GEORGE MASSEY TUNNEL REPLACEMENT PROJECT LAND USE STUDY

June 2016

Prepared for: B.C. Ministry of Transportation and Infrastructure

Prepared by: Site Economics Ltd.

701 West Georgia Street – Suite 1500 , BC V7Y 1C6 604.250.2992 [email protected] Project 16-17 REPLACEMENT PROJECT - LAND USE STUDY

TABLE OF CONTENTS

1 EXECUTIVE SUMMARY ...... 2 2 INTRODUCTION ...... 4 2.1 Project Context ...... 4 2.2 Potential Influences on Land Use and Development ...... 5 3 LAND USE CONTEXT ...... 6 3.1 Land Use Restrictions ...... 6 3.1.1 The Agricultural Land Reserve (ALR) ...... 6 3.1.2 Metro Vancouver Regional Growth Strategy ...... 6 3.1.3 Municipal Official Community Plans ...... 7 3.1.4 Port of Vancouver Land Use Plan ...... 7 3.2 Industrial Land Base ...... 8 3.3 Residential Land Base ...... 9 4 TRANSPORTATION AND LAND USE IN METRO VANCOUVER ...... 10 4.1 Land Use and Transportation Theory ...... 10 4.2 Application to Metro Vancouver ...... 10 4.3 Land Use Restrictions: Looking Forward ...... 11 5 COMPARABLE TRANSPORTATION PROJECTS ...... 12 5.1 ...... 13 5.2 Bridge ...... 16 5.3 Gateway Program ...... 20 5.3.1 South Fraser Perimeter Road ...... 20 5.3.2 Highway 1 Project ...... 22 5.4 Summary ...... 23 6 TransLink Land Use Study ...... 25 7 CONCLUSIONS ...... 26 8. REFERENCES ...... 28 APPENDIX A - TRANSIT AND REAL ESTATE DEVELOPMENT RESEARCH ...... 30 APPENDIX B - PORT OF VANCOUVER OVERVIEW AND IMPACTS ...... 33 APPENDIX C - ASSUMPTIONS & LIMITING CONDITIONS ...... 37 APPENDIX D - PROFESSIONAL RESUME ...... 38

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GEORGE MASSEY TUNNEL REPLACEMENT PROJECT - LAND USE STUDY

1 EXECUTIVE SUMMARY This report was commissioned to review and summarize historic reports regarding the influence of major transportation projects on land use in Metro Vancouver, to support the land use effects assessment for the George Massey Tunnel Replacement Project (the Project).

The report reviews land use planning theory, provides an overview of existing land use plans in Metro Vancouver, examines the influence of a number of comparable transportation infrastructure projects on local and regional land use, and concludes the following:

Potential Effects of the George Massey Tunnel Replacement • The George Massey Tunnel Replacement Project is a key component of the regional, provincial and national transportation system. By reducing congestion the Project supports long-term economic growth that otherwise would accrue outside of the Metro Vancouver region. • The influence of the Project on land use will be very moderate, primarily due to the lack of vacant developable land on both sides of the crossing, and the presence of strong and restrictive land use controls across the region. • Because the Project does not change Metro Vancouver’s urban containment boundary, it can be reasonably anticipated that long-term development will focus on intensification of existing urban areas rather than expansion onto new land areas or 'sprawl'. • The only measurable influence of the Project is to add value and density to lands already designated for current and future development. There is no potential for the improved river crossing to change this or lead to the conversion of non-development land into development land. • The potential for municipal governments to expand land areas for urban development is a separate local policy decision, beyond the scope of this Project. Additionally, given the strength of existing land use policies such as the Agricultural Land Reserve, Metro Vancouver’s regional growth strategy and the Official Community Plans of Vancouver, Richmond, Delta, Surrey and White Rock, any significant changes in this regard are considered unlikely.

Land Use and Transportation Projects • Transportation infrastructure investments support efficient land development and accommodate growth in the population and economy. • Improved highway access and highway connections encourage denser, land intensive, high quality forms of development. • Comparable examples of improved transportation access in established areas within the region include the Alex Fraser Bridge in 1986 (Richmond to Delta/Surrey), Bridge in 2009 ( to ), Port Mann Bridge in 2012 (Surrey to Coquitlam), and in 2009 (Langley / Surrey to Pitt Meadows / Maple Ridge). These transportation projects resulted in: o No substantial influence on land use patterns. o No substantial changes to Official Community Plans (OCPs) or the boundaries of the Agricultural Land Reserve (ALR). o Increased rate of absorption of vacant lands already designated for development, and slightly increased the value of existing developments.

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• Numerous other examples illustrate that in order for a major transportation improvement to have a substantial impact on land use, vacant development lands must be present and available. • Transportation infrastructure has a major impact on the value of vacant development land, but only a marginal value impact on fully developed properties with measurable impacts including minor increases in land value, and the ability for developers to increase site density, generating increased economic value.

Metro Vancouver Land Use Context • For decades, the supply of land for urban development in the has been restricted through various plans developed by multiple jurisdictions, including Metro Vancouver’s Regional Growth Strategy (RGS) and the provincial Agricultural Land Reserve (ALR). • The combination of the Urban Containment Boundary outlined in the RGS and the ALR have effectively stopped the conversion of non-development lands to development lands. This is particularly the case in Richmond and Delta. • These plans have ensured that all new development occurs on vacant and under-developed lands located in urban areas that already have some form of development designation. • Historic population and employment growth have increased the area of developed land to the point that almost no vacant developable land remains available. With limited designated land on which to develop, the influence of new transportation infrastructure on land use has been muted. • The travel demand management effect of tolling new infrastructure further limits potential changes in land use. • Existing land use tools such as the ALR and the urban containment boundary will remain in force, and as such, it is anticipated that any future policy and plan updates will focus on intensification of established and developing urban areas, rather than major changes in land use designations.

The above findings are supported by conclusions of an independent assessment of the potential effects of the George Massey Tunnel Replacement Project commissioned by TransLink, (Coriolis Consultation Corp., April 2014) which concluded:

• The Project does not provide a new access to marketable and useable lands that were otherwise inaccessible. • Although industrial land in some municipalities will become relatively more attractive in terms of road access, a new Bridge does not bring “new” vacant industrial land to the market. • The Project is an important component in sustaining the region’s overall ability to access external trade markets and will help sustain the region’s competitiveness. • Vacant or under-utilized industrially designated land along the South Arm of the in Richmond will benefit the most from enhanced access due to the new bridge (i.e. industrial businesses in this location will have better access to the US border). However, there is a relatively small supply of vacant industrial land in this location that could be available for market development (i.e. most of the land is port-related). • While major new transportation investments might add localized pressure on lands within the urban containment boundary, such pressure would be incremental to the more substantial region-wide pressures that currently exist and are driven by the overall lack of developable land.

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2 INTRODUCTION The purpose of this report is to provide an analysis of the influence of the proposed George Massey Tunnel Replacement Project (the Project) on future trends in land use and development in areas adjacent to the Highway 99 corridor. Section 2 considers the Project context and Section 3 considers the broader land use context to provide a foundation for understanding potential project effects. Section 4 then reviews transportation/land use theory. Section 5 summarizes the outcomes of comparable transportation projects in the lower mainland, which illustrate that, where strong land use controls exist and land supply is limited, the influence of transportation projects is faster absorption and higher density development in the short term but no measurable change in land use over the long term. Section 6 summarizes the findings of TransLink’s 2014 study of the potential effects of the Project on land use, which found that the Project will not significantly impact the total rate of population or employment growth in the entire region for a sustained time but potentially would result in South Delta and South Surrey capturing slightly higher shares of the total Richmond, South Delta, and South Surrey population and population-serving employment and a shift in the pace of light industrial development over the near term. Section 7 provides conclusions based on the material presented in the balance of the report, which indicate that the effects of the Project are likely to be seen in higher and better use of lands within the existing land use designations, continued (but not new) development pressure within the urban containment boundary due to the shortage of developable land, but no long term effect on land use designations, including the ALR. The report is based on available information and reasonable industry standard assumptions typical of any overview report. See Appendix C for Assumptions & Limiting Conditions.

