Being able to predict future property value is the key to making money from real estate investment. In this article we discuss how city planning affects values in the medium term.
City planners intend to achieve the best results for their stakeholders, the residents. However property value is relative. Hence value added in one area can drive worth down in another.
We outline how Toronto became so expensive. Then we briefly review current city planning and policy in our hometown, Calgary.
Toronto: From Disorganized Mess to Highest Prices
Nineteenth century Toronto evolved on the basis of a rudimentary plan that did little more than define its location. By the early 1900’s the city was in an unorganized state with no structured plan for development, let alone transport.
Wealthy landowners created private streets, even avenues leading to their mansions, while the poor languished in squalor we would find acceptable today. There was little allowance made for public green space. The result is a densely occupied central city grid that stumps city planners today.
Post World War II Development in Toronto
The authorities took an active plan after World War II. The automobile allowed hitherto unknown freedom of movement, and accordingly the city sprawled outward. City planners ensured a steady supply of fresh land for developers. This ensured house prices stayed in line with average household income.
However the demographics changed sharply after 2006 when people began to move back downtown. This caused inner-city single-home prices to rocket and affordability to suffer among mid-income people. There were three reasons for this according to Canadian Real Estate Wealth.
# A new Greenbelt Plan circled the metropolitan area protecting environmentally sensitive areas. It forced people to move further out or pay more for metropolitan properties
# A new Growth Plan envisioned 25 densely populated urban centres comprising ‘compact, vibrant and complete communities’ in state of art facilities.
# A rehash of Transport Policy moved away from private vehicle ownership towards coordinated public transport further encouraging more inner-city living.
How Calgary is Taking a Different Approach
Calgary’s city planning policy is more neighbourhood-focussed according the 2019 City Planning Policy. It pays attention at local level and enables individual communities to develop more democratically.
It also strives to balance supply and demand by assuring the availability of new land for development, These factors help ensure our city remains a great place to put down roots and invest.
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