The fifth in a series by John Whistler:
One of the prime reasons for a fixed link to the Sunshine Coast is the perceived economic benefits. While resource development has potential, the ability to achieve this benefit is questionable as it will be subject to satisfactory arrangements with the local First Nations. There would also likely be some economic benefits for tourism and other businesses associated with increased automobile access.
Clearly, the most significant economic benefit would be to real estate. So what is the potential scale of this benefit?
The census notes that there were 16,498 residences in the Sunshine Coast Regional District (SCRD) in 2011 (Powell River Regional District not included). The July 2014 MLS Benchmark dwelling price for the SCRD was $353,900. This gives a ball-park estimate of $5.8 billion for the total value of residential real estate in the SCRD.
If it is assumed that a fixed link, over a period of 10 years, will cause an increase in property values of 50 percent and will stimulate construction of an additional 50 percent more residences, the potential benefit would be $7.25 billion in additional real estate value.
One question that may not be asked enough: Is it desirable to increase property values by 50 percent and to stimulate a 50 percent increase in residences?
This would depend who you are. It is clearly a benefit for property owners and developers. It may not be a benefit to existing residents who do not own property and are struggling with housing affordability.
A high number of residences are second homes or recreational properties – 22 percent in the SCRD compared to the BC average of 9 percent. Increasing the stock of recreational homes is unlikely to benefit existing renters who are negatively impacted by low vacancy rates.
My nephews are a good example of who may lose out. They grew up in Sechelt and are now in their twenties. They have found work locally in the trades – work that is important to support increasing the housing stock and for resource development. This career choice excludes them from the Metro Vancouver real estate market. Today, it is possible for them to buy real estate in their home town, though a stretch financially. They would be priced out with a 50 percent increase that could occur from a fixed link.
Another question: If real estate will be the significant economic benefit from a fixed link, how would it be paid for?
One option would be a surcharge to the Property Purchase Tax, similar to the recent surcharge implemented in Metro Vancouver for foreign buyers. This would directly target the increased values generated from the fixed link.
Another option would be a regional development cost levy. This would directly target new developments that are stimulated from the fixed link.
A regional PST surcharge could be a possibility and would capture the materials associated with new developments. Unfortunately, because of the complexities of BC’s PST regime, this option would likely create a bureaucratic nightmare and unintended consequences.
Tolling is a frequently discussed option. The BC Government is silent on this issue as it would apply to the Sunshine Coast. Given the current government strategy to only toll new highway infrastructure that has a no-cost alternative, this option is a wild card.
Of course, there is the historical precedent used throughout BC’s colourful history of highway building, to pay for it from general revenues.
Regardless of the financing option(s) that will be used, it is unexpected that this project will be subject to a local referendum. Christy Clark has made it clear: referendums are for public transit projects only.
Interesting to compare to North Shore property values & Lion’s Gate bridge — but sprawl on an even larger scale. Maybe someone knowledgeable about that history and current results could comment.
ANY major investment into infrastructure in Lower Mainland or Southern V Island or SC in this case would provide a NET BENEFIT due to increased land values (easily up 100% in ten years), PST, GST, income taxes, property taxes, CPP, EI and land transfer taxes from newly developed housing and improved existing ones, plus new jobs and industry, ports even.
Vancouver and area is a port city. Let’s expand on that. Not just a resort city. That too though.
It matters little if bridge, tunnel, subway or LRT, they ALL will do the same thing: drive more immigration, more jobs, more economic activity, more mobility, more tax revenue.
Of course like any change, there will be naysayers.
Let me ask you the opposite: who benefits from ex-migration, declining property values and higher unemployment ? Is that preferred ?
The bigger question to me is: why are we not drilling Broadway tunnel yet for UBC subway, why sn’t Hwy 1 a 6 lane highway to Abbotsford yet, why is Patullo bridges not 6 lanes yet, why is Massey bridge not yet built, nor LRT to Langley or CanadaLine extension south in Richmond, nor bridge expansions and subways to/from N-Van and W-Van ?
