Property Tax Assessment Guide

cwieler

Property Tax Info Kit

Property Assessments of Conservation Lands
A Guide for Land Trusts and Conservation Land owners
Including case studies, references and bibliography of research on conservation land values
Elk River, NCC protected site
Land Trust British
Alliance of Columbia
THIS INFORMATION KIT DEVELOPED AND PRODUCED IN 2006 WITH FUNDING FROM:Introduction
This following Information Kit was developed by the Land Trust Alliance of BC with additional information provided by the BC Assessment office and Alan Kotila, Accredited Appraiser with DR Coell & Associates. Funding was generously provided by the Victoria Foundation, the Vancouver Foundarion and the Real Estate Foundation of BC. As covenants only became a conservation tool for land
trusts in the mid 90’s, there is limited market evidence to measure the impact of conservation covenants on property assessments. The case studies in this guide were selected from the Greater Victoria region; however this research has brought to light important information, and steps that landowners and land trusts should take to ensure that BC Assessment is advised of the details of the covenant’s impacts on market value. The Land Trust Alliance of BC believes that this information is useful for a variety of interests, including landowners considering a conservation covenant, the land trusts that assist in protecting these significant natural or cultural sites, and assessment staff in BC communities. The BC Assessment Authority wishes to ensure that covenants are duly considered. Many thanks to Jennifer Paton for providing the case studies, TLC for their assistance with the property data, John Pebbles and the staff of BC Assessment for information on their policies, and Alan Kotila for providing a review and report on the data in addition to his own knowledge of appraisals and assessments of covenanted properties.
Definitions
Land Trust (Land Trust Alliance of British Columbia) A non-profit, charitable organization committed to the long-term protection of natural and/or cultural heritage. A land trust may own land itself, or it may enter into a conservation covenant with a property owner to protect or restore natural or heritage features on the owner’s land. Land trusts also engage in stewardship, restoration and management of lands. The words “land trust” and “conservancy” are often used interchangeably. Conservation Covenant (Land Trust Alliance of British Columbia) A voluntary, written legal agreement between a property owner and either a government body or one or more land trust organizations designated by the Surveyor General, on behalf of the Minister of Agriculture and Lands, that sets out specific restrictions or requirements that the landowner will uphold to ensure conservation of all or parts of the land. It is registered on title and “runs with the land” (it continues to exist on title after the property is sold or transferred, binding future owners). Property (Assessment Act) Includes land and improvements Subject Property (BC Assessment) Property that is the subject of assessment and taxation. Improvements (BC Assessment) Any building, fixture, structure or similar thing constructed or placed on or in the land, or water over land, or on or in another improvement (i.e. houses, roads). This report may be copied by land trusts noting its source. LTABC July 2006 with assistance from BC Assessment, and Alan Kotila, Appraiser..
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Contents
The Assessment Process in BC ……………………………. 2

Assessments on Properties with Conservation Covenants. 3

Assessments on Properties owned by Land Trust ………… 6

Other Tax Consequences……………………………………. 8

Case Studies ………………………………………………….. 9

Bibliography of Research on Property Tax ……………….. 11

Further Resources on Conservation ………………………. 15
The Assessment Process in BC
An ancient cedar shades the forests floor on Gabriola Island. Islands Trust Fund.
BC Assessment produces independent and uniform property assessments annually for all property owners in the province. Assessors are required, by the Assessment Act to determine the actual (market) value of a property for assessment purposes. Actual value means “the market value of the fee simple interest in land and improvements” Market value is defined by the Appraisal Institute of Canada as follows: “The most probable price which a property should bring in a competitive and open market as of the specified date under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus.” The valuation date is July 1 based on the property condition as of October 31; the notice is mailed at the end of the year. Most properties are to be assessed at actual value. Exceptions include dams, power plants, infrastructures such as pipelines, farm property and managed forest lands. Once a property’s actual value has been determined, it is used as a base for the tax rolls created by municipal and rural taxing authorities. The tax rate is calculated as a percentage of the net taxable value of the subject property, that is, actual value less exemptions. The applicability of various exemptions depends upon a property’s location and other unique characteristics such as the property’s ownership, use, or features. Staff at BC Assessment is required to consider all factors which affect the market value of a property. If a covenant is registered against a property, they must consider if there is an impact on the value of the property. Whether or not, or to what extent a covenant will impact the actual value of the property will vary based on the restrictions stated in the specific covenant. The difficulty in measuring the impact of covenants is that there is limited market evidence to date and covenants vary. BC Assessment values all properties in British Columbia and by necessity uses mass appraisal techniques. Thus, detailed appraisals such as those required by the Canadian Wildlife Service for Ecological Gifts, would need to be undertaken by an independent appraiser.