2.1 Project Context The George Massey Tunnel is a key component of the regional, provincial and national transportation system, carrying an average of 80,000 vehicles each day. It connects to key gateways such as the Vancouver International Airport (YVR), Peace Arch and Pacific -US border crossings, the BC Ferries Tsawwassen terminal, DeltaPort and the Boundary Bay Airport. It is a vital goods movement route that fuels the local, regional, provincial, and national economies, and is a key access point for businesses in Delta, Surrey, and Richmond as well as the Tsawwassen First Nation. Since the Massey Tunnel opened in 1959, Metro Vancouver’s population and economy have grown significantly and its population is forecast to continue to grow by more than one million people over the next 30 years. Without improvements to this crossing, economic growth and regional livability will be constrained by congestion and increasing travel times for commuters, goods movers, tourists / visitors, and commercial traffic. This urban growth will occur in designated development areas only, regardless of infrastructure, as the impact is primarily on timing and not location. The Alex Fraser Bridge and Highway 91 (opened in 1986) no longer have room to accommodate more northbound traffic in the morning rush hour or southbound traffic in the evening rush hour; both are at capacity. Queues are getting longer and rush 'hour' now lasts between two and three hours each day in

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GEORGE MASSEY TUNNEL REPLACEMENT PROJECT - LAND USE STUDY each direction. Despite this congestion there is substantial and ongoing pressure for more development and growth within Delta and Richmond and across the region. The new bridge and highway improvements will serve current and future demand for travel for many decades to come. This includes transit reliability improvements and pedestrian and cycling pathways to help increase use of non-car transportation alternatives. The new bridge will enhance the environment, improve traffic safety as well as serve as a lifeline structure in the event of a significant seismic event.

2.2 Potential Influences on Land Use and Development The Tunnel and the Highway 99 corridor are an important component of Canada’s Pacific Gateway, supporting the movement of domestic and international trade goods. A new bridge would facilitate shorter and more predictable trip times throughout the day and help businesses to schedule goods movement more efficiently. Anticipated influences of the new bridge on land use and development include: • Improved access (reduced travel time and delays) by road for personal vehicles, goods movement, and bus transit. This would yield a major positive impact on the extensive logistics-oriented industrial complex in Delta and Richmond. • Limited development of more waterfront-accessible port terminals along Fraser River industrial lands, because tunnel removal will not significantly affect the size of vessels using this area of the river due to other constraints. • Improved local roads in both Delta and Richmond associated with the proposed upgrades along the Highway 99 corridor and some interchanges. • Improved tourism access and goods movement from much of the region to the existing Tsawwassen Ferry Terminal and DeltaPort/Roberts Bank Terminal 2 respectively.

These influences on land use are expressed differently depending on whether it is already developed or vacant and what type of land use is permitted (i.e., Industrial, Residential, Commercial or Agricultural). Access is a key influence on land value; however land values do not substantially change where lands are not designated for high-density development. The better the transportation access, the higher the land value and increase in building densification, however, only in designated areas. In this context, land use controls across the region would be anticipated to minimize the influence that transportation infrastructure improvements have on land use and development patterns.

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3 LAND USE CONTEXT Urban development across the Metro Vancouver region is restricted by mountains, the Pacific Ocean, the U.S. border, and the Agricultural Land Reserve (Government of , 2002) (ALR), designed to preserve the agricultural land base. Accordingly, the urban area of Metro Vancouver is densely developed and geographically small despite the large and growing population. Over the past 20 years, the region has been subject to a land shortage, which has now reached very serious levels, particularly for industrial and residential lands. As a result, land values have doubled and tripled quickly and the pace of development has accelerated despite limited land and congested infrastructure.

3.1 Land Use Restrictions Land use plans are important mechanisms to guide and manage the designation and development potential of land. The stronger and more comprehensive the plans are, the clearer the future vision for the community. In Metro Vancouver, regional and municipal plans have been quick to add density and higher and better forms of development. Local governments, however, have been very strict in adding new developable lands to the supply of vacant development areas. Supply is defined very early in the land use planning process and is far more difficult to change. Following is a summary of the key land use plans in place in Metro Vancouver that define the context in which the Project’s potential effects have been considered. 3.1.1 The Agricultural Land Reserve (ALR) The Agricultural Land Reserve (Government of British Columbia, 2002) is a provincial designation in which agriculture is recognized as the priority use. Farming is encouraged and non-agricultural uses are controlled. Established in 1973, the ALR protects agricultural lands for agricultural uses. The ALR takes precedence over, but does not replace, other legislation and bylaws that may apply to the land. Local and regional governments, as well as other provincial agencies, are expected to plan in accordance with the provincial policy of preserving agricultural land. The lands within the ALR have not been critically important to accommodate growth in the right locations, and are protected with strict and widely supported land use restrictions that have remained largely unchanged under all conditions. With a few exceptions, the ALR area has not substantially changed since then, and has effectively acted as a growth management tool for the region. The scale of ALR exclusions has been minimal and there is no indication that this will change. As such, any change to the current management of ALR lands would have to be the result of critical and regional growth pressures, not expanded transportation infrastructure in a specific area. 3.1.2 Metro Vancouver Regional Growth Strategy Supplementing the ALR is the Regional Growth Strategy (RGS), most recently known as Metro 2040: Shaping our Future (Metro Vancouver, 2011). The RGS builds on the 1996 Livable Region Strategic Plan, which establish an Urban Containment Boundary that largely mirrors the ALR boundary. The RGS reinforces the boundary for areas for development. Metro Vancouver has imposed strict controls on development, most notably the urban containment area has effectively and successful stopped urban sprawl or any addition to the developable land base. There can be no net addition to the supply of vacant developable lands without an amendment, which

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GEORGE MASSEY TUNNEL REPLACEMENT PROJECT - LAND USE STUDY has proven to be very difficult. This land use control is very effective and is a major reason why land use impacts of new infrastructure are so contained.

Since the development of the Livable Region Strategic Plan (Metro Vancouver, 1996), land use areas have essentially stayed the same, with major investments in transportation infrastructure playing no role in new development lands becoming available. The Urban Containment Boundary has remained generally constant and land use within this area has densified. Since the adoption of Metro 2040 in 2011, land use controls have become even more entrenched. There have been few major amendments, with one notable exception being the Southlands site in south Delta. Even though this one site was approved it had very strict conditions imposed and was built with minimal density. 3.1.3 Municipal Official Community Plans Municipal Official Community Plans (OCPs) provide the longer-term vision for community development. Under the Local Government Act, an OCP is a statement of objectives and policies to guide decisions on land use planning and management, within the area covered by the plan, in a way that integrates land use considerations with other community strategies. OCPs usually look out into the future 20-30 years, and include provisions for scheduled (e.g., 10 years) updates. Periodic minor amendments may occur more frequently to reflect site-specific developments. OCPs ideally facilitate the coordination and integration of land use and transportation planning. Changes to OCPs require a comprehensive and lengthy community engagement process, a process that can take many years. Delta’s OCP identifies that expansion of the industrial land base is limited by the ALR and environmentally sensitive areas. Given these limits, Delta’s policies look toward fostering existing industries, attracting businesses from emerging industrial sectors, and facilitating redevelopment opportunities where older industries vacate, while using more environmentally sustainable features and green buildings. The OCP clearly and firmly controls land use areas and there are no plans for amendments to those areas for any reason, including as a result of the Project.

Industrial lands are adjacent to the George Massey Tunnel and strips of “Conservation Area” designated lands are nearby. Richmond’s OCP (City of Richmond, 2012) identifies supporting intensified employment lands including industrial and commercial employment as well as protecting environmentally sensitive lands. 3.1.4 Port of Vancouver Land Use Plan Vancouver Fraser Port Authority (VFPA) manages more than 10,000 hectares of water, more than 1,000 hectares of land and approximately 350 kilometres of shoreline within the Port of Vancouver. By legislation, VFPA is required to have a Land Use Plan, similar to a municipal OCP, which guides development of VFPA-owned and managed resources. VFPA’s most recent Land Use Plan was adopted in 2014 and includes eight different land and water designations (Port Metro Vancouver, 2014). VFPA has a strong voice in protecting the industrial land base. This is done through its plan, land holdings and other means. This land use control aims to ensure the industrial land base will remain as is or grow. VFPA maintains navigational jurisdiction in the North, part of the South, and the Middle Arms of the Fraser River near the Tunnel and holds a number of properties in the upland to support trade activities,

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GEORGE MASSEY TUNNEL REPLACEMENT PROJECT - LAND USE STUDY most of which are designated Port Industrial. Future use of these lands is likely to be similar to current uses, although more intensive use of sites on the South Arm can be anticipated to support the growth in Canada's trade. Appendix B provides a summary of forecast growth in the Port of Vancouver.

