Derrick Penner, Vancouver Sun, August 21, 2008
History suggests the Canada Line rapid transit corridor could spur a post-2010 Olympics residential growth spurt around its stations for decades after the Games, according to a research report released this week.
It is the patterns of development that sprouted around SkyTrain's Expo Line that also point to the Canada Line's potential, Landcor Data Corp. said in its report.
Landcor also found that Squamish recently has also 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 could the Canada Line.
"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 coincided with the beginning of an economic upturn.
Current market conditions, Nielsen added, are not favourable for a boost in 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 it will turn around.
Central 1 Credit Union (formerly Credit Union Central B.C.) in its latest forecast estimates that residential construction will continue to wane through 2009 and 2010 before recovering in 2011 and 2012.
The research of 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 the Gateway Effect, which estimates that transportation improvements will add 10-20 per cent of property values on real estate located in close proximity to those improvements, whether it is a new Canada Line station or the new Golden Ears bridge.
Campbell added that it is a relative condition. If property values generally increase, homes close to the transportation improvement will jump by 10-20 per cent more.
However, if property values generally decline, those homes closest to transportation improvements will decline 10-20 per cent less.
In the latest edition of the Gateway Effect report, released Wednesday, Campbell said he looked at cases in Los Angeles, San Francisco, Chicago and New Jersey where property values rose within a 500-800 metre radius around stations of new rapid-transit developments.
In B.C., Landcor found that prices for vacant land in a 500 metre radius around 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 10 decade after 1986 compared with 13 per cent in the decade before.
In New Westminster, the effect wasn't as big, with station zones accounting for 34 per cent of residential construction in the decade after 1986 compared with 18 per cent in the decade before.
Vancouver saw a similarly 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, though 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 2006, 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 the EcoDensity principle and is planning for higher densities around certain locations.
However, Nielsen added that Richmond has already embraced the concept of density around three of Richmond's five Canada Line stations being built or planned.