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Lands Subject to a Conservation Covenant
Section 219(1) of the Land Title Act authorizes the provincial government, a Crown corporation, local governments or a local trust committee under the Islands Trust Act to work together with a private landowner to create a conservation covenant on the owner’s property. Additionally, s. 219(3)(c) of the Land Title Act allows nongovernmental organizations designated by the Minister of Agriculture and Lands to enter into conservation covenants with private landowners as well. These covenants are registered on title at the Masters Greenway & Wildlife Corridor Conservation covenant held by Comox Valley Land Trust Land Title Office and “run with the land,” which means that they remain in effect even if the property is sold or transferred to a new owner in the future.
VALUATION FOR ASSESSMENT PURPOSES Conservation covenants usually create obligations and/or restrictions on a landowner’s use of some or all of a parcel of land, which may include restrictions on the type and extent of improvements that can be created on the land. Section 19(7) of the Assessment Act requires that the assessor take into account any terms or conditions contained in a covenant registered under s. 219 of the Land Title Act when estimating the actual value of a property. In making this determination, the Assessment Act requires the assessor to consider whether the covenant’s restrictions affect the price that the land would sell for in the open market. The assessor reviews the best available information about the value of the property compared to similar properties not subject to the restriction and comparable properties subject to the same or similar restrictions under s. 219 covenants. If the assessor determines that the existence of a covenant affects the property’s market value, then the assessed value of the property will be adjusted accordingly. The effect the covenant has on the subject property’s value depends on conclusions that are drawn from the marketplace. The existence of a covenant will result in no impact on property assessed values, for instance, for properties classified entirely as farm land. This is because when they are assessed the land is valued using regulated rates based on the production capabilities of that land as farm land. Consequently, the presence of a conservation covenant will have no effect on the value of the land. Another example of value being unaffected by a conservation covenant is where there is a tax exemption under the Natural Area Protection Tax Exemption Program (“NAPTEP”) pursuant to the Islands Trust Act. Section 19(7.1) of the Assessment Act stipulates that properties that qualify for these tax exemptions under the Islands Trust Act do not have their conservation covenants taken into account when the assessor estimates their actual value.

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EXEMPTIONS FROM TAXATION The only property tax exemption currently available for land subject to a conservation covenant is NAPTEP. Created by Part 7.1 of the Islands Trust Act, this program provides a property tax exemption for qualifying property to the extent of 65% of its assessed value. For property to qualify for the exemption, it must be 1. in an eligible area designated by the Island Trust Council; 2. land which has one or more natural area values or amenities prescribed in the Islands Trust Natural Area Protection Tax Exemption Regulation, B.C. Reg. 41/2002; and 3. subject to a conservation covenant under s. 219 of the Land Title Act in favour of either the Islands Trust Council, a local trust committee or the Islands Trust Fund Board. The property owner must also apply for and obtain a natural area exemption certificate (“NAEC”), which is necessary to receive the tax exemption. Furthermore, property with a NAEC is deemed to be in Class 1 – Residential, which may result in a lower tax rate being applied by the taxing jurisdiction than if it were classified in another class. 1 WHAT TO DO WHEN A CONSERVATION COVENANT IS REGISTERED ON TITLE 1. After registering a conservation covenant at the Land Title Office, a landowner should send a copy of the covenant to the local BC Assessment Area Office. If it is a fairly simple covenant, it may suffice to send a copy of a property map and the covenant restrictions only. If the owner has appraisal evidence to estimate the impact of the covenant, this should be submitted at the same time. 2. If the property is sold to a new landowner, the conservation covenant still applies because it is registered on title and “runs with the land.” The new landowner should receive a copy of the covenant from the covenant holder. If the previous year’s Notice of Assessment seems to not reflect the impact the conservation covenant has on land use, the local Area Office should be contacted to determine if the assessor considered the covenant’s impact on the subject property’s value. As part of this process, the new owner may want to determine if the assessor was provided with a copy of the covenant, reviewed its terms and compared its effect with similar properties in the market. 3. If a landowner believes that the subject property has not been assessed accurately, a phone call to the local Area Office may clear things up. However, if this does not prove satisfactory, the landowner may request an independent review before the Property Assessment Review Panel (PARP). In this case, a Notice of Complaint must be submitted containing the grounds for appeal (i.e. the assessed value should be reduced to reflect the impact of the covenant) and must be filed with the local Area Office responsible for the property’s assessment by January 31 of the taxation year for which the assessment applies.