3.2 Industrial Land Base According to a planning study by Metro Vancouver, the current inventory of vacant industrial land is approximately 5,580 acres. However, this includes lands that have various constraints, including lack of servicing, poor soil conditions and inappropriate locations. There is very little prime industrial land left in the region, as all of the well-located industrial lands have been developed. The inventory of vacant lands tends to be remote or have a topography or servicing problem and is not well suited for industrial development. Demand for use of available industrial land in Delta is extremely strong now that the new South Fraser Perimeter Highway is complete. Demand for industrial land uses in the area will grow regardless of whether Roberts Bank Terminal 2 (RBT2) is approved or the Tunnel is replaced. The possible addition of RBT2 will make the already serious industrial land shortage even more severe. Much of the region's land, so important to international trade, is located on both sides of the proposed new bridge. As illustrated in Figure 1 below, vacant industrial lands are in short supply in most of the lower Fraser area (developed industrial lands are shown in dark purple; vacant industrial lands are shown in light purple). Just under 30 per cent of the region’s existing vacant industrial land inventory (all forms of lands with differing potential) is in Richmond, Delta and Tsawwassen First Nation (TFN) lands. Specifically, approximately 758 acres are in Richmond and 805 acres are in Delta and TFN lands. The TFN lands are a good example of lands that will develop quickly because they are available and they are surrounded by lands on which no development is permitted. About 18 per cent (1,000 acres) of the region’s vacant and designated industrial land is suitable for large-scale logistics-oriented development. Most of these lands are within Delta and Richmond, close to the deep water port, major highway and rail service and the urban centre. These limited-area lands are already in high demand. While the new bridge will reduce congestion and improve efficiency and travel times, the pace of development will continue largely unchanged. There is simply too little vacant land remaining for the market to be influenced by infrastructure improvements, and no expectation that other land use designations will change due to growth pressures or new infrastructure given past comparable examples. Unlike other land uses, which can add significant density within multi-level buildings, industrial land uses are very land intensive and most often single level. Thus the land shortage has a more pronounced consequence on the demand for industrial land. While there are some recent local examples of multi- level light industrial development, such approaches remain limited.

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Figure 1: Estimated Inventory of Vacant And Developed Industrial Lands (Metro Vancouver Planning Department, 2015).

3.3 Residential Land Base Shortage of developable land has resulted in increased residential density within designated urban areas. As increased density can address development constraints associated with a limited land base, the lack of vacant residential land is not deemed to be a serious restriction in residential growth in the lower mainland to date. The end result of the multiple jurisdictional land use plans is a limited land base available for urban development in Metro Vancouver. This limitation, reinforced through different means, has stayed in place for decades despite massive population growth and substantial new transportation infrastructure investments in the region. Because the Project does not open up new residential lands that are not already designated for development, its effect likely will be to increase residential land use density in the Delta and South Surrey areas, helping them to attain their highest and best use more quickly than without the Project. However, residential land uses are expected to remain unchanged.

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4 TRANSPORTATION AND LAND USE IN METRO VANCOUVER

4.1 Land Use and Transportation Theory Potential land uses, densities and associated land values have long been recognized as being a function of accessibility. Typically, as transportation access improves through infrastructure investments, the development potential and value of lands increases. Indicators of this general trend, include higher densities, higher quality projects, and shorter absorption periods. The advantages of improved access are often counter-balanced by travel over farther distances as long as there are development lands available. Transportation investments help address pressures on land development arising from growth in population and the economy. However, the more important consideration, with respect to how improved access can influence land use, is decisions by municipal governments whether or not they accommodate population growth and allow new lands to be developed or to permit increased density of existing urban lands. The majority of academic research on transportation and land use focuses on new and expanded highways like the proposed Project. This research suggests that improved travel accessibility can extend people’s impetus to live further away from their jobs, thereby having substantially the same travel commute time (the "Marchetti's Constant" (Marchetti, 1994)). Additionally, there is considerable available research about the influence of improved public transit (usually rail rapid transit) on real estate development. The impact on real estate is greatest when new transportation infrastructure creates accessibility to new areas with ample vacant lands that are designated and planned for future development. The least impact is when transportation improvement merely expands existing access and there is only limited vacant land on which to build (as is the case with the Project). Site Economics has reviewed numerous studies from the United States and other academic sources (see Appendix A) where in virtually every instance a new or expanded bridge has not changed land use patterns significantly, unless there was ample available and developable vacant land. Without vacant developable land, transportation infrastructure does not have a significant impact on urban land uses. As a result, transportation infrastructure has a major impact on the value of vacant developable land but only a marginal value impact on fully developed properties. In addition, the impact of new or expanded transportation infrastructure does not have a significant impact on land use planning when existing land use controls and planning regulations stay constant. Tolling new transportation infrastructure also further mutes its impacts.

4.2 Application to Metro Vancouver Generalizing these findings to all transportation improvement projects could lead to the conclusion that even more land becomes urban. In the unique case of Metro Vancouver, which has such strong demand for all forms of land uses and severe land shortages, most lands in the region are already developed or in the process of being developed. In Metro Vancouver, overall demand for real estate exceeds and overwhelms the limited supply of residential, commercial, industrial, and agricultural land. Real estate values increase and development proceeds based on the available land supply, and often regardless of new infrastructure, resulting in

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GEORGE MASSEY TUNNEL REPLACEMENT PROJECT - LAND USE STUDY congestion. As a mature urban area, infrastructure generally follows growth, rather than leading or shaping it. The addition of transportation infrastructure here does not and cannot increase the area of land available for development; it simply enables lands that are already designated for development to achieve their highest and best use faster. As a result, in the case of Metro Vancouver, further transportation investments that improve accessibility will only have a modest influence on the timing and nature of development forms and timing. Lands that are available for development (i.e. designated for projects in municipal and agency plans) will be the focus for development and redevelopment / intensification. In the context of improved access associated with the Project, it is anticipated that communities on the south side of the Fraser River would become denser, more urban and more appealing as complete communities. Although there is an interactive relationship between transportation infrastructure and land use, the development of transportation infrastructure and land use plans are not always fully coordinated or timed. Additionally, many factors beyond transportation infrastructure can affect land development patterns, such as real estate market trends, supply, demand, economic conditions, and other external forces. The net effect is that there can be a significant time delay between transportation infrastructure investments and land use development patterns. However, if an urban containment boundary is maintained, it can be reasonably anticipated that long-term development will focus on intensification of urban areas rather than 'sprawl'. For example, recent projects in Metro Vancouver, specifically the in 2009 (Port Coquitlam to Pitt Meadows), Port Mann Bridge in 2012 (Surrey to Coquitlam), and Golden Ears Bridge in 2009 (Langley / Surrey to Pitt Meadows / Maple Ridge) were completed several years ago, and while development in surrounding communities may not yet fully reflect these infrastructure investments, there have been no significant changes in OPCs or development patterns in the areas surrounding these crossings. Noting that these projects are examples of transportation improvements, not new transportation accesses, areas of allowable development (i.e. urban areas) have not substantially changed. Updates to OCPs and other plans have been more directed to allowing for higher density development within both established areas and newly developing areas (see Section 5). This form of intensification is consistent with expectations, given the limited supply and high value of lands in the region.

4.3 Land Use Restrictions: Looking Forward Looking ahead to a future with the Project, there is no indication of plans to amend municipal OCPs, remove lands from the ALR, or extend the Urban Containment Boundary. As such, it is assumed these fundamental land use tools will remain in force and it is anticipated that any land use policy and plan updates made by local governments will focus on intensification of established and developing urban areas. To the extent that agencies responsible for these policies and planning tools may contemplate such changes at some point in the future, these represent land use policy decisions that are beyond the scope of a single project or improvements to existing transportation infrastructure.

