Too Hot, Too Cold, Just Right: The tale of the three bears city and achieving balanced urban development

Vice President , The Regional Group of Companies Inc
  • Jan. 22, 2014

john clarkI always find Vancouver to be an interesting study in contrast and contradictions.

The city boasts about how it has substantially reduced major street traffic since 2006, despite a growing population. The TomTom Traffic Index recognizes the city for having the worst traffic congestion in North America. Statistics Canada reports that most commuters would still rather take to their cars than public transit, because they can get to where they need to be much faster.

Nonetheless, I consider Vancouver to have a quite attractive and liveable urban core, and be a great example of a city that continues to move in the right direction, in terms of having a balanced intensification strategy.

What do I mean by “balanced?”

I’ve written before about the need for the 21st century city to evolve as a series of self-sufficient villages, where people can live, work, and play within the same community. It’s an old idea from the last century that “there is a job at the end of every street.”

The drive to urban living

Vancouver has long been known for tackling its gridlock woes through this sort of urban development strategy. The push for urban densification has accelerated in recent years thanks to the lifestyle habits of the post-boomer generations, as well as the changing needs of aging boomers looking to live closer to amenities and healthcare services.

For the simple reason that there is a finite amount of urban core land, population growth in the ‘burbs continues to outpace that of Canada’s major urban centres, but this gap is at its narrowest in Vancouver, as the city takes part in Canada’s condo boom, according to a study published last September by the School of Urban and Regional Planning at Queen’s University. In fact, a report last fall from Royal LePage found that condos have come to account for as much as 80 per cent of Vancouver’s total housing sales, thanks to millennials, immigrants, and baby boomers, and it argued that this trend is sustainable.

But a walkable, liveable city must have balanced development – people need places to work, shop, and entertain themselves within a reasonable walking distance of where they live.

So I was encouraged last week when I read about the commercial building boom that has now taken hold in Vancouver’s urban core. The Vancouver Sun reported how, until recently, Vancouver’s civic leaders were forecasting a critical shortage of office space by 2031. The city already has a tight vacancy rate for class A space – 5.3 per cent. But over the past four years, the city has enacted new land-use policies to encourage a return to commercial development.

A more active and fit lifestyle

I have been to several U.S. cities, most notably, New York, and observed that the general population tends to look healthier and remarkably thinner in more dense urban cores. Take Manhattan, for example. Lots of people walk. It’s efficient, and it’s no big deal for residents to walk eight blocks for work or leisure activities. The area has evolved so that work, home, and amenities are all close together. It’s a model that warrants study.

But, again, that’s not to suggest that the cure to our urban woes is colonnades of massive towers. Redevelopment and intensification must respect the character and nature of an existing neighbourhood. This is a big issue in Ottawa right now, as various developers eye older parts of central Ottawa, such as the “Little Italy” area around Preston Street.

While a 25-storey condo tower may not fit into the look and feel of this neighbourhood, there is certainly an economic case to be made for the benefits that come of intensification. According to a story published last fall in the BOMA Ottawa Commercial Space Directory, this area of Ottawa contains 12 per cent of the city’s retail, but only eight per cent of the city’s population. Local retailers depend on traffic from outside the area to survive.

It’s just good economics

Consider a restaurant. For a healthy bottom line, a restaurant probably should not pay more than six per cent of its sales to base rent. If rent is $25 per square foot, the restaurant will need annual sales of $400 per square foot to be viable.

Intensification can make a big difference in terms of business viability for the restaurant.  If that lot down the street that once held five residences, now contains an attractive low-rise condo development with 50 units, there are 10 times as many potential customers within an easy walk. Or, to put it another way, retail sales of a typical household can support about 20 to 30 square feet of retail space, so 50 new households will be able to support over 1,000 square feet of new retail business, or make those that already exist in the neighbourhood more viable.

With the development of Ottawa’s new LRT system, there is a huge opportunity to develop adjacent to the new stations, with a combination of retail, residential, and office space. People who don’t have to waste hours a day commuting have more leisure time at their disposal to patronize local businesses. Such intensification also fosters a dynamic and vibrant multi-ethnic community.

It’s in the municipality’s best interests to enact land-use policies with the long-term, strategic vision to ensure development occurs in this balanced manner. It’s a win-win for city coffers. Critical infrastructure — roads, sewer, water, and electricity – is already present in city centres. For a minimal cost, the city has generated new utilities and tax revenue.

There will always be those people who remain stubbornly opposed to development. Despite this NIMBY factor, very few people, if asked, will agree that any and all development should be stopped cold. So how can we ensure that development, redevelopment, and intensification of the urban core takes place in a reasonable and balanced manner?

I want to hear what you think. How do you define “balanced urban development?” Have you see any other good examples? What do you think of my idea of a “job at the end of every street?”

To discuss this or any other valuation topic in the context of your residential or commercial property, please contact me at jclark@regionalgroup.com. I am also interested in your feedback and suggestions for future articles.


John Clark is Vice President with The Regional Group of Companies Inc. He has more than 33 years of experience in the real estate appraisal field, is a fully accredited…

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John Clark is Vice President with The Regional Group of Companies Inc. He has more than 33 years of experience in the real estate appraisal field, is a fully accredited…

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