Externalities and the Urban Fringe The Effect of British Columbia’s Agricultural Land Reserve on Land Values Tracy Stobbe, PhD Candidate University of Victoria

Policy Context  Agricultural Land Reserve (ALR) is essentially a provincial zoning law that forbids non-farm uses of designated agricultural land Allows one dwelling/house per parcel Prohibits sub-division  Agricultural Land Commission (ALC) makes decisions on applications for exclusions, sub- divisions and non-farm uses

Map of the ALR

ALR History  Prior to 1973, 6,000 hectares of farmland being developed annually  Only 2.7% of the province is capable of growing a reasonable range of crops – only 0.6% is class 1  Legislation passed in 1973 establishing the ALR and ALC 4.7 million hectares in reserve  Major restructuring in 2002 – regional panels

Current Issues  Exclusions and inclusions over time ALR has increased in size since 1973, but overall agricultural capability has decreased  Land excluded mostly in GVRD, Fraser Valley, Okanagan and Vancouver Island  Land included mostly in the north of the province  Speculation in land from developers  Hobby farms and other urban pressures

Data  Data sets from the BC Ministry of Agriculture, BC Assessment, the regional governments, and private companies  GIS spatial data and land value data (both assessed and market) Including data on residential properties nearby  e.g. square footage, number of bedrooms, etc.  Agricultural land use information and ALR designation

Saanich Peninsula

Future Directions  Many avenues to explore with this data  Some questions: Does residential land near ALR land exhibit an open-space premium? (Hedonic study) Can we quantify the speculation or option values that are being embodied in ALR land values? What other externalities near the urban fringe can we document in the area under examination (south Vancouver Island)?