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5 COMPARABLE TRANSPORTATION PROJECTS The Project is a transportation improvement project; it does not provide new access such as would have been provided by Gate Bridge in 1938 (Vancouver to West Vancouver), the Massey Tunnel in 1957 (Richmond to Delta), or the Port Mann Bridge in 1964 (Coquitlam to Surrey). These historic infrastructure projects provided new vehicle access to areas that were previously inaccessible and which had large areas of vacant land available for development. In these cases, the transportation infrastructure provided new access to developable land and spurred new development. Comparable modern examples of improved transportation access to established areas include the Alex Fraser Bridge in 1986 (Richmond to Delta/Surrey), Pitt River Bridge in 2009 (Port Coquitlam to Pitt Meadows), Port Mann Bridge in 2012 (Surrey to Coquitlam, and Golden Ears Bridge in 2009 (Langley/Surrey to Pitt Meadows/Maple Ridge). As discussed in Section 4 above, virtually none of these recent bridge expansions had any notable impact on the size of the urban land base. Each of these projects is discussed in more detail in the sub-sections that follow. A key indicator of land development is the number and value of building permits. The following figures show the value of building permits across Metro Vancouver between 2001 and 2015. Figure 2 shows the values by sector, with residential being the dominant form of development, growing significantly between 2001 and 2007 and again from 2010 and 2015, reflecting the market cycle.

BuildingPermits in By Type $10 $9

Billions $8 $7 Residential $6 $5 Commercial $4 Industrial $3 Gov't / Inst. $2 $1 $0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: BC Stats Figure 2: Building Permits in Metro Vancouver by type (BC Stats)

Figure 3 shows the location of the total building permit values, with much of it being in Vancouver (including the University Endowment Lands (UEL)) and in Surrey. The values track the general strong and growing real estate development trends in the region for the past 15 years. As the chart shows, it is these municipalities that saw the most development. Municipalities like the Langleys, Maple Ridge/Pitt Meadows and the Tri-Cities, which had new transportation infrastructure, did not generally have a surge in development activity. Rather, they simply followed the general market trend.

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Metro Vancouver Total Building Permits by Sub-region

$10 Surrey $9 Langley (C & D) Billions $8 White Rock $7 Delta $6 Richmond $5 Vancouver / UEL $4 / New West $3 Maple / Meadows $2 Tri-Cities $1 North Shore $0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: BC Stats Figure 3: Metro Vancouver Total Building Permits by Sub-region (BC Stats)

5.1 Alex Fraser Bridge Opened in 1986, the Alex Fraser Bridge connects to Richmond/ via Highway 91 and the East-West Connector. The six-lane cable-stayed crossing with pedestrian/cyclist sidewalks on both sides was the longest in North America until 2005. Opening as a four-lane crossing, the additional two lanes opened one year later, in 1987, to accommodate the significant demand. Following the completion of the Alex Fraser Bridge, many logistics and goods handling firms in Vancouver moved to Delta and Surrey and developed large tracts of land zoned for industrial use, while Vancouver re-developed to higher and better uses the sites vacated by these firms. Lands on the south side of the Alex Fraser Bridge experienced moderate and controlled change, which was almost always anticipated within the existing land use designations. Almost 30 years later, today there remain intact areas of ALR near the Alex Fraser Bridge and along its corridor and land use designations have not notably changed. The strong link between transportation infrastructure and the value of employment-related land is seen with the example in Figure 4. This illustrates the average value of light industrial real estate in selected municipalities influenced by the Alex Fraser Bridge. The figure indicates that the value of employment related land in Delta (shown in green) increased in value in response to development afforded by improved access from the new bridge. While Vancouver (shown in dark blue) also experienced some increase in the value of employment-related land, the impact was indirect. For both Delta and Vancouver, changes to employment-related land values focused on development areas that were already designated for development and did not entail changes to the existing land use designations or expansion of the developable land base.

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AVERAGE LIGHT INDUSTRIAL (LAND & IMPROVEMENTS) VALUE

$2,500

$2,000

$1,500

$1,000

Value in 000s $500 Vancouver Burnaby Richmond $0 Delta New Westminster Surrey Maple Ridge BC Source: Site Economics and BC Assessment Figure 4: Impact of Alex Fraser Bridge on Industrial Land Values (Site Economics/BC Assessment Authority)

As illustrated in Figure 5, residential property values south of the Fraser experienced an immediate but short-term (one-year) spike following opening of the Alex Fraser Bridge. In subsequent years, residential property values in Delta remained relatively low until approximately 1994, mirroring but slightly lower than values in Burnaby and Richmond, and substantially lower than Vancouver.

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Figure 5: Impact of Alex Fraser Bridge on Residential Land Values (Site Economics/BC Assessment Authority)

In 2004, a study was undertaken to consider the influence of the Gateway Program on real estate, in the Metro Vancouver region, based on the experience of the 1986 Alex Fraser Bridge (Cushman and Wakefield, 2004). Assuming an adequate supply of vacant industrial and residential land suitable for development over the long term, the study drew the following conclusions: • There is a negative correlation between distance/travel time from Vancouver and suburban land values -- the less travel time, the higher the assessed values. • There was a significant increase in total land values in certain areas, particularly industrial, over several years in Delta and Surrey following the opening of the Alex Fraser Bridge in 1986. • The influence of transportation access improvements on land values generally focuses on land- intensive uses including industrial and single family residential. While increases in land values occur in concert with providing improved access, increases in land use density occur over the longer term. • An increase in overall land and improvement values of at least 2.5% per year was applicable to all communities directly served by the new infrastructure. • The influence of the new infrastructure on land values was primarily in the immediate vicinity of the bridge, and primarily in areas where zoned but undeveloped land was present – there must be large tracts of vacant lands for new or expanded infrastructure to effect significant changes. • The areas within the affected municipalities closest to the infrastructure improvements will experience the greatest increase in value.

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The analysis from 2004 supports the conclusion that improved transportation access will not substantially change land use patterns if there are limited vacant lands available, particularly if land use plans in place already take into account access to the regional transportation network.

5.2 Golden Ears Bridge Opened in 2009, the Golden Ears Bridge across the Fraser River connects Pitt Meadows and Maple Ridge to Langley and Surrey. The six-lane bridge and 14-kilometre road network provides a quick and convenient link for residents and businesses that reduces travel times and regional traffic congestion. The new bridge replaced the , a passenger/vehicle ferry that had been operational since 1957. Prior to the Golden Ears Bridge, Maple Ridge/Pitt Meadows land values had generally lagged behind the region due to lack of access. Following construction of the Golden Ears Bridge, the area has become an integral part of the region’s economy and vacant designated land values have increased by more than 10 per cent, moving closer to the regional average (see Figure 6).

Housing Starts in Study Areas - 2001-2015

3000

2500

2000 Langley City Langley District 1500 Pitt Meadows Maple Ridge

1000

500

0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Figure 6: Housing Starts in Study Areas 2001-2005

A large proportion of the area near the north and south side of the bridge and highway corridor remains within the ALR; there is no indication of any change in designated land use and only minimal additions to the developable land base. However, the 200th Street Interchange at the intersection of Highway 1 and 200th Street in Langley has become one of the most important and valuable highway intersections in the entire region, allowing the surrounding area to increase density and become a more urban and attractive community. Each corner was rezoned from industrial to high density residential and commercial. In addition, most of the planned but still vacant future single-family sites along on Highway 1 were repurposed as higher density residential in the form of townhouse and low rise. Housing starts of all types spiked dramatically in 2006 in Pitt Meadows and Maple Ridge, as Golden Ears Bridge construction launched (see Figure 7). However, following completion of Golden Ears Bridge construction in 2009, building permits and values declined (see Figures 7 through 9 below), consistent

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Pitt Meadows + Maple Ridge Housing Starts by Type

1,600 1,400

1,200 Apartment 1,000 Row/ Townhouse 800 Semi Detached 600 Single Detached 400 200 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Figure 7: Pitt Meadows and Maple Ridge Housing Starts by Type

Figures 8 through 10 illustrate building permit values for Maple Ridge, Pitt Meadows, and Langley Township respectively, by sector type.

