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Rapid transit drives land prices

Jeff Nagel, Surrey North Delta Leader, August 21, 2008

Construction of new SkyTrain lines around Metro Vancouver will spur dense real estate development and drive nearby property prices up, a new report predicts.

Landcor Data Corp. concludes sharp price gains along SkyTrain's Expo Line since 1986 was due to the rapid transit line's arrival – and the same trend will likely play out along the Canada Line in Vancouver and Richmond.

"The Expo Line changed the face of Metro Vancouver," Landcor president Rudy Nielsen said. "We believe that the Canada Line has the potential to do the same."

He expects similar gains as TransLink moves to build the Evergreen Line to Port Moody and Coquitlam, extend the Expo Line deeper into Surrey and eventually to Langley, and run the Millennium Line west along Broadway toward UBC.

Residential land within 500 metres of Expo Line stations went up in value 251 per cent between 1986 and 1996, the Landcor study found, compared to a 133 per cent price increase for residential real estate in general.

From 1986-2006, prices near Expo stations rose 628 per cent, versus a norm of 352 per cent in those cities.

The fastest growth happened within 500 metres of New Westminster, Edmonds and Joyce stations, where more than 3,700 new units were built in the 10 years after Expo 86.

Edmonds, Metrotown and Patterson stations accounted for a quarter of all Burnaby residential construction from 1986-96, twice as much as a decade earlier.

Similarly, New Westminster's Columbia and New Westminster stations contributed a third of that city's total.

But parts of Vancouver – including 29 Avenue and Nanaimo stations – and Surrey's Whalley neighbourhood lagged behind other parts of the line because much land was already established single family neighbourhoods.

The northern Surrey stations also suffered from high crime rates and illegal street activity, the report noted.

Growth prospects are best if there's plenty of vacant or industrial land nearby that can be redeveloped.

"You don't want a bunch of new houses because you cant knock those down right away," Nielsen said.

He said strong growth depends on high density zoning from the local city and reasonable market conditions.

TransLink is also pursuing a new real estate strategy that calls for it to lead the development of property around stations so profits can be used to help finance the transit system.

Nielsen said that could be positive or negative to growth and prices depending on how expected partnerships with developers play out.

Three stations along the Canada Line in Richmond – Capstan, Lansdowne and Richmond-Brighouse – are to be the centre of high-density urban villages that are complete communities where residents can live, work and play.

Landcor notes one 14-acre site next to Capstan station could see 10 residential towers spring up along with multiple other amenities.

Similarly, Oval Gateway Village near Lansdowne station is expected to be a 300-acre complete community home to more than 30,000 residents.

The City of Vancouver is also planning for transit-oriented high-density development along the Cambie Street corridor where the Canada Line will run when it opens late next year.