Quadra Islanders who attended the Official Community Plan / Local Area Plan (OCP/LAP) meeting at the Community Centre on the evening of March 8th heard the Comox-Strathcona Regional District planner, Carlos Felip, try to explain that proposed changes to the OCP through LAPs would not increase property assessments.
After his attempted explanations, I remain even more convinced that assessments would increase under the proposed blanket “designation” of the large area of properties on the east and southeast areas of Quadra from a 5 and 10 acre zoning to a 2 1/2 acre minimum. Assessment increases would also apply to Quathiaski Cove and Heriot Bay where higher densities and commercial use are planned. (At the next public meeting on March 21st, Carlos conceded that market forces would elevate assessments.)
My 10 years as chair of the Property Assessment Review Panel (formerly the Court of Revision) in Campbell River, and recent inquiries at the BC Assessment Authority provide a clearer indication of what would happen under the new OCP/LAP proposal.
Zoning affects assessed values. And the BC Assessment Authority, vested with this responsibility, uses the principle of “highest and best use” as a criterion to judge the value of each piece of land. When a community decides to re-zone to a higher density, it is essentially advising the market and the Assessment Authority that this more intensive use is now allowed — indeed, even encouraged. Such a change increases the “utility” of property. And the “highest and best use” criterion then recognizes that properties, once subdividable to only 5 or 10 acres, are now subdividable to a possible 2 1/2 acres. Assessments are adjusted upward to recognize this new potential. As an example, a 10 acre Port McNeill property in a “low real estate demand” area that was re-zoned to 2 1/2 acres had its assessed value increase by 30%.

In addition to acreage, the same principle applies to properties in Quathiaski Cove and Heriot Bay where some form of multiple-unit accommodation or commercial use is indicated in the proposed OCP/LAP. This new designation will add “utility” that then becomes the “highest and best use”. Assessments will increase accordingly.
Quadra’s proposed OCP/LAP does not intend to “re-zone” but to allow individual LAPs to “designate” their own increased densities and uses. The procedure described by Comox-Strathcona Regional District planners is that each LAP would be attached to the OCP as an “appendix”. Owners of potentially subdividable acreage who want to create lots as small as 2 1/2 acres — or who want to apply for multiple-unit or commercial use in the Cove or Bay — would apply to the CSRD. If the properties met the necessary requirements, the application would be submitted to a public hearing, and then, assuming a positive public response, would be granted a re-zoning to allow subdivision or some other more intensive use.
The technical question for assessment purposes is whether or not “designation” for potential re-zoning is a form “re-zoning”. The BC Assessment Authority’s position is that “designation” and “zoning” are equivalent. Once the new OCP/LAP becomes a legal community document, assessments would increase to reflect the higher “utility” of properties described in the “designations”.
The Assessment Authority has explained that its response to this change would be “reactive”. In other words, it would wait for a period of time to measure the impact of the new “designations” on the market value of properties. As soon as selling prices rose to indicate the potential for increased subdivision, density or commercial use, the Assessment Authority would raise the assessed value of all similarly designated properties.
The other response of the Assessment Authority to a change in “designation” would be guided by the “50% principle”. If a majority of applications for a higher-use zoning for properties passed the review process, then this would indicate that all such “designated” properties could be assessed at a higher rate.
Since the new OCP/LAP intends to “designate” higher densities and greater “utility”, this reverses the present onus of responsibility to establish whether or not any re-zoning should occur — instead of an owner having to justifying why a property should be re-zoned, the public would have to justify why the property should not be re zoned. The effect of this reversal of onus will be to increase the number of re-zonings approved in the public hearing process and, therefore, to activate both the “50% principle” and the “highest and best use” criterion. Assessments on all designated properties in the OCP/LAP document would increase in response to this greater “utility”.

Even if the Assessment Authority decided not to employ the “50% principle” or consider “designation” as the equivalent to “zoning”, market forces alone would quickly respond to the OCP/LAP “designations”, eventually forcing up the selling price of land and, therefore, assessed values. Properties of 5 acres or larger would be identified by owners and buyers as having more value because of potential subdivision to 2 1/2 acre lots.
At present market values, a 2 1/2 acre parcel sells for approximately $150,000, a 5 acre for $200,000 and a 10 acre for $250,000. With the proposed changes to the OCP, a 5 acre parcel would have a potential worth of $300,000 and a 10 acre of $600,000. The worth of larger properties would increase by a related factor. “Designation” would be interpreted in the market place as opportunity, increasing both asking and selling prices. Higher selling prices would raise the benchmark used by the Assessment Authority to assess all such similar properties. The same increase in assessed values would apply to Quathiaski Cove and Heriot Bay properties that were “designated” for some form of multiple-unit or commercial use. This increase in assessed value would occur whether or not an owner ever intended to subdivide or change a property’s use.
The proposed “designations” in the OCP/LAP will increase the number of properties for sale on Quadra and, eventually, the number of new residents — although present demographics suggest they would likely be retirees. Given current real estate demands, prices would unlikely fall below present levels to provide so called affordable housing.
People who presently own large acreages — or who own properties designated for higher density or commercial use in Heriot Bay and Quathiaski Cove — would eventually have three options: they could bear the cost and risk of attempting to re zone back to their original status, they could subdivide, or they could pay the higher proportion of taxes brought by the higher assessments. If they could not afford these options, they would be forced to sell.