BuildingPermits ($000) in Maple Ridge By Type

$300,000

$250,000 Millions $200,000 Residential Commercial $150,000 Industrial $100,000 Gov't / Inst.

$50,000

$0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: BC Stats Figure 8: Building Permits in Maple Ridge by Type (BC Stats)

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BuildingPermits ($000) in Pitt Meadows By Type

$90,000 $80,000 $70,000 Millions $60,000 Residential $50,000 Commercial $40,000 Industrial $30,000 Gov't / Inst. $20,000 $10,000 $0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: BC Stats Figure 9: Building Permits in Pitt Meadows by Type (BC Stats)

Building Permits ($000) in Langley Twp By Type

$400,000 $350,000 $300,000 Millions Residential $250,000 Commercial $200,000 $150,000 Industrial $100,000 Gov't / Inst. $50,000 $0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: BC Stats Figure 10: Building Permits in Langley Township by Type (BC Stats)

Figures 11 and 12 show the value of total building permits (residential, commercial, industrial, instructional) between 1998 and 2015 for: the Metro Vancouver region, City of Maple Ridge, City of Pitt Meadows, and Township of Langley. As can be seen in Figure 11, Metro Vancouver total building permit values increased in absolute terms during this timeframe and included both periods of rapid growth (2002-2008) as well as a period of sharp decline (2008-2009) reflecting the overall economic downturn.

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As for the three individual sub-areas, Figure 12, which shows the rate of change year over year, illustrates that Pitt Meadows experienced the greatest variations between years, although this is partially due to the small size of the community and the impact of single projects on a small market. Maple Ridge values followed the pattern of the region, but overall were lower. And Langley Township values almost exactly tracked the trend for the region. These figures illustrate that the opening of the Golden Ears Bridge in 2009 did not coincide with any notable increase in building permit values in any of the three study areas beyond the general growth rate experienced by the wider Metro Vancouver region, further supporting the conclusion that the land effect of improved transportation infrastructure is muted.

Total Building Permits Value $

10,000,000 9,000,000 8,000,000 7,000,000 6,000,000 Metro Van. 5,000,000 Maple Ridge

4,000,000 Pi Meadows 3,000,000 Langley Township 2,000,000 1,000,000 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Figure 11: Total Building Permits Value 1998-2015

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Total Building Permits Value Annual Rate of Change

350% 300% 250%

200% Metro Van. 150% Maple Ridge 100% Pi Meadows Langley Township 50% 0% -50% -100%

Figure 12: Total Building Permits Value Annual Rate of Change 1998-2015

5.3 Gateway Program In 2006, the Province of British Columbia established the Gateway Program as part of a broader suite of investments implemented in response to the effects of population and employment growth in Metro Vancouver. The Program was designed to relieve congestion and to improve mobility for all modes of transportation along key commuter and goods movement routes. The Program complemented TransLink’s Golden Ears Bridge Project and included the twinning of the Port Mann Bridge and related Highway 1 improvements, the South Fraser Perimeter Road in Surrey/Delta and North Fraser River Perimeter Road/Pitt River Bridge in Coquitlam/Pitt Meadows/New Westminster (bridge and eastern roadway improvements completed in 2009). The effects of the Pitt River Bridge were combined with that of the Golden Ears Bridge, discussed in Section 5.2 above. The effects of the other two projects are discussed below. 5.3.1 South Fraser Perimeter Road Completed in 2013, the 40 km long South Fraser Perimeter Road (SFPR), now known as Highway 17, is a new four-lane expressway along the south side of the Fraser River. It is part of Highway 17 in Metro Vancouver, which connects the Tsawwassen Ferry Terminal in southwest Delta to 176 Street (Highway 15) in north Surrey. SFPR provides a continuous and efficient route to serve the port facilities, rail yards and industrial areas along this key economic corridor. It also facilitates access to borders and the Tsawwassen ferry terminal. The SFPR connects Highway 1 in Surrey with DeltaPort in the west. It also connects to Highways 1, 91, 99 and the Golden Ears Bridge, and provides fast and efficient access between the BC interior and Vancouver Island.

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SFPR offers goods movers an efficient transportation corridor, while restoring municipal roads as community connectors by reducing truck and other traffic on municipal road networks in Delta and Surrey, improving quality of life for residents and local businesses. SFPR has had a strong positive impact on real estate, mostly in Delta. In the past, much of the land bordering the corridor was considered to be somewhat remote from the central areas of economic and employment activity. The only access was the small, congested, two lane River Road. Traffic demand on this road exceeded capacity on a regular basis and resulted in severely restricted access and a lower- than-average trend of building permits as compared with the rest of the region. As intended, SFPR has addressed this access constraint and has resulted in an accelerated rate of industrial development and higher quality industrial development (See Figure 13). Similar to other examples provided, SFPR did not result in new access but rather improved access. As such, as with other access improvement projects, while the pace and quality of industrial land use development has changed, SFPR has not led to substantial changes to land use designations. Figure 13 also illustrates that the value of residential building permits following the completion of the SFPR in 2013 also increase, although the rate of growth has been much lower than that of industrial land in the value of industrial land.

Building Permits ($000) in Delta

$300,000

$250,000 Millions $200,000 Residential Commercial $150,000 Industrial $100,000 Gov't / Inst. $50,000

$0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: BC Stats Figure 13: Building Permits in Delta (BC Stats)

A review of major studies of the logistics industry conducted by Site Economics (Site Economics 2015) for the Port of Vancouver found that improved highway access and highway connections encouraged denser, land intensive, high quality forms of industrial development. With the South Fraser Perimeter Road now in service for over two years, these types of development outcomes are being seen throughout the Tilbury and Sunbury Industrial area of Delta in particular as well as along other industrial areas near or adjacent this new highway.

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5.3.2 Port Mann Bridge Highway 1 Project The Port Mann Bridge is a 10-lane cable-stayed bridge connecting Surrey and Coquitlam, and areas beyond, as part of the Highway 1 transportation corridor. This Project comprised a new Port Mann Bridge and widening Highway 1, including extending HOV lanes to 202 Street in Langley. The new bridge opened in 2012 and the full project was completed in 2015. The old Port Mann Bridge opened in 1964, originally carrying four lanes; in 2001 an eastbound HOV lane was added by moving the centre divider and by cantilevering the bridge deck outwards in conjunction with a seismic upgrade. Even with the improvements, the limited bridge capacity was a major source of congestion in the lower mainland. The influence of the project on land use was, as expected, limited to those areas that had already been designated development areas. The improved access associated with the Port Mann Highway 1 Project, increased the pace of development and absorption of vacant lands. It also enabled key areas and town centres to densify and make better use of their lands. It did not substantially change or expand land areas designated for development. Subsequent to the access improvements, ALR boundaries and other land use controls have remained largely unchanged. Figures 14 and 15 illustrate the change in building permits and housing starts in Surrey before and after the project.

Surrey Housing Starts by Type 6,000

5,000

4,000 Apartment Row/Townhouse 3,000 Semi Detached

2,000 Single Detached

1,000

0

Figure 14: Surrey Housing Starts by Type

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Building Permits ($000) in Surrey By Type

$1,600,000 $1,400,000 $1,200,000 Millions Residential $1,000,000 Commercial $800,000 Industrial $600,000 Gov't / Inst. $400,000 $200,000 $0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: BC Stats Figure 15: Building Permits in Surrey By Type (BC Stats)

5.4 Summary There are numerous examples that clearly illustrate that major transportation improvements in Metro Vancouver have not had a substantial influence on land use and have marginally accelerated the rate of development within existing land uses. This muted response to access improvements is in part due to policy and in part due to the lack of vacant developable lands in the area. As such, the influence of access improvements on land use is primarily on the rate and density of development and not on the location of development and quality of life in the already developed service area. As shown in Figure 16, the ongoing presence of the ALR in close proximity to urban areas and to most major highways, interchanges and bridges, including areas that have seen significant transportation infrastructure improvements in the past 10 years, illustrates that new transportation infrastructure has not significantly impacted its boundaries.

