% 1967 11 26.3% 1968 22 45.6% 1969 19 62.3% 1970 20 79.8% Vacant - (Sold 1970) 23 100.0 In the entire sample of 180 units, there are only four residential lots which sold more than once as raw land. This conclusively illustrates the effect of sub-division controls in that the serviced sites were improved and immediately sold and improved according to market demand, eliminating any speculative activity in excess lots. Howeyer, there exists 38 units which are listed as un-developed, but 35 of these properties were subdivided in 1970 and 1971 and more recent sales data would probably provide the improved sale price of these parcels. Following a discussion of the various available methods of land use controls in Chapter VI, the final chapter pre-sents conclusions, based on the preceding analysis, as well as their respective relationship to the discussion contained in Chapter II and Chapter VI. CHAPTER VI LAND USE CONTROL Introduction The entire subject of land speculation and the de-termination of land values must ultimately be considered on a macro scale and from an objective stance. In es-sence, it is a question of land-use control. For as Bryant states, if it be accepted \"... that the operation of the normal market processes is the proper determinant of the proper use of land, and that individual proprietors have unrestricted right to develop their land in accordance with their personal calculation of profit, then any at-tempt to curb speculation, and control prices of land be-comes next to impossible.\"1 This chapter examines the con-cept of land-use control under the following headings: 1. The public interest in land resources; 2. North American system of land tenure; 3. The case for public intervention; 4. Methods of controlling land-use. 128. With respect to this last category, the options avail-, able for land-use control range from a system of \"laissez-faire\" at one extreme, to the public ownership of land at the other extreme. Between these two systems lies a range of controls allowing for various degrees of public inter-vention, and designed to improve, not replace, the private sector. The following items will be examined in this connection; legal controls (zoning and subdivision control), fiscal measures (taxation), and the public ownership of land, including the concept of \"land banking\". \"Land II: The Strange Case of the City\", Architectural Forum, Vol. 106, No. 3, March 1957, pp. 134-136, 246-2T8. Harvey, Robert 0. and W.A.V. Clark, \"The Nature and Eco-nomics of Urban Sprawl\", Land Economics, Vol. 41, No. 1, February 1965 , pp.T^iT: Head, Ivan, \"The Torrens System in Alberta\", The Canadian Bar Review, Vol. 35, 1957, pp. 1-37. Heneberry, William H., \"Taxes Affect Land Use in Urban-Fringe Areas\", Journal of Soil and Water Conserva-tion, May-June, 1962, pp. 107-110. ~ House and Home, \"Rx to Cut Land Prices: Assess Vacant Land By The Rules\", Vol. 20, No. 2, August 1961, p. 78. Levin, E.A., \"Zoning in Canada -- Are We Moving Toward A Development Permit System?\", The Community Planning Review, Vol. 7, No. 2, June 1957, pp. 85-90. Journal of Commerce, \"New C.N. Sidings Near Kamloops, June 1, 1970, pps N.A. Jordan, Fred, \"Land Speculation in the Public Interest\", City, Vol. 5, No. 1, Jan./Feb. 1971, pp. 85-86. Lean, William, \"Town Planning and Economics\", Journal of the Town Planning Institute, Vol. 52, No. 2/ February 1966, pp. 45-48. Kamloops Daily Sentinel, \"Airport Plans get Green Light\" November 13, 1970. ' List, Wilfred, \"Nationalization of Land Urged to end Speculation\", Toronto Globe and Mail, November 6, 1967. Lovelace, Eldridge, \"North Vancouver -- Being an Extreme Example of Excess Land Subdivision\", Landscape Architecture, Vol. 40, No. 1, October 1948, pp. 69-71. McCandlish, Jim, \"Public Ownership of City Core Proposed\", Vancouver Sun. June 10, 1971, p. 19. Mandelker Daniel R., \"Controlling Land Values in Areas of Rapid Urban Expansion\", UCLA Law Review, Vol. 12, No. 3, March 1965, pp. 734-761. Martin A.L., \"Land Development in Calgary\", Habitat, Vol. No. 3, May-June 1954, pp. 14-23. Miller, Frank, \"Land -- Its Potential\", The Appraisal Journal, Vol. 38, No. 2, April 1970, p. 240-252. Milliman, J.W., \"Can People Be Trusted With Natural Re sources?