When Price Tags has a contest for the most important planning initiatives in Metro Vancouver, my vote will be for the recognition of the Agricultural Land Reserve (ALR). This was created in 1973 to permanently protect 47,000 square kilometers of provincial fertile arable land from urbanization and land development. It was a smart idea to start the conversation of the importance of food security and maintenance of farm land. Once its developed, farmland never goes back to arable use.
Of course by its nature the ALR restrictions prevent land owners from flipping and developing agricultural properties, and many may say that restrains the property rights of the owners. But there are lots of loopholes that are being exploited, including the development of monster mansions in Richmond on agricultural properties. Price Tags has already reported on the fact that there is no foreign buyers’ tax on these mansions built on the best farmland in Canada-and hey, raise some blueberries or a few calves on the land and you will be paying the very low agricultural property tax too. This foreign ownership drives up the price of the farmland, and of course makes it so that a local farmer will be a vassal, not a land owner.
A prime example of McMansioning on the ALR lands is Sam Cooper’s article in the Vancouver Sun about 76 acres for sale in Surrey. The land is in the agricultural land reserve. A house with 14,225 square feet has been built on the land in the Tuscan style, and there’s a 15 acre vineyard. B.C. assessment papers value the residential-zoned land at $986,000; the farmland is valued at $76,000, with the buildings valued at $1.84 million. That total assessed value for this property is $2.9 million.
That may be the assessment value-but realtors have listed this property for $28 million dollars. Sam Cooper notes that “Marketers hired to sell the property are mounting a slick video ad campaign targeting a “special buyer” — likely from Mainland China they say — willing to pay surreal money for an “Italian resort” built on the border of Surrey and Langley, on the 4000-block of 192nd Street. Welcome to Villa di Fonti,” realtor Jin Ye says in a video aimed at ultra-wealthy international buyers. “Once inside this architectural masterpiece, you’ll walk into an old world Tuscan villa estate, with all the modern luxuries you can imagine.”
The YouTube video of this house on farmland is below:
This house took two years to build, has a helipad, parking for 40 cars, and a lake stocked with trout. To get approval for this house a “residential lot” had a special zoning process within the agricultural-zoned lands. After building this behemoth the owners are “downsizing” after living on the estate “for a short time“.“It really is fit for royalty,” said home-stager Scotty Rolland, a native of California who says she is familiar with some of the most luxurious real estate offerings in North America. “I’ve never seen anything like it in B.C.”
And with an asking price of $28 million this is how farmland is usurped away from its intended use, purchased at prices that were originally for agricultural land purposes-not a stocked trout pond. As the home-stager observed “It’s the size and the features,” Rolland said. “And it has really good feng shui. I believe there will be a buyer from China.”
ALR lot. Assessed at $213k. Asking $55M.
https://twitter.com/FIVRE604/status/899849464235474944
Didn’t you know Sandy that the ALR is reserved for mini casinos and nightclubs?
http://vancouversun.com/news/local-news/b-c-government-trying-to-seize-richmond-mansion-claiming-it-was-used-for-violent-crime-and-money-laundering
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Reblogged this on Sandy James Planner.
There is an additional wrinkle here that many people don’t realize. The ALR was imposed in one go to avoid endless negotiation over the suitability of individual parcels. As an inevitable result, there were many parcels in the ALR which are absolutely unfarmable (my favourite: 6000 sq ft of steep rocky bluff in Central Saanich) and many already had houses on them.
The convenient way to manage that in one-size-fits-all legislation was to allow one house on any parcel of farmland (plus a few other wrinkles like housing for farm hands.) It fell to individual communities to zone what kind of house could be built and there’s the issue: many of those communities were either unprepared for the onslaught of megahouse building (by having open-ended floor area ratios) or unwilling to resist the constant pressure of development interests.
It shows two things
A) BC Assessment agency is in dire need of reform as assessments need a far closer link to market realities
B) we tax properties far too little and incomes far too much. Foreign investors, Canadians ( old stock, newly immigrated or merely of convenience) and second ( or third or fourth ) home owners know that in spades and as such do the rational thing: buy the biggest home they can afford and declare incomes abroad, if possible or arrange their affairs accordingly. Far better would be to eliminate provincial taxes altogether but tax homes triple and according to their true value. That would monetize BC’s true gold, residential real estate, and it would create far more jobs. It would also entice seniors to downsize as they are a well coddled part of society mooching off others for healthcare, for example while sitting on millions of tax free equity in their homes – while young families with two overtaxed jobs struggle !!
Where is this discussion in BC ?
I mean provincial income taxes. Editor: perhaps insert that word above and delete this here comment.
I know that the editors love to delete your comments so I don’t think that would be an issue
And why is this, my friend ? What’s not to like about these utterly rational comments ?
Actually, your comment on seniors was quite irrational.
Some seniors are poor. We get that. Many are quite well off.
Living in a big house is a choice. It is consumption. That was my point. This consumption is undertaxed, while working is grossly overtaxed.
Many, most actually, homes are under assessed by the BC Assessement agency. Why ?
Your young struggling families pay 1.5X – 2X their current rent (carried over from tripled property taxes, according to this plan) but pay less or nothing in provincial tax, which isn’t that much. Is this an improvement? It doesn’t even sound like robbing Peter to pay Paul. It sounds like robbing Peter then lending the money back to him with interest.
Incomes are taxed far too highly in Canada. 10% – across the board I’d say. That would create far more discretionary incomes in your hand AND create many many jobs. it would also teach even a minimum wage recipient that things (like public transit, roads, schools or hospitals) are not free.
Then tax consumption (say PST of 12%) and housing FAR MORE (say triple provincial property taxes) as housing size is discretionary to a large degree. Like a new car at $35,000 – great – high PST on it. A high PST is actually real green, as you’d buy less and re-use old clothing or cars more. Like a large condo with ocean view as opposed to a functional but far smaller one with no view: tax it. Why work hard and make an extra 25,000 from 80,000 to 105,00 and hand 40% (!!) of it to the government ? That is legalized theft in my opinion.
Yet, one buys a house in W Van and it goes from $2M to $3M in a few year and it is utterly tax free .. with property taxes of perhaps $4000/yr only? Isn’t that weird ? No wonder foreigners and immigrants flock here and can’t wait to buy the largest house they can afford. It is common sense, utterly rational behavior. But is it good social and societal policy ? Hardly !
Ever been to New York or Boston or any major city in US ? A $2M house would easily have triple our property taxes, or often far more. MetroVan has very very low property taxes and thus, foreign investors, Canadians ( old stock, newly immigrated or merely of convenience) and second ( or third or fourth ) home owners know that in spades and act rationally. That is one reason for our very high house prices and lack of affordability.
The above mentioned $28M mansion would then pay huge annual taxes we could use for the homeless, for example, and it mattered little if this mansion was acquired by a local, with drug money, with stolen cash or by a corrupt foreign government official. We ought to monetize real estate far better here as the source of cash is often unknown and incomes get shifted elsewhere, say abroad.
We could then encourage even more of these mansions as they actually paid real taxes that we could use for useful purposes.
Re: 6,000 ft2 rocky bluff in the ALR. That’s a postage stamp. The surveyors and cartographers used larger blocks of land that included small rocky bluffs, ponds, etc. to preserve the large regional soil profiles that surround them. It was specifically not a micro-surveying exercise.
You will note they excluded mountain ranges.
Tacky house. I’m hoping the NDP/Greens move to disallow this kind of structure in the ALR and/or include it in the foreign buyers tax.