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Figure 16: Agricultural Land Reserve

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6 TransLink Land Use Study A Metro Vancouver staff report (February 2016) raises concerns that the Project could have implications for regional growth management, including “related effects on the distribution and growth of traffic across the Fraser River, as well as localized effects on communities, industrial development, population and employment growth distribution, and agricultural lands.” The anticipated Project effects from the April 2014 Coriolis Consulting Corp. report for TransLink entitled, “Land Use Generation for RTS Alternatives: Impact of the George Massey Bridge on the Land Use Forecasts to 2045 for the TransLink Base Case and RTS Alternatives” are summarized below. The report draws the following conclusions: 1. The George Massey Bridge and associated road network improvements will not significantly impact the total rate of population or employment growth in the entire region for a sustained time. 2. We anticipate that South Delta and South Surrey will likely capture slightly higher shares of the total Richmond, South Delta, and South Surrey ground-oriented multi-family market (and therefore population growth) than in the absence of the new Bridge. This will translate into slightly higher shares of population and population-serving employment (e.g. retail and service employment). There may also be a small shift in population growth from high-density nodes (e.g. Yaletown, Lonsdale, Metrotown) to South Delta and South Surrey. 3. The George Massey Bridge and associated road network improvements could cause a shift in the pace of light industrial development that occurs in Richmond, Delta (e.g. Tilbury, Tsawwassen First Nation), and parts of South Surrey in the short term. We expect that these areas may develop at a slightly faster pace in the short term, with a corresponding decrease in the pace of development in South Burnaby and North Surrey. However, these areas (and the entire region) are likely to be constrained in terms of industrial land supply over the forecast period in any case, so by 2045 there is not likely to be a discernable difference in the total amount of light industrial employment in these locations. As noted above, based on the empirical evidence, in our opinion this shift will mainly be localized. People who would consider living in Richmond, South Delta, or South Surrey and who would, in the absence of a new Bridge, choose to live in Richmond to avoid the bridge congestion may now consider living in South Delta or South Surrey.

Any major new transportation investment might add more localized pressure on ALR lands (or other non-development lands), but in the context of continuing region-wide pressures. While one might conclude that a new Massey bridge could increase development pressure on non-urban lands in south Surrey or south Delta, such pressure already exists even in communities (such as Abbotsford) that are well removed from the direct impacts of new bridge construction in the central part of the region.

Many potential transportation (road and transit) improvements in Metro would create the possibility of pressure (meaning economic pressure or political pressure) to convert land to urban use, so If maintaining the ALR continues to be an important regional and provincial priority, then it is robust land use policy and regulation more than avoiding transportation improvements that are needed to protect the lands.

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7 CONCLUSIONS There is very strong demand, and limited supply, for all land use types in the region, even without new transportation infrastructure. Growth is already occurring on nearly all lands available, specifically south of the Fraser, with agricultural lands restricted from urban development because of the ALR and Urban Containment Boundary. Massive growth and demand for housing is already occurring, due to the ongoing population growth, and one million new people are expected to move to the region within the next three decades. Housing costs are already very high, which is a reflection of the strong demand and limited supply of residential land. There is a severe lack of industrial land in the region, with existing ongoing demand and some industrial players relocating outside of B.C. (primarily to Calgary), which acts as an inland terminal for the Port of Vancouver. The proposed Roberts Bank Terminal 2 will further increase demand by expanding container import throughput. The existing industrial land shortage puts intense pressure on development such that the influence of the Project will be a distant second to the central issue of growth. Vacant land in Delta is already very valuable and is quickly developing despite current capacity challenges across the Fraser River. Over the past 10 years the demand for land in the region has been so great and the supply so small that vacant sites have already been considered for development either by the approving authorities or the real estate community. The urgency of the land shortage and the pressure it creates far exceeds any possible pressure on land use, created by improved transportation services. Based on the findings of the 2014 TransLink report (Section 6) and the lower mainland experience from recent road-based transportation projects in the region (Section 5), it can be reasonably concluded that the influence of the Project on land use will be limited to faster absorption and higher density development in the short term but no measurable change in land use or medium- to long-term population and employment distribution. Land uses will continue to be dictated by planning regulations. Municipal community plans can be updated to reflect the Project, but this does not mean a significant change in land use designations or urban sprawl. Rather the following is expected to occur:

• Existing areas within the Urban Containment Boundary, such as Ladner, could be considered for (re)development and intensification, while surrounding lands in the ALR are unchanged and retained for agriculture. • A higher and better use of urban sites such that there is more density in Ladner town centre and White Rock/South Surrey. Higher density development becomes viable in suburban locations with better roads and transit. • Faster absorption rate, particularly for designated industrial lands, in both Delta and Richmond. This in turn will support long-term economic growth that otherwise would have accrued outside of the region. • Delta in particular will benefit, with continued growth in logistics oriented industrial economic and employment activity that supports community goals of having more jobs located closer to homes and increases the property tax base.

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• Pressure on residential lands may arise; however there is already significant pressure and without substantial vacant developable land, there can be no measurable impact on land use patterns. • Residents who are most likely to move or be influenced by the Project will be self-selecting residents who want to live in a lower density area. People who want to live in an urban area will not move to this area because of the new bridge. • To a very limited degree, some activities that would otherwise occur in the more central / urban areas (Vancouver, Burnaby, Richmond) would shift and occur in more outer areas (Delta, Surrey) due to improved transportation access. However, because of the limited land shortage in the region, virtually all of these lands will be developed in the medium term in any case.

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8. REFERENCES

B.C. Ministry of Agriculture. (Summer 2010 & 2011). Metro Vancouver Regional District Land Use Inventory Regional Report. Bowes, D. R., & Ihlanfeldt, K. (2001). Identifying the Impacts of Rail Transit Stations on Residential Property Values. Journal of Urban Economics, 50(1), 1-25. Cervero, R. B., & Landis, J. (December 1992). Assessing the impacts of urban rail transit on local real estate markets using quasi-experimental comparisons. Transportation Research Part A Policy and Practice 27(1), 13-22. Cervero, R., & Duncan, M. (June 2001). Rail Transit's Value-Added: Effects of Proximity to Light and Commuter Rail Transit on Commercial Land Values in Santa Clara County, California. Prepared for the Urban Land Insitute, National Association of Realtors, Washington, D.C. City of Delta. (2010, September 3). Official Community Plan: Bylaw No.3950. Updated to February 16, 2016. Delta, BC, Canada: City of Delta. City of Delta. (n.d.). Delta Truck Routes. Retrieved from City of Delta: http://delta.ca/docs/default- source/engineering/hardcopymaps/truck_routes_map.pdf?sfvrsn=2 City of Richmond. (2012, November 19). Official Community Plan: Bylaw No.9000. Updated to July 20, 2015. Richmond, BC, Canada: City of Richmond. Coriolis Consulting Corp. (April 2014). Land Use Generation for RTS Alternatives: Impact of the George Massey Bridge on the Land Use Forecasts to 2045 for the TransLink Base Case and RTS Alternatives. Cushman & Wakefield. (November 2004). Real Estate Effect Assessment of The Gateway Program, Greater Vancouver, BC. Government of British Columbia. (2002, November 1). Agricultural Land Reserve Use, Subdivision and Procedure Regulation. B.C. Reg. 171/2002, O.C. 571/2002. Victoria, BC, Canada: Queen's Printer. Government of British Columbia. (2012). The Pacific Gateway Transportation Strategy 2012 - 2020. Victoria, BC, Canada. Lewis-Mogridge Position. (2016, January 14). Retrieved from Wikipedia: https://en.wikipedia.org/wiki/Lewis%E2%80%93Mogridge_Position Marchetti, C. (1994). Anthropoligical Invariants in Travel Behavior, Technological Forecasting and Social Change. International Institute for Applied Systems Analysis. Laxenburg, Austria: Internal Publication. Retrieved from http://www.cesaremarchetti.org/archive/electronic/basic_instincts.pdf Metro Vancouver - Planning, Policy and Environment. (2013, November). The Agricultural Land Reserve and the Regional Growth Strategy Land Use Designations. Map of the Month. Burnaby, BC, Canada. Metro Vancouver - Regional Planning and Agricultur Committee. (2014, March 7). Status of Metro Vancouver Agricultural Land Reserve with Respect to Farming. Map of the Month. Burnaby, BC, Canada. Metro Vancouver. (2011, July 29). Regional Growth Strategy, Bylaw No.1136, 2010. Metro Vancouver 2040: Shaping Our Future, Updated to October 30, 2015. Burnaby, BC, Canada: Metro Vancouver. Metro Vancouver. (2014, June). Bulletin #8: Jobs in Metro Vancouver 2011, Stratistics Canada National Household Survey. Figure 1, Table 3. Burnaby, BC, Canada. Metro Vancouver Metropolitan Planning, Environment, and Parks Department. (2011, November 15). Metro Vancouver 2010 Industrial Lands Inventory. Burnaby, BC, Canada: Metro Vancouver.

