Transit-Oriented Development Areas Will Reshape B.C. Cities

Last year British Columbia introduced Bill 47, which included changes to the Local Government Act to promote high-density development near transit stations. These development zones, dubbed Transit-Oriented Development (TOD) areas, are within walking distance of current and future transit stations. Cities across the province were required to amend their bylaws accordingly by June 30 of this year.

Gurki Rai, a Vice President at CBRE Vancouver, focuses his brokerage business on helping sellers and developers utilize TOD-related opportunities. Rai has spent nearly 20 years as a realtor specializing in land development and investment property sales in the Fraser Valley, and he has extensive knowledge of the construction and development industry from previous work for a general contractor and local developer.

Rai works alongside Steven Law, who was a residential property manager before joining CBRE Vancouver in 2022. Starting on the local research team, Law recently joined Rai as a sales associate. Together, their knowledge of bylaws in multiple municipalities and their networks of construction and residential contacts position them as valuable resources for homeowners and developers looking for transit-adjacent opportunities.

“There is a lot of uncertainty surrounding the new legislation’s impact on municipalities and land values, but there’s even greater opportunity,” Rai says. “It’s an exciting area to focus on as there are significant benefits for individuals, businesses and the community at large.”

What are Transit-Oriented Development Areas?

TOD areas are communities designed to maximize residential, business and leisure space within walking distance of public transportation. So far the province has designated 52 TOD areas near SkyTrain, subway, bus exchange, and Westcoast Express stations across the Lower Mainland, including the Fraser Valley.

TOD areas are broken down into tiers based on 200, 400 and 800-metre radii around transit stations, equivalent to a 3- to 10-minute walk on average. These tiers determine the minimum allowable height and density for properties where zoning bylaws permit residential use, with taller buildings closest to the transit stations. Regulations will vary by municipality as local governments can approve higher densities than those mandated by the provincial government.

“The idea is to provide more housing options while increasing access to transit and services,” says Rai. “The aim is also to help improve affordability and supply, control urban sprawl, and reduce the number of cars on the roads to create more sustainable communities.”

As part of the legislation, the province mandated removing municipal off-street parking requirements for new multifamily developments in TOD areas. Parking will now be up to the developer’s discretion. Having to meet the current parking requirements adds significant costs to new development projects, so eliminating the need for onsite parking removes a barrier to building more housing while incentivizing the use of public transportation. Municipalities can still require accessible and commercial parking spaces.

B.C. isn’t the first government to introduce this type of legislation. More than 20 TOD programs have been implemented across the U.S. and in Canadian cities such as Calgary and Montreal, which have guidelines on building around transit stations. Although such initiatives have received criticism for their potential to promote the gentrification of low-income areas, positive outcomes include improved health and safety, inclusive access, and greenhouse gas emission mitigation.

Changing Neighbourhoods

TOD areas will have a significant impact on local real estate markets, according to Rai. Depending on location and uses, there could be substantial increases in land values as developers pursue opportunities around transit points. This may result in more properties coming to market as homeowners who are currently sitting on those designated sites seek to cash in. “TOD Areas will change existing neighbourhoods,” he says. “This legislation will encourage growth in underdeveloped areas.”

Rai and Law have already started contacting homeowners in the Fraser Valley’s TOD areas. “Retired homeowners in particular are interested in exploring these opportunities,” Law says. “Most homeowners are unaware of how these new legislation changes will impact them. Their property is now potentially worth more for developers. We are here to answer questions, provide information and assist in property dispositions to ease owners’ minds.”

Rai and Law help homeowners determine whether their land has the right dimensions for multifamily development or connect with neighbours to sell adjacent plots.  They can then introduce them to developers and assist them throughout the transaction. “Our role is to help clients understand how to make the most of these new opportunities and maximize the value of their properties,” says Rai.

Growing Communities

The increase in multifamily developments will also affect the broader commercial real estate market as demand for services, amenities and offices grows. New developments will often include ground-floor retail or office components so residents can live, work and play in close proximity.

“Commercial real estate opportunities will be abundant in those areas,” says Rai. “As these communities grow, they will need health services, workplaces, restaurants and grocery stores. Transit-Oriented Development areas bode well for landowners, prospective home buyers, service providers and the overall future of British Columbia’s cities.”