Land Price Increases—the Real Underlying Cause

Posted on Monday 14 November 2005

Thank you to the City of Ottawa for sending me a copy of their recent Land Inventory Report. The Consultants make a number of very useful points such as noting that lands in inventory are largely held by a few players in the development industry. I have never believed that such concentration of ownership is good for housing markets, home buyers, first time home buyers, small builders and cities generally.

I think that if they had access to 2005 data, they would have seen that raw land prices have jumped even higher with lands that are General Urban and ready for development within two years are now trading at $150,000 per acre and up.

To me, rapid increases in land prices together with, for example, a push to recently re-designate 300 acres of industrial lands to residential (successfully, by the way), means that we have a shortage of land and that shortage is caused by the City’s policy freezing the urban boundary.

I don’t believe in that policy—cities are living organisms and artificial restrictions are bad policy for cities. Now, many people feel that freezing the urban boundary will increase the density and intensity of development within the existing boundary. Well, if you look at recent Council decisions, for example, the down-zoning of a former school site from 99 town homes to 55 singles because of NIMBY pressure (and despite City staff support for the original application), you get not only bad planning which is contrary to the City’s own Official Plan but hypocrisy as well.

Now developers are often cited as the source of urban sprawl but developments such as the recent construction of three, 15 storey apartment towers in Kanata show that developers can build denser communities. It is the City imposing 40% open space requirements on parts of our suburbs, insisting on road rights-of-way that can be as much as 26 metres wide (practically big enough for Formula One Racing), imposing setbacks, height limits, single family only zoning, no spot commercial inside new sub-divisions, one way streets, no left turns, no work-from-home rules, no employees in the homes, no duplexes, or duplexes and triplexes that attract two and even three Development Charges and a plethora of other restrictions that create sub-divisions that are not walkable, not sustainable and not affordable.

Anyway, I think the research is useful but obviously I don’t entirely agree with the conclusions…

Dr. Bruce


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