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Information provided directly by BC Assessment Office
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4. A decision of the PARP may be appealed to the Property Assessment Appeal Board (PAAB). An appeal to the PAAB must be filed before April 30th following the decision of the PARP. 5. For appeal purposes, the onus is on the landowner (possibly with the land trust’s assistance) to prepare evidence that supports his or her contention that the covenant affects the subject property’s value. The PARP will consider whether there is evidence that the covenant restricts the “market value” of the land and, if so, by how much. If the PARP finds evidence of reduced value, the assessed value will be reduced accordingly and the adjustment to value will be in place by the time property tax notices are delivered. 6. Property assessments are completed annually, thus any reduction in a subject property’s assessed value connected to the conservation covenant will be reviewed annually. Assessments in subsequent years will depend on the market evidence available for that year. POTENTIAL IMPACTS ON VALUE FROM CONSERVATION COVENANTS Impacts on value can be nominal to major. Examples of items in covenants which have potential (fact dependent) impacts include the following: 2 Logging: If a covenant does not allow logging and there is a prime merchantable timber on a large acreage property, this will most likely indicate a significant reduction in market value. However, if the site has young growth with no current timber value, the adjustment would be minor. Similarly, if the property is a poor growing site (for merchantable timber) or is remote with very high logging costs, the impact may be minor. Restriction on Subdivision: If a property can be subdivided and there would be a demand for the resultant lots and the owner decides to place a covenant stopping subdivision, this would have a major impact on value. However, if the costs of the development are high (rough topography, difficulty in obtaining water, remote location, etc.) and lot prices are low, a subdivision may not be economical to proceed with. In that case, the covenant would not have a major impact on value. Restriction on Building Size and Placement: If, on a waterfront property, a covenant is put in to not allow building near or within view of the water, this could have a significant impact. However, if the covenant states that you cannot build in a wetland and typically an owner would build on the high ground, there likely would be no impact on value. Agricultural Restrictions: Covenants may restrict the types of crops which could be planted or other land use practices. Depending on the nature of the soil, the farming practices in the area, etc., the impact of the covenant could be quite variable. Nuisance / bureaucracy: The conservancy group must inspect the property a minimum of once a year and enforce the provisions of the covenant. This typically in the marketplace would be a nuisance and may reduce demand or value.
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information provided directly from Alan G. Kotila, D.R. Coell & Associates INC
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Lands Owned by a Land Trust
Private lands may be either sold or donated to a land trust by a landowner who wishes to protect the natural and cultural values of their property well into the future. This means that the conservancy itself becomes the registered owner of the subject property. VALUATION FOR ASSESSMENT PURPOSES
When valuing a property, the assessor must take into account the property’s present use, location, size, topography, shape and replacement cost, the age and condition of all buildings, the selling price of the subject property or comparable properties in the area, and any other circumstance affecting the value of land and improvements.
Wycliffe Wildlife Corridor in the Kootenays, owned by TLC The Land Conservancy of BC
Ownership, in and of itself, by a land trust does not affect a property’s actual value. However, the land trust’s actions as an owner combined with what the market dictates will influence the subject property’s assessed value. For example, the preservation of a seabird-nesting site, restoration of a wetland or prevention of road construction may all act to impact on a property’s assessed value in different ways. Furthermore, a land trust may decide to enter into a conservation covenant with either a government body or another designated land trust organization, which could further impact the subject property’s actual value (see below). Because property taxes are calculated according to a subject property’s assessed value, any increase or decrease in the property’s value as a result of the land trust’s actions as an owner will affect the amount of property taxes due. EXEMPTIONS FROM TAXATION The exemptions that may be available for a subject property depend on its location. In rural areas (areas outside of any municipality), the Taxation (Rural Area) Act applies. Section 15(1)(q) of the Taxation (Rural Area) Act provides an exemption for (q) land and improvements if the land and improvements are (i) owned or occupied, and (ii) used exclusively by a nonprofit organization for activities that are of demonstrable benefit to all members of the community where the land is located Determination of whether a property is entitled to an exemption under this provision is up to the area assessor. Consequently, any questions in this respect should be addressed to your local BC Assessment Area Office.
