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"The basis for property tax assessments has gone from what is physically there today to what a planner has decided they want the skyline to look like," says Scott Bowden, head of appraisal and property tax for Canada. COLLIERS
Vancouver’s Broadway plan is a 30-year blueprint for developing and increasing density on 500 city blocks served by the Broadway Subway line. But the development will have a major influence on property valuations and taxes both along the corridor and across the city.
We spoke with Scott Bowden, head of appraisal and property tax for Canada with leading commercial real estate company Colliers, about the questions that developers and property owners are asking today.
The Broadway Plan was approved this summer by Vancouver City Council. What effect has the announcement already had on the area?
The Broadway Plan has announced an intention to significantly increase density in the area. Even though it has not yet produced or built anything tangible, the plan has already created an immediate and dramatic increase in how the affected property is valued.
What are some of the stories you’re hearing from clients who own property inside the Broadway Plan redevelopment zone?
Some people feel as though they’ve won the lottery, even as others are seeing challenges. They’re talking about their business, their asset, their retirement plan. With values and associated property taxes changing dramatically, they want to know how these changes will influence the way they live the rest of their lives. They may be considering a lot of options. They could sell the building and move to the Caribbean. They could arrange a sale leaseback, so they could invest the increased property value back into their business, remain at the same address and concentrate on the reason they located here in the first place. They might remain and see what the future holds for their business and land values.
How have area property taxes been affected?
The basis for property tax assessments has gone from what is physically there today to what a planner has decided they want the skyline to look like. But there are also tax policies in place, such as land averaging, that can protect property owners from incredible increases in property value. However, property taxes represent a grey area that creates a lot of uncertainty, and we’re often retained to provide guidance based on what that property owner is planning for the future.
What are the potential ramifications of the Broadway Plan for overall municipal taxes?
We expect that the development will provide a great opportunity for the municipal government to lower average tax rates across Vancouver.
“The [Broadway] plan has already created an immediate and dramatic increase in how the affected property is valued,” says Scott Bowden, head of appraisal and property tax for Canada. COLLIERS
Why is the idea of a 15-minute city appealing, and how does it relate to the “tent effect”?
The Broadway Plan is amenity rich and designed to provide residents with what they need to work, shop and play within 15 minutes of where they live.
From a distance, that looks like a series of tents around the transit nodes, with the tallest buildings in the centre and then falling away to different types of businesses and housing — although the land values drop away at a slower rate than you might expect. But it creates a desirable sense of different communities with larger cores featuring tall office or residential buildings with large retail podiums, gradually transitioning into consideration for townhouse development.
The Marine Drive corridor struggles to create this tent effect in areas because density is centred around transit nodes that are farther apart. The Broadway corridor works to avoid this fate because the nodes are being spaced closer together.
Emerging business sectors will also be looking at the Broadway Plan. What opportunities do you see for biotech, for example?
UBC is the number-one ranked university for biosciences in Canada. With the SkTtrain expanding further to UBC, I think there’s a great opportunity to create student housing in the Broadway corridor, and for those students to eventually remain in the area to work for companies like STEMCELL Technologies, AbCellera and Zymeworks who can find opportunities to expand here.
The Broadway Plan has the potential to meet the needs of a complete biosciences ecosystem.
“With the SkTtrain expanding further to UBC, I think there’s a great opportunity to create student housing in the Broadway corridor,” says Scott Bowden, head of appraisal and property tax for Canada. GETTY IMAGES
What message are you sharing with developers today?
There’s a fair bit of risk for a developer to take, not knowing whether they’re going to be able to build what they want to build.
The Broadway Plan is 245 pages long and it may be difficult to predict exactly what it means, but one of the best things that could be said about it is that it is a plan — one that eloquently addresses infrastructure, housing supply and real estate development at the same time.
The plan is detailed enough to offer guidance and allow people to make decisions for their lives, even as it provides developers with enough certainty that they’re at least comfortable starting the process.
To learn more, visit collierscanada.com.
This story was created by Content Works, Postmedia’s commercial content division, on behalf of Colliers.