Industrial Land Reserve proposed to resolve B.C. land shortage

The growing competition for industrial land as it turns over for higher valued uses such as commercial, retail, and residential has again brought forward a call for B.C. to create an Industrial Land Reserve.
“There is a need for it,” said Tom Corsie, vice-president of real estate, Port Metro Vancouver (PMV), speaking on a panel of industrial land use at the Vancouver Real Estate forum.
The PMV has been a strong advocate of creating an Industrial Land Reserve to preserve land from speculators who would seek rezoning for alternate uses. The forum heard that a lack of industrial land in the Lower Mainland is reaching acute shortage and will have far-reaching economic impact in the Lower Mainland as import and export businesses need warehouse and shipping access to ports.
PMV’s future planning estimates that approximately 2,500 hectares of industrial property will be required over the next two decades to facilitate port container volume growth. However, statistics show that during the past three decades 3,000 hectares of industrial land has been lost in the Lower Mainland area.
Currently, the region’s planning board has imposed restrictions on rezoning industrial land but can exempt it with a board vote.
Lower Mainland population swelling
The squeeze in B.C.’s Lower Mainland for industrial land, especially larger sites, is being pushed by a growing population in the Lower Mainland but also increased traffic through the port as trade with Pacific Rim countries increase. The Avison Young survey of building inventory availability in 13 Lower Mainland cities and municipalities dwindle from 4.5% in spring 2011 to 4.2% a year later.
The Planning Institute of B.C. estimates there is only 2,670.9 hectares remaining in of industrial land remaining in the Lower Mainland from a total of 11,412.1 hectares. “Most of that is smaller infill sites and will not support the type of development that is needed,” said Stu Morrison, senior vice-president SIOR for Colliers International.
The major holders of industrial land in the Lower Mainland today are First Nations groups and the PMV, with the port purchasing farm land and older forest industry sites that it is redeveloping with warehouses.
The proposed plan would be similar to that of the Agricultural Land Reserve (ALR).
But the tight land supply has focused criticism on the ALR, established to preserve B.C.’s growing area, but also continues lower grade of farmland.
Land use sparks public outcry
The port recently purchased 32.37 hectares of farm land in Richmond sparking a local outcry in February and the region’s planning committee sent a letter to Canada’s transportation minister asking the land not be used for industrial development.
The port responded saying it is holding the property for long-term as an emergency site if needed. But, as an Avison Young report suggests, there is little chance the Agricultural Land Commission, a provincial entity, will allow land to be eroded if the NDP win power in the May 2013 election.
Corsie said there is a “disconnect” between the levels of government with the federal government charged with providing port facilities and access while provincial governments are often concerned with developments that hinge upon port access and facilities.
That disconnect doesn’t stop there as municipalities garner higher tax revenues from lands rezoned from industrial to other uses.
The result has been industrial developers are looking at other opportunities that range from densification of existing sites to utilizing First Nations sites that close to port or rail transport. First Nations lands, located in areas from Vancouver to areas such as Maple Ridge in the Fraser Valley, have at least six bands holding large tracts that can be developed.

Image of DeltaPort from the Shipping News
Tsawwassen helps with supply issue
Corsie said it has been able to augment supply by entering into an agreement with the Tsawwassen First Nations (TFN) to develop 121.4 hectares “right at the foot of Deltaport”, the port’s largest container terminal. It is favoured by truckers as it negates the need to move through congested areas to reach central city port areas.
As well, Brunswick Property Holdings Ltd. is developing 700 acres owned by the PMV to be used for a mixture of importers, facilitating warehouse capacity near ports to minimize trucking.
Ron Emerson, president of the Emerson Real Estate Group, said that absorption of industrial land continues to outpace supply. Pent-up demand is expected overtake the Deltaport developments “in less than five years” and unless the Metro Vancouver finds way to free up more land “we have a real crisis on our hands” as export industries shift – along with jobs – to other areas. (Target recently located its warehouse to Alberta after failing to find the space needed in the Lower Mainland).
However, there is nothing to indicate that pressure on the land supply in the Lower Mainland will do anything but continue to increase. There is continued competition for land development.
A closing roundtable at the forum on the Vancouver market looking 12-24 months downstream, saw real estate experts bullish on the Vancouver market, with housing going through a correction but rebounding. Panelists agreed that land prices were not going go down and the developers with foresight were land banking available tracts of land to ensure they had product in the pipeline for the future residential, commercial and retail development.
Immigration swallows up land
“B.C. is still the most desirable province in the country for immigration, especially with the Asian population.” said Brian McCauley, president of Concert Properties Ltd. McCauley said that kind of interest from investors would keep prices high.
Ward McAllister, president and CEO of Ledingham McAllister Ltd., said he remains “cautiously optimistic” and investment would continue in land acquisitions for redevelopment, but toward “transit oriented areas”.
Remco Daal, president and COO, Canada for Bentall Kennedy agreed demand would remain strong, especially in core areas near transit.
McCauley said that new projects coming on stream had to be well positioned in the market and in good location. Larger projects also carried some risk. “Smaller is better right now,” he said.

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