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Metz, D. (Jun 23, 2008). The Limits to Travel: How Far Will You Go? Routledge. Port Metro Vancouver. (2014, October 28). Port Metro Vancouver Land Use Plan. Vancouver, BC, Canada. The Center for Transit-Oriented Development. (September 2004). Hidden in Plain Sight: Capturing the Demand for Housing Near Transit. The Center for Transit-Oriented Development. Site Economics. (October 2015). The Industrial Land Market and Trade Growth in Metro Vancouver. TransLink. (2008, July). Transport 2040. A Transportation Strategy for Metro Vancouver, Now and in the Future. New Westminster, BC, Canada: Translink. Zahavi, Y. (May 1974). Traveltime Budgets and Mobility in Urban Areas. Washington, D.C. 20590: U.S. Department of Transportation, Federal Highway Administration, Office of Highway Planning.

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APPENDIX A - TRANSIT AND REAL ESTATE DEVELOPMENT RESEARCH Real estate prices reveal the degree to which rail-transit investments confer benefits. As long as there are finite supplies of land near rail stations, theory holds, those wanting to live, work, or do business near transit will bid up land prices. The benefits of having good connectivity to the rest of the region – i.e., being accessible – get capitalized into the market value of land. The findings are related to bus service and buses that serve the stations. Buses will cross the bridge and access transit stations for very fast and efficient travel from Delta to downtown and the urban core. The following is a summary of article publications on the topic. Assessing the Impacts of Urban Rail Transit on Local Real Estate Markets Using Quasi-Experimental Comparisons, Robert Cervero and John Landis • When other complementary forces, such as a healthy regional economy, available and attractive sites for development, and pro-development zoning regulations are in place, office projects located at or near transit stations enjoyed a slight office rent premium over their freeway-oriented competitors. • In addition, office projects near rail stations tended to be slightly larger, and lease up more rapidly than office projects at the non-rail control sites. Identifying the Impacts of Rail Transit Stations on Residential Property Values, David R. Bowes and Keith R. Ihlanfeldt

• Empirical investigation of the impact of rail station proximity on property values may not have not fully investigated the negative and positive factors influencing this relationship. • Total effects vary a great deal with neighborhood income level, distance to downtown, and distance from the station. • Large, positive direct effects are found in high-income neighborhoods between one-quarter and three miles of a station, with the largest effect occurring in the one-half to one mile ring at 12 miles from the CBD. • Beyond one-quarter mile of a station, negative direct effects are generally restricted to low-income neighborhoods. • Negative crime effects are found mainly close to downtown, especially where the station has parking. This result suggests that people who might use public transit to get access to a neighbourhood to commit crimes will not travel much beyond the already high-crime areas. The Effect of Anticipated Transportation Improvement on Residential Land Values, John F. McDonald, Clifford I. Osuji

• The results show that in 1990 an increase of 17% in residential land values within one-half mile of the Chicago to Midway Airport transit station sites can be attributed to improved access by the transit line. Transit's Added Value, Urban Land Institute by Robert Cervero, Michael Duncan • Between 1997 and 1999, an estimated 4,500 housing units and some 9 million square feet of commercial office floor space were added within walking distance of the Tasman West corridor in Santa Clara, California. • Between 1998 and 2000, light-rail ridership rose 11 percent and the number of commuter rail passengers jumped 25 percent.

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• Among the instruments introduced to leverage transit-oriented-developments have been tax- exempt financing, public assistance with land assembly, and overlay zones that permit higher than the norm densities. • Mountain View officials recently rezoned 40 acres of industrial land to accommodate more than 500 housing units adjacent to the Whisman LRT station; created a transit overlay zone that allowed higher densities, up to a maximum of 50 percent, within 2,000 feet of the station. Results included 500 housing units adjacent to the Whisman LRT station and a 359-unit complex of townhouses, condominiums, cross from the downtown Mountain View station • The southern California-based Irvine Company currently is constructing several thousand luxury apartments within walking distance of LRT stations in north San Jose without any specific development incentives. • Recent voter approval of 2000 Measure A, by a large 70 percent margin, a half-cent sales tax is being extended 30 more years to finance billions of dollars in new transit investments, including the extension of the Bay Area Rapid Transit (BART) heavy-rail system to downtown San Jose. • Another study, by Rachael Weinberger—a transportation planner at New York’s Port Authority— used data for Santa Clara County over a longer stretch, from 1984 to 1998. Based on a hedonic price model (that statistically netted out the influence of proximity from other factors that influence rents), she found a 3.3-cent-per-square-foot monthly lease premium for commercial properties within a quarter mile of light-rail stops. Hidden in Plain Sight: Capturing the Demand for Housing Near Transit, Reconnecting America’s Center For Transit-Oriented Development

• In some regions more density may be needed around transit stations, whereas in other regions more transit may be required to better serve existing high densities. • Higher-density transit-oriented development projects that are walkable and that contain a good mix of mutually supportive uses will have benefits beyond increasing transit ridership. This is demonstrated in regions such as Washington D.C. and Denver, where a high percentage of transit zone residents also walk to work and real estate values have risen substantially. Summary of Research and Case Studies The case studies support four major conclusions: • First, any study of the importance of transit-oriented development should consider regional context. In some regions more density may be needed around transit, whereas in other regions more transit may be required to better serve existing high densities. In still other regions both density and transit may be sufficient but there may not be the pedestrian connectivity that makes riding transit an easy and appealing alternative, or the transit system may not provide the regional connectivity that makes it a viable transportation option for residents. • Second, not every region will experience the same magnitude of demand for higher-density housing near transit, but where the conditions are right transit-oriented development could accommodate a significant share of regional growth, even in those regions that only have small transit systems. • Third, building higher-density, walkable, transit-oriented development projects will have benefits beyond increasing transit ridership. • Finally, specific policies will have to be put in place to ensure that the market delivers a product that will help realize the potential demand.

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In general, the results of the analysis clearly show increased value except in some low income areas. All impacts can be enhanced through the 3D’s – Density, Design, and Diversity. The 3D’s are most important in any area where income levels are moderate or the quality of the neighbourhood is at risk. In these areas there are tremendous potential benefits from well designed, density-focused developments that bring together quality pedestrian access and venue, quality services and diversity of use.

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APPENDIX B - PORT OF VANCOUVER OVERVIEW AND IMPACTS Port of Vancouver Operations The Port of Vancouver is Canada’s largest and busiest port, a dynamic gateway for domestic and international trade and tourism, and a major economic force that strengthens the economy. The Port facilitates trade with 160 world economies, and handles about 135 million tonnes of cargo each year. Almost 95% of the Port’s total volume serves Canadian import and export markets. Including indirect and induced effects, in round numbers, the total impacts of ongoing operations at businesses related to the Port of Vancouver across Canada are: • 98,800 jobs; • $9.7 billion in Gross Domestic Product (GDP); • $20.3 billion in economic output; and • $6.1 billion in wages. The Port of Vancouver is the largest port in North America by tonnage, and the third largest on the west coast by container volume. The west coast ports compete with each other for business, and their ability to compete is impacted by a variety of factors. Container traffic through Canada’s Pacific Gateway is expected to double over the next 10 to 15 years to meet West Coast container demand by 2030. The Container Capacity Improvement Program is the Vancouver Fraser Port Authority’s long-term strategy to deliver projects to meet anticipated growth in container capacity demand until 2030. The Program looks at the following opportunities for creating container capacity: • Improvements that can be made to existing terminals and infrastructure to accommodate growth; and • New infrastructure that may be required as demand continues to increase. Vancouver Fraser Port Authority is planning now to ensure that capacity is in place to meet the anticipated demand and support Canadian trade growth for decades to come. The Roberts Bank Terminal 2 Project is a proposed new three-berth container terminal at Roberts Bank in Delta. If built, Terminal 2 would provide 2.4 million TEUs (twenty-foot equivalent units) of container capacity per year to meet forecast demand until 2030. This would approximately double demand for logistics related real estate in Metro Vancouver, if approved. As the key port in Canada for traffic to and from Asia, Port of Vancouver has excellent prospects for growth over the short, medium, and long term. The ability to realize those prospects depends, in part, on the availability of suitable and properly located industrial land and transportation infrastructure. Port Infrastructure and Terminals The following figure shows the marine and off-dock terminals in the region. Growth in trade activity and more intensive use of port lands will mean that the connecting regional transportation corridors will themselves be more intensively used in the future. These transportation corridors will require active management and investment to provide the additional capacity needed to accommodate growth efficiently and effectively, and in a manner that addresses the impacts of transportation on surrounding communities.

