One of the often cited reasons given to support Vancouver real estate valuations as the most unaffordable in the world is that of land constraint. The argument focuses on the fact that the slice of land that is the Lower Mainland is bordered to the east by the Rockies and to the west by the Pacific, inhibiting expansion. Hence land demands a premium as it is in relatively short supply.
As is the case with so many of these arguments (like the hot Asian money argument), it contains an element of truth. Yet even this most sacred of half-truths is being strapped to the altar by new legislation.
The First Nations Commercial and Industrial Development Act came into force in 2006. From their FAQ page:
”The reserve lands of many First Nations have the potential to be used in large-scale commercial and industrial projects….(such as) large real estate developments. Given the amount of money required to get such large-scale projects off the ground, they are usually developed in partnership with private sector investors.
FNCIDA enables a First Nation that has decided to pursue a large-scale commercial or industrial on-reserve project to ask the Government of Canada to develop regulations applying to a specific project on a specific piece of reserve land.”
In other words it seeks to cut red tape for First Nations looking to develop reserve lands. As noted by this article from the Mission City Record (hat tip to DR), it ”allow(s) them to greatly expand their populations of non-aboriginal tenants”and it is ”about to set off a building boom on First Nations-owned land in the Lower Mainland”.
First in line to cash in on a new streamlined system for developing First Nation land is the Squamish Nation with plans to build 12,000 condos on its reserve lands in Vancouver and West Vancouver. Given that this roughly equals the total number of condos sold in the Greater Vancouver area in a given year, this is a very significant amount of inventory that will come online at some point in the next few years.
Expect more to follow. The Mission City article does a great job of delving into the issues surrounding the loss of city tax revenue when 25,000 people up and move to an area with very different and arguably more advantageous tax laws.