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Many land trusts in rural areas have reported that they have been successfully exempted from property tax under s. 15(1)(q) because they are “nonprofit” organizations whose land conservancy activities provide a demonstrable benefit to the surrounding community. It is, however, important to note that this exemption does not include land that is leased or rented to other occupiers. Section 15(1)(q) requires that the subject property be “owned or occupied and used exclusively” by the nonprofit group. If the subject property is situated within a municipality, both the Local Government Act and the Community Charter apply. Sections 809(3) and (4)(a) of the Local Government Act are both relevant. Section 809(4)(a) gives the regional district the authority to issue permissive tax exemptions for (a) land or improvements, or both, owned or held by, or held in trust by the owner for, an athletic or service organization and used principally for public athletic or recreation purposes While this section gives regional districts the authority to create tax exemptions, it does not require that they do so. Therefore, this exemption may or may not apply to property owned by a land trust. It is up to the regional district, typically upon application by the property’s owner, to determine whether an exemption will be provided and, if so, the amount of the exemption. Section 809(3) makes clear that the regional district’s board of directors must adopt a bylaw by at least a 2/3 majority vote to create a s. 809(4)(a) tax exemption. Section 224(2)(a) of the Community Charter provides that tax exemptions may be offered for: (a) land or improvements that (i) are owned or held by a charitable, philanthropic or other not for profit corporation, and (ii) the council considers are used for a purpose that is directly related to the purposes of the corporation This section has been applied to numerous trust-owned properties. However, as with the exemption under the Local Government Act, this section is purely permissive – council is permitted to grant such an exemption, but is not required to do so. Consequently, land trusts may or may not receive a property tax exemption, depending on whether council passes a bylaw to grant such an exemption. Moreover, s. 224(4) stipulates that such an exemption must be renewed after 10 years. 3
NOTE: The Community Charter applies to all municipalities except the City of Vancouver. Within the City of Vancouver, s. 396(1)(c)(i) of the Vancouver Charter may provide a tax exemption for property owned by a land trust. It states that an exemption exists for: (c) Real property (i) if (A) an incorporated charitable institution is the registered owner or owner under agreement, either directly or through trustees, of the real property, and (B) the real property is in actual occupation by the incorporated charitable institution and is wholly in use for charitable purposes.
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Other Tax Consequences
Transferring property ownership to a land trust and creating a conservation covenant both have significant legal and economic consequences. Additional information may be found in the resources provided at the end of this document. Be sure to contact your own financial and legal advisors before transferring property or entering into a conservation covenant. Beyond property taxes, and taxes due upon purchase or sale, donations of land or interests in land (a conservation covenant) may also affect income taxes and capital gains. Property Purchase Tax (transfer tax) is not payable by a land trust or a municipality, but is payable by the province. GST is payable by a land trust and a municipality, but is not
Martin Williams stands by his majestic forest, donated to the Salt Spring Island Conservancy
payable by the province. (except under specific and complicated situations – ask your lawyer) A registered charity receives a 50% reimbursement of GST.
DONATIONS OF ECOLOGICALLY-SENSITIVE LAND The Ecological Gifts Program provides a way for Canadians with ecologically-sensitive land to protect natural areas and leave a legacy for future generations. Since 2000, donations to approved conservation charities of ecologically-sensitive land, or easements, covenants and servitudes on such land, have been eligible for special tax assistance. Under the Ecological Gifts Program, Environment Canada certifies that the land in question is ecologically sensitive, and an expert panel certifies the value of the donation. Under the Ecological Gifts Program, in addition to the charitable donations tax credit (for individuals) and the charitable donations deduction (for corporations) available to a donor in respect of a donation of ecologically-sensitive land to a conservation charity, the capital gain that has accrued on the land is included in calculating the donor’s income at only one-half the standard capital gains inclusion rate. Currently, the standard capital gains inclusion rate is 50 per cent, however the capital gains inclusion rate for donations of ecologically-sensitive land has recently been reduced to zero. This measure will apply to donations of ecologically-sensitive land made on or after May 2, 2006.
