Metro Vancouver awaits the results later this month of a plebiscite on a tax to fund transit expansion. Avison Young's Andrew Petrozzi tells us what's at stake for real estate.
Participation in the plebiscite—gauging support for a 0.5% PST increase to fund a 10-year, $7.5B transportation infrastructure investment plan—could be as high as 50%, Andrew says. While voter intention polls showed the No side was ahead early on, he’s crossing his fingers for the Yes campaign—which included a coalition of municipal mayors and real estate heavy hitters like NAIOP and UDI. He says the tax plan offers a definitive timeline and funding source, boosting investor confidence.
Commercial real estate stands to gain much from stable investment in transportation infrastructure. Sustainability benefits aside, proximity to transit can increase property prices; Andrew points to US studies showing the value of mixed-use sites on light rail lines can be 150% higher. And because tenants are seeking workspaces near public transit in order to access the largest possible labour pool, projects positioned along these nodes tend to see lower vacancy and higher rents (and fewer employees frazzled by chronic congestion).
Andrew cites a survey of 20 area developers that found 72% were ready to invest in Surrey if that city’s LRT, one of the proposed investments, proceeds. Surrey Central City is a shining example of quality transit oriented development. And the Canada Line, the newest SkyTrain spur, is added proof of transit’s power to spur development, as nearly a dozen projects are underway on the Cambie corridor, including PCI Group’s Marine Gateway (above): two residential towers, an office building and a high street with Loblaws supermarket.
The new Evergreen Line will bring a “flush” of mixed-use development to the region’s northeast sector, Andrew notes, notably Port Moody’s first office tower at Onni Group's Suter Brook Village (above). And the proposed levy, generating $250M annually, would encourage plenty more. “People want less risk when they’re making decisions on multi-hundred-million dollar projects,” says Andrew. “The tax would provide that certainty.”
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