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(Port Metro Vancouver, 2014) Port Container Imports and Exports Approximately 70% of the deep-sea laden container imports that arrive by ship at Metro Vancouver’s container terminals are transferred to rail at the deep-sea terminals. The ratio is lower (about 50%) for all export containers (laden and empty) that arrive at the deep-sea terminals by rail.

These ‘on-dock’ rail transfers occur to and from trains, which are assembled and/or routed through one of two intermodal yards (these being the CN facility at Port Kells in Surrey and the CPR in Pitt Meadows). Most of the inbound containers (imports) are transported long distances by rail to distribution centres in Calgary, , Montreal, and Chicago.

Some 30% of deep-sea terminal container imports leave the deep-sea terminals by truck. The vast majority of these trucked containers are destined to or are originating from logistics facilities in the Metro Vancouver region to be destuffed (imports) or stuffed for export. The (off-dock) buildings and lands where these trucked containers are loaded or emptied in Metro Vancouver are important logistics facilities which range from large scale distribution centres to both large and small export consolidators, import consolidators as well as individual exporters and importers. The goods inside these containers are sometimes manipulated (organized by destination or consolidated for export), processed (sorted, value added, etc.), transloaded directly to/from highway trailers and/or otherwise warehoused temporarily. Much of the imported freight in containers leaving the deep-sea terminal by truck is transloaded directly (or sorted and consolidated and reloaded) into larger highway trailers (at logistics facilities), which are then loaded onto rail cars and ‘piggybacked’ to their ultimate destinations elsewhere in North America. Some are also delivered regionally.

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The containerized freight that is handled within the Metro Vancouver region is impacted by logistics, labour and land costs. In some instances, the containers that are shipped east to Calgary or elsewhere are broken down there, and then some goods may be transported back to Vancouver if required.

The high cost of land and labour, coupled with congested rail and highway traffic, has made Metro Vancouver a less favourable location for some distribution centre operations. Accordingly, pro-active steps need to be taken to enhance Metro Vancouver’s goods handling capacity and PMV’s overall competitiveness. Location and transportation infrastructure are critical because they reduce travel times and costs, and improve the efficiency of the distribution economy.

Port of Vancouver Forecasts of Key Sectors Container traffic through Canada’s Pacific Gateway is expected to double over the next 10 to 15 years. Current projections indicate over five million twenty-foot equivalent units (TEUs) of additional capacity will be needed to meet West Coast container demand by 2030. As illustrated in the figures from the Vancouver Fraser Port Authority’s Land Use Plan, forecasts indicate that growth is anticipated across almost all commodity and business sectors currently handled at the port. The extent to which the Port facilitates and manages the anticipated growth will depend largely on its ability to develop the required additional infrastructure and service capacity within the constraints provided by the Port’s physical context, as well as the need to grow in a sustainable manner that considers the interests of local communities. PORT TRADE FORECASTS (Port Metro Vancouver, 2014)

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The Port of Vancouver handled 140 million tonnes of cargo in 2014, up 3% from the previous year's 135 million tonnes. The 2014 Statistics Overview tabulates the volume of cargo shipped through the Port of Vancouver over the past three years (2012 - 2014). Various breakdowns are provided, including: imports, exports, major commodities, containerized cargo, principal trading economies, vessel arrivals, and cruise volumes. Container traffic growth is the fastest growing sector and the only one that has a pressing need for real estate. The other forms of trade particularly exports have surplus loading capacity and generally do not require significant new real estate or changes in existing land use. Increased traffic is projected across all of the major business segments and cargo types handled at the Port of Vancouver. However, the largest increase will come from the container sector. While there are many inherent uncertainties with long term forecasting, the forecasts are intended to be a tool to guide, coordinate and identify the use of existing land and water assets in a manner that will allow for sustainable growth to meet future opportunities. Vancouver Fraser Port Authority monitors trade volume and adapts to changing market conditions to ensure that there is sufficient flexibility to deal with new opportunities. In some instances and for some commodities, improvements to terminal efficiencies may be sufficient to avoid or postpone the need to develop vacant port lands as throughput increases. This is not the case with container throughput expansion with its high growth rate and the sector’s integral need for industrial facilities and support systems within the supply chain, such as road and rail systems, security areas, etc. While non-container import and (primarily) export cargoes are integral to the fabric and objectives of the Port, it is expected that bulk and break bulk land requirements in the future will be modest in comparison to those required by the container sector, and it is expected that most of these (non- container traffic land demand) generally will be accommodated within the existing commodity-specific land base.

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APPENDIX C - ASSUMPTIONS & LIMITING CONDITIONS

This land use study has been prepared for the Ministry of Transportation for the purpose of providing an estimate of the impact of the George Massey Tunnel Replacement Project on land use and development in Metro Vancouver. It is not reasonable for any person other than the person or those to whom this report is addressed to rely upon this without first obtaining written authorization from the client and the author of this report and all liability to all such persons is denied. The data and statistical information contained herein were gathered from reliable sources and are believed to be correct. However, these data are not guaranteed for accuracy, even though every attempt has been made to verify the authenticity of this information as much as possible. If any economic, market or financial value or measure has been expressed herein it is in Canadian dollars.

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APPENDIX D - PROFESSIONAL RESUME SITE ECONOMICS LTD.

Richard Wozny, Principal

Experience Site Economics Ltd. provides real estate development consulting services to developers, land owners, investors and the public sector. We have completed over 1,000 major projects with a cumulative value of over $100 billion. We have very extensive experience in all forms of large scale commercial, industrial, residential and institutional land development projects. Richard Wozny, the principal, has conducted hundreds of development and financial studies of shopping centres and commercial districts. He has worked on the development of thousands of acres of industrial buildings, including complex logistics parks, thousands of acres of residential sub divisions and hundreds of high density residential buildings and office towers. Richard has also conducted hundreds of store location and feasibility studies for retailers and financial institutions. Richard combines a creative project vision with pragmatic development analysis. Past Employment and Education Richard’s past work experience includes: Vice President and Manager of Advisory Services, Cushman & Wakefield LePage Inc.; Principal, Site Economics Ltd.; Manager of Retail Development for Western Canada, Marathon Realty Company Ltd.; and Senior Consultant for Shopping Centre Developments, Thomas Consultants Inc. Richard completed a Master’s Degree in Regional Science at the University of Pennsylvania, Philadelphia, PA, a Master’s Degree in Religion at Temple University, Philadelphia, PA, and a Bachelor’s Degree in Philosophy at the University of British Columbia, Vancouver, BC. Strategic Real Estate Services

§ Market Analysis § Proforma / Discounted Cash Flows

§ Financial Analysis and Site Valuation § Property Acquisition and Disposition Strategies

§ Highest and Best Use Studies § Strategic Review of Redevelopment Options

§ Development Feasibility Studies § Shopping Centre / Downtown Revitalization

§ Development Strategies & Optimization § Market Impact Studies for Major Developments

§ Supply and Demand Assessments § Market Input for Land Use Planning

§ Absorption and Price Assessments for Major § Site Selection and Location Assessment for Retailers and Developments Landowners

Site Economics Ltd. Suite 1500 – 701 West Georgia Street

Vancouver, BC V7Y 1C6 Canada

tel: 604.250.2992 email: [email protected] / website: www.siteeconomics.com

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