However, please note that “charitable institutions” is a much more limited category than “nonprofits”, and that the subject property must be “in actual occupation” by the charitable institution and “wholly in use for charitable purposes” [emphasis added].
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Case Studies
All the case studies below are private properties subject to a conservation covenant. As you will see, these cases are very unique, and the only conclusions that can be safely drawn are a) the covenant and any additional valuation data must be sent to the BC Assessment office b) a review and discussion of the covenant with staff from BC Assessment, especially with professional appraisal assistance, can affect the assessed value
Highlands subdivision (rural area) The samples are residences on 26 lots ranging in size from 3 – almost 7 acres. The subdivision is in a rural area, near Victoria, with no piped water or sewer system. A covenant restricts the building envelope. Outside of that envelope no other buildings are to be constructed and the land left in a natural state. The covenants were registered in January 1998. A comparable development of properties without covenants ranging from 2-7 acres in a nearby area was reviewed from 1999 – 2003. There appeared to be little if any difference in assessed values between the covenanted and non-covenanted properties. It is unknown which if any landowners submitted the covenant to the BC Assessment office. Langford Property (commercial/residential municipality outside of Victoria) This property, split by a road, is two lots, both with a covenant prohibiting subdivision. The first is classified as farm, and thus has the lower assessment. The second allows for a larger building, but has additional covenant restrictions on soil, native plants and tree removal. This lot reviewed with two comparable units on the same street: there was a similar increase in the assessments for all 3 properties over 3 years. Esquimalt Property (high density municipality next to Victoria) This is a comparison of four bare land strata lots, now each improved with a residence. A covenant is in place on part of two of the lots to protect a Garry Oak grove. Thus the trees or vegetation cannot be removed nor buildings located in this area. The covenants were put in place in Dec 1999. Two of the lots have a covenant area and two do not. The two covenanted lots have a lower assessment than the two non-covenanted ones, but the covenant is not the only difference in comparing the lots. However, the Authority appears to have adjusted the land component in the 10% – 20% range because of the covenants. Acreage property in North Saanich This covenant was registered in November 2000. The main impact is that the site is no longer subdividable, although prior to the covenant a 5-6 lot subdivision was possible. It appears that BC Assessment was not informed of the covenant until 2003. The original 2003 assessment was $502,000. After being informed of the covenant, the land assessment was amended to $420,000 or 16.3% adjustment for the covenant.
A highlands residence with a covenant protecting native vegetation and restricting further buildings.
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Rural Gulf Island property This covenant restricted previously allowable subdivision, and restricted farm use, logging and building development. After receipt of the covenant, and discussions with the owner and an appraiser, the total assessment was reduced 13.4% due to the impact of the covenant. Rural Waterfront acreage Again, this covenant prohibited subdivision, previously allowed, in addition to further restrictions on buildings and vegetation. After a review of the covenant, discussions with the owner and an appraiser, the authority reduced the assessment by 53.5% Rural Gulf Island property – no development This Gulf Island property is 10.18 acres, with a covenant that restricts any development or buildings. Initially, in the year of the covenant’s registration, the assessment remained similar to prior to the covenant. However, after the landowner appealed, and a review of the covenant by the Assessment Authority occurred, the assessment was reduced by 61.13%. CONCLUSIONS 4 ◊ It is critical for the owner and/or conservancy group to inform BC Assessment of a proposed covenant. If an appraisal or other supporting evidence of a loss due to a covenant is available, it should be provided. If the owner or conservancy group considers the assessment with the covenant in place is unfair, there is an appeal process. Assessments change annually and thus there should be a monitoring policy to ensure the assessment of properties with covenants remain at market value. Our analysis indicates if BC Assessment is informed, the assessment will be reduced if they consider it warranted and supported by market evidence. Assessments can be reduced up to 50%, though most will be much less, probably in the 10-20% range. For those covenants with only nominal impacts, there may be no adjustments. A covenant on a property may positively impact the value of adjoining properties. However, it is unlikely BC Assessment will adjust the assessments of those properties upwards.