“Any major investment in infrastructure… would provide a NET BENEFIT…”
Let’s put an incinerator, sewage treatment plant, airport runway and a big bridge in front of Thomas’s house and see how much his property values increase.
“Any”?
Prove to all of us that it won’t just shift the specific location of investment for no net change.
Of course the odd house will not benefit. We all get that.It is about benefit for MOST. Any change provides winners and losers. A major infrastructure investment, say Broadway line to UBC, is also not loved by everybody in Kits or Point Grey.
Would Vancouver without an airport, a railway or Hwy 1 a viable city ?
Major infrastructure is required for millions of people, and as cities grow they need arteries in every direction, some rail, some road/bridges/tunnels, some ships and airports.
Major infrastructure that is designed just to spread investment out doesn’t lead to net benefit. It just spreads it out. And it costs us all more to spread it out because it demands more infrastructure for the same investment.
Property values in Vancouver have increased more than in Burnaby and more again than in Langley. This will always be so. But it costs a lot more (taxes) to service the needs of the sprawling suburbs. It is therefore a poor investment to build infrastructure to encourage sprawl. A few win: mostly big sprawl-oriented developers. But we all lose.
Sprawl is a biased word.
I prefer the word space, or leafy neighborhoods with pretty houses & yards.
10M people need space and expansion, not just skywards, but east, west and north too !
A large region needs everything: highrises and low rises, yards and tiny condos, bars and parks.
Sprawl is descriptive a word. Leafy neighbourhood with pretty houses and yards is a marketing campaign.
Vienna: most livable city. I loved it. Pop: 1.8m Area: 414 sq. km. Almost no highrises.
Vancouver: pretty good but dull because it is so spread out. Pop: 2.4m Area: 2,700 sq. km.
You just want to wreck what little we have going for us and make getting out of town even more ugly and disturbing having to drive past yet more malls and parking lots.
Europe has affordability problems 200 years ago. That is when they densified their cities, before we had cars and elevators. As such, most buildings were 6 to 7 stories max. Loads of stairs. Designed for pedestrians and the odd rich guy with a horse or even a carriage. UNLIKE USA or Canada which grew with the car and the elevator. Hard to rebuild a city fast that grew with cars in mind. Give it another 100 years. You are free to move to Vienna. A 50 sqm 2BR is not necessarily better than a 1000 sq ft condo in Yaletown as Vienna has many noice and many more ugly lower middle class dense dilapidated parts. And yes, more infrastructure is needed here in MetroVan for both cars and people ie subways/LRTs/bike lanes and roads/bridges/tunnels.
Like Trumpland, many politicians and especially planners have their head in the wrong dark place as they do not read the populace’s need, such as “we want townhouses with a yard for our kids” or “we want less congestion on roads” or “we want less slow wobbly buses but fast subways”. What is so hard to understand about that ?
Condo towers in Gibsons. That’s what everybody is afraid of. And to a certain extent, they are right. But since this link, whatever form it takes, will likely be tolled, the effect of this will be minimized. Certainly a toll would limit the commuting potential of the SC, although I have to admit I know of one person who has for decades run a well known retail business in Vancouver while commuting from the SC. So there would be some changes to the way of life up there, but people who want to retain the “old” way of life can always retreat to Lund.
And then?
When Thomas gets his subway to Powell River (his 43rd), a new bridge from Lund to…?
Even I think the a bridge to PR is premature as it is too far north and too remote. But maybe in 2050 or 2100.
Other infrastructure has priority of a SC bridge namely:
UBC Broadway subway
new Lionsgate bridge incl rail link on it – or third crossing / tunnel
Boundary Rd bridge south to Richmond
8 lane Patullo Bridge
Canada Line extension south
Second subway south out of downtown (below Burrard) connecting to UBC Broadway line on Broadway
North shore subway under marine Drive
subway E from downtown through E-Van to 2nd Narrows to N Van
6 lane Patullo bridge
bypass tunnel under N West
6 lane Hwy 1 to Abbotsford