Time to look at ALR, developer group suggests
By Frank O’Brien
Commercial real estate developers in Metro Vancouver list municipal delays and a land shortage as, respectively, the major short-term and long-term challenges facing the industry.
An internal survey of the 300-member NAIOP (Commercial Real Estate Development Association, Vancouver chapter) found that the length of time it takes to bring a commercial development to market topped concerns.
“Almost half of the respondents said timing was the biggest challenge. It is by far the biggest issue,” said Chris MacCauley, a NAIOP vice-president and an industrial specialist with commercial broker CBRE. Delays in municipal approvals is an “across-the-board issue”, he said, the biggest challenge in the office, industrial, retail and multi-family sectors.
MacCauley said respondents said civic approvals take too long and are too costly and there was also a lack of direction from municipal planners that often added to delays.
In the industrial sector, MacCauley said, it takes an average of from 12 to 18 months to bring a development from permit application to construction completion, if no rezoning is required. “This is much longer than in any other Canadian metro area and twice as long as in Calgary [Region].”
For a typical office development, a NAIOP regional development cost survey in 2014 showed that, if rezoning was required, the average length of time to achieve all approvals was 6.1 months in the Metro Vancouver region. The City of Vancouver was the third slowest at 270 days, or approximately nine months.
“In Vancouver it often comes down to issues around transparency and inconsistency,” MacCauley said, noting that several municipalities also have design guidelines and inconsistent sustainability issues that can slow the approval process. “There is often a lack of clarity.”
For the long term, a lack of commercially zoned land and constraints due to the Agriculture Land Reserve (29%) were seen as the biggest challenge, the survey found. The ALR, formed in 1973, covers about 150,000 acres in Metro Vancouver and accounts for 22% of the region’s land base.
In comparison, there is only 476 acres of privately owned land that is serviced and ready for industrial development, according to NAIOP.
Developers surveyed recommend master planning at the regional and provincial level, including Port Metro Vancouver and the Agriculture Land Commission, to ease pressures that have driven average commercial land prices to well over $1 million per acre.
NAIOP members are aware of the sensitive politics surrounding any debate on the ALR, MacCauley said. “But, they feel it is time to stop looking at it as a fight and start to work together to find solutions.”
“We are doing a lot more on a lot less land with [commercial] development and agriculture is doing a lot more with a lot less land than back in 1973,” MacCauley said.
The NAIOP survey was conducted this year and will help the association as it advocates for change with various governments, MacCauley explained. “It is an internal document and will not be released.”