The data available is limited and the difficulty is covenants and the properties are quite variable. However, it is possible to obtain reductions in assessments, where warranted, and therefore property taxes by providing BC Assessment with sufficient data.
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Alan G. Kotila, D.R. Coell & Associates INC.
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Annotated Bibliography of Research, by date

INCORPORATING NATURE AND GREEN SPACES INTO DEVELOPED AREAS Including effects on subject and neighbouring property values Olewiler, Nancy. The Value of Natural Capital in Settled Areas of Canada. Published by Ducks Unlimited Canada and the Nature Conservancy of Canada, 2004. ABSTRACT: The report stresses the need to invest in science that will measure, value and monitor ecological goods and services. With this understanding of the products, costs of production, and market value of products, the planet’s natural capital can be run like any other efficient business. Four case studies illustrate how the market value of natural capital can be estimated using several economic methods; economic damages from the loss of natural capital, costs avoided by preserving natural capital, and willingness-to-pay approaches. The case studies estimate land values of $195/ha per year in the Grand River Watershed of Ontario, $65/ha/yr for the Upper Assiniboine River Basin in Saskatchewan and Manitoba, and $126/ha/yr in the Mill Bay watershed of P.E.I. These baseline studies represent what the natural area is worth in monetary terms, and can then be compared to potential developments and tax revenues of proposed projects. The analysis also emphasizes the importance of policy to encourage private landowners towards conservation of their natural capital. Pdf version available through DU & LTABC Saucer, Amanda. The Value of Conservation Easements: The Importance of Protecting Nature and Open Space. Atlanta: West Hill Foundation for Nature, Inc., 2002. ABSTRACT: Highlighting some of the services that natural open space provides, this discussion assigns monetary value to several different habitats. This is not without the reminder that natural systems have multifunctional roles, making it difficult to accurately assess true value. The first case of Atlanta, Georgia describes urban development as the major threat to forests, wetlands, and riparian areas. The case assigns value to the environmental services provided by these landscapes:; improved air quality (US$47 million/yr), waste treatment (US$240 million/yr), and water management (US$2.36 billion). This case study also reports 520% higher property tax revenue on land with trees in the landscape. The Wyoming example points to land fragmentation from developments as having an impact on the migratory routes of large animals essential to the surrounding national parks. The annual income of $255 million in non-consumptive use of these parks can be bargained against future developments threatening these routes. The case study in Iowa describes a situation where the majority of all natural landscape has been converted to agriculture, and 92% of this is privately owned. A program has been established where there is no property tax collected on land that is maintained as forest, native prairie, wetland, or other wildlife habitat. The discussion concludes by stressing the importance of protecting highly productive natural areas, like riparian corridors, where the most benefits as far as ecosystem services are provided.
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Geoghegan, Jacqueline. “Capitalization of Open Spaces into Housing Values and the Residential Property Tax Revenue Impacts of Agricultural Easement Programs.” Agricultural and Resources Economic Review April 2003. Oct. 2005 http://www.findarticles.com/p/articles/mi_qa4046/is_200304/ai_n9189233 ABSTRACT: The study looks at agricultural easements in three Maryland counties to determine whether there is a difference in property values surrounding protected, and unprotected open space. The analysis incorporates a variety of variables by using a spatial database and a hedonic model. Unprotected open space is sometimes a negative externality, as the areas might be unsightly, odorous, or insect ridden. Permanently protected open space has a positive impact on neighbouring homes as two of the three areas show an increase in property value. This added value is only partially captured by an increase in property tax revenue, but this money could be used to purchase additional agricultural easements to further support and enhance the programs. ENS, Humanity Loses $250 Billion a Year in Wild Habitat, Washington, DC, August 9, 2002. ABSTRACT: Stressing a need to account for natural capital, the article uses three case studies to show that wild ecosystems provide goods and services that are 14 to 75% higher than the same area of land converted to human use. Unfortunately, these net benefits to the public cannot be captured like the short-term economic gains often accompanying land conversion. With a global network of nature reserves the planet could ensure environmental goods and services worth $400 trillion/year more from the same area of land converted to human use. Hudson, Mark. Ground Work: Investing the Need for Nature in the City. Published by Evergreen, 2000. ABSTRACT: In most situations where environmental goods and services are accounted for, the benefits of urban greening outweigh the costs. Beneficial/monetary value is given to green urban areas for the services of filtering particulate matter from air, and reducing water pollution. Also, urban trees reduce the volume of storm water that would otherwise need treatment by municipal infrastructure. In some situations natural areas protect against flooding, thus reducing costs associated with flood damage repair. When urban parks are well planned they can need minimal maintenance, chemical, and water inputs, leading to more savings. The article stresses a holistic evaluation of these benefits by incorporating the extended social benefits parks can create. These include: recreation opportunity, community meeting space, and a venue to re-establish a connection to nature. By involving community in the process of planning and implementing green space, an opportunity to create social ties and empower a community is present. Some of the costs or challenges outlined in the report include a need to balance different recreational uses in natural spaces, satisfying a variety of perspectives regarding the aesthetics of naturalized areas, and the time and costs associated with establishing new naturalized spaces.
