Industrial land shortage looms
Denial of Abbotsford’s farmland exclusion request means city will have to ‘get creative’
The Agricultural Land Commission’s recent decision denying the City of Abbotsford’s request to remove almost 200 hectares from the agricultural land reserve for industrial development “tightens the vise” on companies already struggling to find space.
“They’ll have to get creative,” said Kyle Dodman, a commercial broker with Frontline Real Estate Services who specializes in industrial sales and leasing in the Fraser Valley.
“There’s a common misconception that Abbotsford has these large parcels of available land when there’s really only a handful left,” he explained. “It would have been nice to see the application (to the ALC) go through.”
The Fraser Valley’s wide open spaces have long been seen as a safety net to address Metro Vancouver’s dwindling supply of industrial space. But rapid growth, coupled with the provincial government’s promise to review and revitalize the agricultural land reserve, have some worried industry is being forgotten.
Between 2016 and 2017, Metro Vancouver’s industrial availability rate dropped from 3.6 per cent to a record low of 2.3 per cent, the second lowest in North America, according to a report published in February by the international real estate and investment firm CBRE.
“We are at a critical stage and we need to find industrial areas for these companies,” VP of Industrial Chris MacCauley said in a news release. “It used to be that when companies couldn’t find space in Vancouver, they moved to the valley. But now the valley doesn’t have much inventory left either ... So there’s a threat we’re going to see companies relocating out of province or it will limit their growth potential.”
The report found that the two municipalities with the largest industrial inventories also had two of the lowest availability rates — Richmond at two per cent and Surrey at 1.3 per cent. Lease rates rose accordingly, with average net asking rents for Metro Vancouver pegged at $10.23 per square foot at the end of 2017, the first time rates have exceeded $10 in the region.
“Demand has continued to outstrip supply in Vancouver by more than a million square feet a year. Yet there is currently no plan in place to find solutions to what will soon become a deterrent for businesses,” said MacCauley.
In the wake of the ALC’s decision, the Abbotsford mayor is also calling for solutions to his city’s looming industrial land shortage. Last week, council passed a staff recommendation to arrange meetings with the Minister of Agriculture and the ALC chair to discuss the city’s “future growth plans.”
“The properties submitted (for exclusion) followed a process we were advised to follow,” said Mayor Henry Braun, explaining the city wanted to remove low-quality farmland in two areas, including several properties near the Gloucester Industrial Estates, and others near the Abbotsford Airport, to make way for industrial growth. The city was also drafting an “AgRefresh” strategy to protect and enhance its most valuable agricultural areas. Both processes have been put on hold pending the results of the government’s ALR review.
“We need to ensure we have an adequate supply of industrial land. People need to have a place to work, not just to live,” said the mayor.
But the ALC was having none of it. In the denial issued April 27, the commission said that “although the applicant submits that there is a ‘dwindling supply of industrial land in Metro Vancouver and that major industrial parks in the Lower Mainland are nearing capacity,’ it is not the role of the commission to solve this supply issue.”
That had Braun asking whose role it was.
“I get that it is not the ALC’s mandate, but it is somebody’s mandate at the province. We can’t view these things in silos. There has to be some discussions between the silos,” he said.
The Surrey Board of Trade has also been calling for a more holistic approach to dealing with land-use issues in Metro Vancouver and the Fraser Valley. In its submission to the ALR review committee in May, the board touched on the importance of ensuring farmland was being farmed.
“If farmland is not productive, we need to see if there are ways to make it productive. If that’s not possible, we should ask if it could be used for industry,” CEO Anita Huberman told Postmedia at the time. “The ALR should be considered as part of a larger land-use strategy.”
But for farmers and farmland advocates who want to see all farmland protected, the Abbotsford decision was a positive signal from the ALC.
“I’m relieved. They did what they should have done,” said Jillian Azanza, a Bradner-area poultry farmer. “When I look at farmland that was excluded for industry (in the past), I don’t see intensive use of the land. I see gravel truck parking. We should be asking industry to densify.”
Industrial densification is an expensive prospect, University of B.C. commerce professor Tsur Somerville said when asked about the Abbotsford exclusion in the past. Companies are more likely to take their operations to Calgary, Seattle or Prince Rupert than build two-storey warehouses.
“I think the pressure (on limited industrial land) is greatest closer to Vancouver. Before you took land out in Abbotsford, I think you’d consider taking it out in Richmond or Surrey,” he said.
Bradner resident and editor of the Bradner Barker Heather Lemieux said residents who live near the properties proposed for exclusion were pleased by the ALC’s decision, but they’re worried the city and developer may simply wait for a change in government to apply again.
“We feel the city threw us under the bus. There was such a public outcry, but they still took the application to the ALC,” she said.
“This is some of the most fertile land in Canada with a year-round growing season. Farmland should be off-limits. Period.”