\", Land Economics. Vol. 38, No. 3, August 1962 , pp. 199-218. . ' Mills, E.F., \"Land Values in the United Kingdom Since 1946\" International Social Science Journal, Vol. 18, No. 4, 196b, p. 513-126\" — ' Milner, J.B., \"An Introduction to Subdivision Control Legislation\", The Canadian Bar Review, Vol. 43, March 1965 , pp. 49-98. Mohring, Herbert, \"Land Values and the Measurement of Highway Benefits, Journal of Political Economy, Vol. 69, No. 3, June 1961, pp. 236-249. Munby, D.L., \"Development Charges and the Compensation-Betterment Problem\", The Economic Journal, Vol. 64 No. 253, March 1954, pp. 87-97. — Muth, Richard F., \"Economic Change and Rural-Urban Land Conversions\", Econometrica, Vol. 39, No. 1, January 1961, pp~^ 1-23. -Province, The, \"Land Assembly Proposed\", February 10, 1970 ' p. 7. , \"Architect Erickson raps the 'anti-city'\", May 28, 1971, p. 26. Rancich, Michael T., \"Land Value Changes in an Area Under-• going Urbanization\", Land Economics, Vol. 46, No. 1 February 1970 , pp. SZ^TT. ' Richardson, Nigel H., \"Can We Stop the Spread?\", The -Community Planning Review, Vol. 11, No. 2, DTIne 1961 p. 7-14. Ricks, R. Bruce, and J. Fred Watson, \"Land As a Growth Investment\", Financial Analysists Journal, Vol. 22 No. 4, July/August 1966, pp. 69-78^ ~~ ' Rowlson, John F., \"Zoning vs. Alternate Value\", The Appraisal Journal, Vol. 31, October 1963, pp. 513-517 Sibert, E.G., \"Town Planning and Land Values\", Journal of the Town Planning Institute, Vol. 23, N o . T ; January 1952, pp. 59-62. Slater, David W. , \"The Political Economy of Urban Changes in Canada\",- Queen's Quarterly, Vol. 67, No. 4, Winter 1961, pp. 586-604. Spengler, Edwin H., \"American and English Comment on the Uthwatt Report\", The Committee on Urban Land Policies Journal of the American Institute of Planners, Vol. 8 October 1942, pp. 16-20. ~ Suggitt, Frank W., \"Land Use Changes Linked to Highways\", - Journal of Soil and Water Conservation, Vol. ll', No. 6, November 1956, pp. 284-288. Swierenga, Robert P., \"Land Speculator 'Profits' Recon-sidered: Central Iowa as a Test Case\", The Journal of Economic History, Vol. 26, No. 1, March 1966, pp. 1-28. Toronto Globe and Mail, The, \"Land Commission Planned to \" Prevent Land Speculation in the U.K.\", September 23, 1965. Town and Country Planning Association, \"A Statement by the Executive Committee of the TCPA on the White Paper of March 1964\", Town and Country Planning, Vol. 32, 1964, pp. 341, 346-347. Turvey, Ralph, \"What is the Case for Planning?\", Journal of the Town Planning Institute, September/October 1955, pp. 269-271. ~ , \"Development Charges and the Compensation -Bett erment Problem — A Rejoinder\",'The Economic Journal, Vol. 54, No. 2, June 1954, pp. 358-360. , \"Development Charges and the Compensation-Betterment Problem\", The Economic Journal, Vol. 53, No. 2, June 1953, pp. 299-317. Vancouver Sun, The, • \"Stop Land Speculators Shelford Urges Government\", February 10, 1965, p. n.a. ' , \"Land use formula for conflicts\", May 8, 1965, p. 7. , \"Nationalize All Farm Land\", August 8, 1968, p. 6. • \"'An acre on the fringes' will be 980»s city living\", October 19, 1970, p. 32. > '\"Land speculation is helping to eep prices in the city-up'\", September 4, 1971, Victoria Times, The, \"Nationalize the land\", January\" 13, 1965, p. 4. Weaver, Robert C., \"National Land Policies -- Historic and Present:, UCLA Law Review. Vol. 12, No. 3, March 1965, pp. •/19-733. Weiss, Shirley F. and Thomas G. Donnelly, and Edward J. Kaiser, \"Land Value and Land Development Influence Factors: An Analytical Approach for Examining Policy Alternatives\", Land Economics, Vol. 42, No. 3 August 1966, pp. 