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Lerner, Steve and William Poole. The Economic Benefits of Parks and Open Spaces: How Land Conservation Helps Communities Grow Smart and Protect the Bottom Line. Published by the Trust for Public Land, 1999. ABSTRACT: With the economics to back it up, the Trust for Public Land has made a convincing argument for cluster style developments that includes neighbouring parks and open space. Multiple examples illustrate how taxes on properties neighbouring green belts, both business and residential, bring in significantly more revenues than comparable properties elsewhere. One study in Massachusetts described an initial rise in property taxes around park space, but in the long term a decrease to home owners, as the demand for infrastructure like roads, sewers, water, police, schools, and other services is reduced. The report goes so far as to say that open space left undeveloped subsidizes municipalities because the land generates more taxes than they demand in services. Exploring the value of tourism, recreation, biodiversity, and quality of life, the article concludes that conservation is an investment rather than a cost. Muir, Tom. Rising Property Values on Hamilton’s West Harbourfront: Effects of Environmental Restoration on Real Estate Prices. Ontario: Environment Canada, May 1998. ABSTRACT: The analysis of properties surrounding the west harbour front in Hamilton found that originally there was no additional value ascribed to these homes for proximity to either the water or parks. After a variety of clean-up efforts, to both parks and the waterfront area, these homes increased in value significantly faster that the average. A home in the harbour front area was worth an average of $41,942 before clean up, and $90,068 afterwards. In the control group, where houses were similar in regards to age, size and number of rooms, the value of homes over the same time period went from $55,889 to $74,434. Quayle, Moura and Stan Hamilton. Corridors of Green and Gold: Impact of Riparian Suburban Greenways in Property Values. University of British Columbia, April 1999. ABSTRACT: This is an in depth study of property values adjacent to and near riparian greenways. Three hypotheses are tested and all are found to be quite true; 1) properties adjacent to greenways have higher values, 2) this added value rapidly declines as distance from greenway increases, and 3) residents and owners will suggest a higher value due to proximity than empirical evidence describes. Three models where used to analyse data collected from the four cases. The first method uses the sale value of homes in and around 1996 as the dependent variable, and four independent variables; age of building, square floor area, lot size, and number of bathrooms. The second model uses the same independent variables but uses the assessed property value (1996) as the dependent variable. The third model uses the assessed value of land only as the dependent, and the independent variables of lot size and proximity to golf course. The study in Cougar Creek, Delta found adjacent properties had a value 11.9% higher than the control group using the first model. Using the second model there was minimal difference, suggesting that the assessed property value does not ascribe any increase due to proximity. The third model was not used conclusively in any of the case studies. Overall the study reveals a 10–15% increase in value on properties adjacent to riparian greenways.
