Guidance wanted
Abbotsford failed to win exclusion of 497 acres from the Agricultural Land Reserve (ALR) at the end of April, including 331 acres along its border with Langley. The decision is now a landmark across the region for the challenges facing anyone trying to alleviate Metro Vancouver’s industrial land shortage.
“Everything we’ve seen from the [Agricultural Land Commission (ALC)], including the recent Abbotsford decision, just shows that they’re really not open to anything,” remarked Maple Ridge Coun. Tyler Shymkiw at the end of June when Kevin Davison sought – and was refused – the city’s blessing for a proposed exclusion of his dairy farm for industrial development.
The bitter irony for Abbotsford is that it followed guidance ALC staff gave to parties seeking to exclude properties for non-farm use. The failure of its bid has prompted Abbotsford mayor Henry Braun to seek fresh guidance on what municipalities are supposed to do.
Meanwhile, the industrial land shortage increases, pushing up the cost of space and raw land.
Michael Farrell, a principal in the Vancouver office of brokerage Avison Young, said demand for space and land is as strong as it’s ever been and Metro Vancouver’s ongoing economic growth will support activity for the foreseeable future.
Buyers are paying $300 a square foot in Metro Vancouver, and even prices in Chilliwack are $200 a square foot. Meanwhile, Surrey land prices are maxing out at $3 million an acre and the upward pressure is spilling over into Langley, where deals are in the works for $2 million an acre. Chilliwack comes in cheapest at $1.5 million an acre, but land anywhere is tough to find.
Avison Young reports that Fraser Valley industrial deals are “constrained only by an ongoing lack of new supply.” It doesn’t yet have data for the second quarter, but the trend is clear. The 47 industrial deals done in the first quarter represent significantly less than a quarter of those done in 2017. The value of $131 million, meanwhile, is nearly a third of 2017’s tally of $465 million.
Regional solution
“The delivery of significant amounts of new industrial space in the Fraser Valley since 2015 has yet to provide any relief in the tight vacancies still being recorded in the valley’s industrial markets,” reports Avison Young regarding Fraser Valley industrial markets.
Doing so is going to require a regional solution, if recent comments by Braun are any indication. Similar to housing demand, which has tarred the region with a reputation for high prices even though pockets of affordability exist (increasingly within the Fraser Valley), the region as a whole is suffering from Metro Vancouver’s industrial land shortage.
Abbotsford has 13 agri-food processing plants, just seven of which are in industrial areas. The other six are within the ALR, something provincial regulations allow. Yet it doesn’t sit well with Braun, even though he believes the clay-based soils adjacent to Gloucester Industrial Estates make the most sense to exclude for non-farm uses.
“Why would anybody want to have a processing plant in the industrial area when they can go to agricultural land that’s worth way less and the taxes are way less?” he asked.
But people who want to keep farmland for soil-based agriculture – something Richmond and the province have recently targeted with moves to restrict the use of concrete slabs and other forms of impermeable flooring in farm buildings – need to ask where industrial businesses are going to go if not farmland.
“We can chase them all off, but chase them to where?” he asked. “There’s a shortage of land in the valley.… Our neighbours to the west who complain about what we’re trying to fix in Abbotsford should have been crying a little harder when they saw their own industrial lands, employment lands, being converted to condos.” •
