On why we need an Infill Advisory Review Board

As part of my platform to drive growth and prosperity in Every Corner of Brampton, I have called for the formation of a Land Assembly and Infill Advisory Review Panel, and I wanted to explain the background for that proposal. I believe that we need to intensify the Four Corners Commercial District, and one of the biggest challenges to that goal is the existing land use policies in the Area.

I see a lot of misinformation in the marketplace about the economics of Infill Projects, and I wanted to show everyone a walk-through of the small land assembly project that I tried to put together in 2014.

There were four homeowners involved, and all four parcels of land added together to form a 1 Acre Parcel of Land in the area of Centre Street and Queen Street … a prime area to do a Land Assembly. There were 3 nearly identical smaller lots, each with 1 house on it, and 1 large lot with a single house on it.

Infill land assembly case study (2014) 
Four Homes: Value in 2014 Total Land Area
Small House 1  $365,000.00 .2 acres
Small House 2  $365,000.00 .2 acres
Small House 3  $365,000.00 .2 acres
Large Lot 4  $810,000.00 .4 acres
Total:  $1,907,014.00 1 acre
Proposed Infill Use 2014 Value Future Expected Sale Price
14 Townhouses*  $ 360,000.00  $400,000.00
*Based on Secondary Plan allowance for townhomes, against zoned use of single family detached
*Switch to townhouses low risk, but required permission
Cost to build per unit
Builder Sales (15% of sales)  $  60,000.00
Sales Commission on project basis  $  10,000.00
Soft Costs (park land, financing)  $ 30,000.00
Construction Cost ($100 pr sq ft 1,500 sq ft)  $ 150,000.00
Levies and Development charges  $  35,000.00
Rough Site Servicing costs  $  20,000.00
Land development/ design/engineering  $  15,000.00
Total Costs Per Unit:  $320,000.00
To determine a Land Acquisition Allowance, one works backwards from the Future Sales Price, as follows: 
Future Value $400,000 – Less costs $320,000 =  $  80,000.00 per unit
Times 14 units =  $1,120,000.00 Total Allowance
Based on the percentage of land owned, the price the Builder would pay for the land under the current secondary zoning (as it was) for each home owner worked out to:
Allowance  Fair Market Value Shortfall
Small House 1  $ 224,000.00 $365K $141K
Small House 2  $ 224,000.00 $365K $141K
Small House 3  $ 224,000.00 $365K $141K
Large Lot 4  $ 448,000.00 $810 K $362K
$1,120,000.00 $1,905,000 $785K
To make the project work, the Homeowners couldn’t be offered Fair Market Value under existing zoning.

To get to Fair Market Value, the Builder would need to build another 10 townhouses, as follows:

Existing FMV $1,907,014.00
Value of 14 Townhouses $1,120,000.00
Difference to be made up with more units:  $ 787,014.00
 At $80,000 per unit, $787,014/$80,000*= 9.84 Additional Units needed

a 70% increase

*Exclusive of additional planning and legal fees for a planning or zoning variance. 

All of these numbers assume that all units are built outside of the Flood Plain / Special Policy Area that requires substantial additional construction costs.

The reality for us was, unless we wanted to fund a rezoning application, it would be very difficult to convince a Builder to engage in the process of a Land Assembly Project under the Current Zoning.  And anyone who thinks its easy to just rezone a property for higher density uses needs only to stop by Heart Lake and see how the project at Conestoga and Sandalwood is coming along.

The land values in Downtown Brampton simply don’t lend themselves to Infill Development. And while we are promised that the LRT will trigger a wave of such development, the fact is, LRT’s only increase property values and make the requirement of intensification all the more potent a commercial reality.

So, to actually capitalize on the arrival of the LRT in Downtown Brampton, no matter what route is selected to get the LRT from Steeles to the GO Station, Brampton has to be ready to discuss the elephant sized Development Charges, Park Space Requirements, and Site Servicing Costs in the room. Unless and until we are prepared to make a profitable formula for developers to start projects, it won’t matter if we have an LRT and All Day Two Way GO Service, there won’t be any redevelopment of our already built out Downtown Area.

We need to start with As Of Right Zoning, meaning that Developers will know that they are not limited to Single Family Detached Housing; but that they will be able to build the medium density housing that will make the numbers work (those extra 10 units mean stacked townhouses or courtyard apartments); that the Etobicoke Creek Trail will be counted toward the minimum green space requirements; and that site servicing and development charges will be in subject to review to be a reasonable percentage of the Fair Market Value of the resulting units created (ie: for the end result to be marketable in Brampton, developers can’t be limited to sub 700 sq ft spaces by the operation of the punitive escalation in Development Charges for 3 and 4 bedroom units).

My Infill Panel will work with Homeowners to identify area residents that are willing to engage in a Land Assembly Project, connect them with the information they need to assess impartial financial projects for a project, and make sure that the City’s Zoning is amenable to converting existing Land Uses to the Highest and Best Use to maximize not only Fair Market Value for homeowners, but to maximize land use in our Downtown to start building a truly exciting and vibrant area of our City for both residents and businesses.

That is how we are going to build a downtown that we can be proud of, and how we are going to bring our Dreams to Life.

Wesley Jackson for Mayor.