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Muir, Tom. Community Green Spaces are Worth Money: An Economic Argument for Parks, Natural Areas and Greenways. Ontario: Environment Canada. 1996 ABSTRACT: This brief information package highlights the potential revenue generated by parks and green space. These benefits include higher property values and tax revenues of surrounding areas. In Windsor a home is worth $7.98 more with each foot it is closer to a park. Parks can also create commercial tax revenues as both residents and visitors spend money on recreation activities, special events, and outdoor concessions. Parks also create jobs in their development, implementation and maintenance. When properly planned they can reduce public spending on infrastructure like water, sewers, roads, and schools. “Chapter 1: Real Property Values.” Economic Impacts of Protecting Rivers, Trails, and Greenway Corridors: A Resources Book. 1995, Fourth Edition. National Park Service. October 2005. http://www.nps.gov/pwro/rtca/propval.htm ABSTRACT: Providing numerous examples of how green space increases property values to surrounding homes, the article also cautions that the nature of this green space is important. Three characteristics are identified as key to effective green space; 1) the area highlights open space, rather than highly developed facilities, 2) there is limited vehicle access, but still some recreational access, and 3) there is effective maintenance and security. In a brief discussion of how increased property tax generated by surrounding properties can pay back the acquisition of a green space, several warnings are made. Assessed values often lag behind market values, and property tax revenues can lag behind increases in property value due to legislation limiting real estate tax increases. For new developments, incorporating green space into the design will most likely lead to quick approval and fast sales of new homes. Lacy, Jeff. “An Examination of Market Appreciation for Clustered Housing with Permanently Protected Open Space.” Department of Landscape Architecture and Regional Planning. 1990. University of Massachusetts/Amherst. October 2005 http://umass.edu/larp/crm/LacyMarket.html ABSTRACT: Two styles of development are compared; conventional development, otherwise known as suburban sprawl, and New England pattern development, individual house lots clustered amidst commons and green space. The study tests the hypothesis that market appreciation rates for clustered housing, with protected open space, can be equal or greater than that of the conventional developments. Analysing both original and re-sale values of homes between 1980 and 1988 in Concord MA, appreciation went up 21% for the cluster style developments, and 18.4% for the rest of Concord. In Amherst, MA two different developments were compared. The two groups were built around the same time, have the same proximity to schools, similar size, and both are serviced by municipal sewer and water. In the base year the average sale value of the two developments were almost equal. In the 21-year span of study, the homes in the conventional development appreciated 19.5% annually, and in the open space development, the rate of appreciated was 22% annually. The conclusion is that there is a higher rate of return on investment for developments that incorporate protected green space into their design.
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Additional Conservation and Tax References:
Agricultural Land Commission (re covenants on ALR lands) http://www.alc.gov.bc.ca/ BC Assessment’s website at http://www.bcassessment.bc.ca/ BC Assessment Authority Appraisal Fact-Sheet http://www.bcassessment.bc.ca/publications/index.asp British Columbia Surveyor General List of agencies designated to hold covenants under s. 219 Land Title Act: http://www.ltsa.ca/sgd_home.htm Environment Canada – Ecological Gifts Program http://www.cws-scf.ec.gc.ca/egp-pde Hillyer, Ann, Judy Atkins and John B. Miller. Appraising Easements, Covenants and Servitudes. (2006: Ottawa: North American Wetlands Conservation Council, Canada) Hillyer, Ann and Judy Atkins, Greening Your Title: A Guide to Best Practices for Conservation Covenants (2005: Vancouver, West Coast Environmental Law Research Foundation) http://www.wcel.org/resources/publications/ Hillyer and Atkins, Giving it Away: Tax Implications of Gifts to Protect Private Lands (2004: Vancouver, West Coast Environmental Law Research Foundation) http://www.wcel.org/resources/publications/ Hillyer and Atkins, and Arlene Kwasniak, Conservation Easements, Covenants and Servitudes in Canada, A legal Review, Report No 04-1, 2004 North American Wetlands Conservation Council (Canada) in partnership with Environment Canada, Canadian Wildlife Service Islands Trust Fund http://www.islandstrustfund.bc.ca With information on the NAPTEP Program Land Trust Alliance of British Columbia offers a multitude of resources on covenants and related topics, including a Registry of covenants and lands owned by conservancies in BC http://www.landtrustalliance.bc.ca W.A. Taylor, Crown Lands, a History of Survey Systems, 2nd ed. (Victoria: Surveyor General Branch, Ministry of Crown Lands, 1990) Description of the evolution of the survey system in B.C., available at: http://www.ltsa.ca/Historical%20Publications/Crown%20Lands%20%20%20A%20History%20of%20Survey%20Systems.pdf
LTABC 204-338 Lower Ganges Road, Salt Spring Island, BC. V8K 2V3 250-538-0112 – 250-538-0172 fax email: info@landtrustalliance.bc.ca