Land prices near existing SkyTrain stations rose faster than other properties, report says
Derrick Penner
Sun
History suggests the Canada Line rapid transit corridor could spur a residential growth spurt around its stations for decades after the 2010 Winter Games, according to a new report.
Development patterns that sprouted around SkyTrain’s Expo Line suggest a similar future for the Canada Line, Landcor Data Corp. said in a report made public this week.
Landcor also found that Squamish has received an infrastructure-aided boost to its real estate market with improvements to the Sea to Sky Highway, which was timed for the 2010 Olympics.
Along the SkyTrain corridor, “the Expo Line changed the face of Metro Vancouver,” Landcor president Rudy Nielsen said in an interview. And so, too, could the Canada Line through downtown, south Vancouver, and northern Richmond.
“We found out you have to have two things,” Nielsen said. “The market conditions have to be favourable, and high-density zoning has to be in place.”
The Landcor report noted that SkyTrain’s initial completion in 1985 coincided with the beginning of an economic upturn. Current market conditions, Nielsen added, are not favourable for increased residential development. Sales in Lower Mainland real estate markets have slowed, with prices falling in some locations, and he said it is hard to predict when that will turn around.
Central 1 Credit Union (formerly Credit Union Central B.C.) in its latest forecast estimates residential construction will continue to wane through 2009 and 2010, before recovering in 2011 and 2012.
Research by Don Campbell, publisher of real-estate-investment newsletters, found that the experience of more development and higher property prices surrounding transit stations wouldn’t be unique to B.C.
Campbell has published several editions of a report titled Gateway Effect, which estimates that transportation improvements will add 10 to 20 per cent to property values in close proximity to those improvements, whether it is a new Canada Line station or the new Golden Ears Bridge.
Campbell added that this is a relative condition. If property values generally increase, homes close to the transportation improvement will jump by 10 to 20 per cent more. However, if property values generally decline, those homes closest to transportation improvements will decline 10 to 20 per cent less.
In the latest edition of his report, released on Wednesday, Campbell said he looked at cases where values rose in Los Angeles, San Francisco, Chicago and New Jersey when property was located within a 500- to 800-metre radius at stations of new rapid-transit developments.
In B.C., Landcor found that prices for vacant land in a 500-metre radius around SkyTrain stations increased 628 per cent between 1986 and 2006, compared with 352 per cent for overall real estate values within SkyTrain communities.
And the zones around Expo Line SkyTrain stations attracted 25 per cent of all residential construction in Burnaby in the decade after 1986, compared with 13 per cent in the decade before.
In New Westminster, the effect wasn’t as significant with station zones accounting for 34 per cent of residential construction in the decade after 1986, compared with 28 per cent in the decade before.
Vancouver also saw a slim effect, with SkyTrain zones attracting just over six per cent of residential construction between 1986 and 1996, versus 3.6 per cent between 1987 and 1985, although Nielsen said the Joyce Street station “by far was the winner.”
Joyce station saw 1,211 residential units built within Landcor’s 500-metre study zone between 1986 and 1996, a 909-per-cent increase from the decade before. A further 1,158 units were built around Joyce station between 1996 and 2006.
As for development around the Canada Line, the Landcor report notes that the City of Vancouver has adopted an “eco-density” principle and is planning for higher densities around certain locations.
Nielsen added that Richmond has already embraced the concept of density around three of Richmond‘s five Canada Line stations being built or planned.
© The Vancouver Sun 2008