230-231T-Wendt, Paul F., \"Theory of Urban Land Values\", Land Economics, Vol. 33, No. 3, August 1957 , pp~J28-240. . \"Urban Land Value Trends\", The Appraisal Journal, Vol. 26, No. 2, April 1958, pp. 254-269. , \"Economic Growth and Urban Land Values\", The Appraisal Journal, Vol. 26, No. 3, July 1958, pp. 230-245. Wenzlick, Roy, \"Rx to Cut Land Prices: Assess Vacant Land by the Rules\", House and Home, Vol. 20, No. 2, August 1961, p.Tin Williams, Norman, Jr., \"Planning Law and Democratic Living' Law and Contemporary Problems, Vol. 20, No. 2, Spring 1955, pp. 317-350. Winnick, Louis, \"Economic Questions in Urban Redevelopment' American Economic Review Papers and Proceedings, Vol. 51, No. 2, May 1961, pp. 290-304. Yale Law Journal, \"Public Land Ownership\", Vol. 52, 1943 ~~ pp. 634-655. ' Yearwood, Richard M., \"Land Speculation and Development 'American Attitudes\", Plan, The Journal of the Town Planning Institute of Canada, Vol. 9, No, 1, March 1968, pp. 15-23. UNPUBLISHED SOURCES Bryant R.W.G., \"Land Speculation -- Draft Paper\", Institute d'Urbanisme, Universite de Montreal, February 1964. City of Kamloops Planning Department, Construction Statistics 1951-1970. 1971. Game, Richard G A Summary of Land Use. Thompson Valley Regional Planning Board, 1968. Hamilton, Stanley W., Price Movements in Undeveloped Land Facing Urbanization: A Micro Study, unpublished PhD, ihesis in Business Administration, Graduate Division, University of California, Berkley. Hartley James E., The Relation of Taxation to Services as a 1 echnique to Prevent the Premature Conversions?— Farmland, unpublished M.Sc. Thesis, Department of Community and Regional Planning, University of British Columbia, April 1963. Leigh, Clive M., Real Property Tax Assessments: An Exami-nation of the Consequences of a Departure from the Specified Basis of Assessment, unpublished MBA Thft«Hg in Urban LandEconomics, Faculty of Commerce, Univer-sity of British Columbia, September 1967. Miller, Donna, Residential Location and Expansion, Kamloops, British Columbia 1950-1966, Department of Geography, The University of British Columbia, 1969 OTHER SOURCES Backmeyer, A., City Planner, City of Kamloops, personal interview, April 19, 1971. Game, Richard G., Director of Planning, Thompson Valley Regional Planning Board, Valleyview, British Columbia personal interview, February 15 and April 20, 1971. ' Headon, William, Chief Assessor, City of Kamloops, personal interview, February 14-16 and April 19-20, 197T; McGregor, N., Chief City Engineer, Department of Public Works, City of Kamloops, personal interview April 19, 1971. ' McNaughton, , City Engineer, Department of Public Works, personal interview, April 19, 1971. Vernon, Ross, Engineer, Department of Public Works, personal interview, February 14, 1971. DATA COLLECTION CODING SHEET X.D, 1. Legal Descrip tion D.L. BLOCK LOT PLAN 2. Census Tract Enumeration District 3. Zoning: year Class year Class year . Class year Class 4. Lot Size or Acreage: 5. If Developed, Date: _ m o n t h / y e a r 6. Services Provided: month/year 7. Travel Time to CBD (V) _ _ _ _ _ _ CBD (S) School Shopping Centre_ 8. Date of Document Type of Type of Sale Price Mortag Sale Number Trans- Owner ($ Land) Data action "@en ; edm:hasType "Thesis/Dissertation"@en ; edm:isShownAt "10.14288/1.0102450"@en ; dcterms:language "eng"@en ; ns0:degreeDiscipline "Business Administration - Urban Land Economics"@en ; edm:provider "Vancouver : University of British Columbia Library"@en ; dcterms:publisher "University of British Columbia"@en ; dcterms:rights "For non-commercial purposes only, such as research, private study and education. Additional conditions apply, see Terms of Use https://open.library.ubc.ca/terms_of_use."@en ; ns0:scholarLevel "Graduate"@en ; dcterms:title "Land use, price changes and speculation on the urban fringe : an intertemporal case study in the Kamloops area, B.C."@en ; dcterms:type "Text"@en ; ns0:identifierURI "http://hdl.handle.net/2429/41923"@en .