Upzoning market impactThis is from a policy paper considering upzoning impacts in Vancouver. The impact on land values will be an increase in lot values. MPC has a huge land bank. One of the advantages that MPC has is that they can build services to handle density. The last statements show the JV drawing 70 million in funds. I assume for service constuction. I managed to buy 900 of the voting shares today at $5.85. A very good price.
Allowing more density creates land values at the stroke of a pen. A challenge for upzoning detached housing neighbourhoods is that it could lead to even further land price inflation. This would undermine the potential gains from increased density, delivering windfall gains to existing landowners. Developers will bid up the price of land if there is a gap between the value of newly developed higher density and the cost of building it plus buying the property
For example, redeveloping a detached house on a standard lot valued at $1.5 million into 6,000 square feet of new space would cost another $3 million in hard and soft construction costs and financing for a total of $4.5 million.18 At market rates of between $1,000 to $1,300 per square foot, the newly built housing (six to eight dwellings) would be worth $5.7 to $7.4 million.19 These large expected profits would drive up the price of the land,