Whether it’s a liquor store, weed dispensary, group home, or super mailbox that’s slated to move into your neighbourhood next, there’s no crystal ball that can tell you how the new addition will impact your property value.
The best thing you can look to is the real estate market in your city, says Keith Lancastle.
Lancastle is the CEO of the Appraisal Institute of Canada, a property valuation association established in the 1930s.
“People moving to Toronto and Vancouver, where there aren’t a lot of homes, (experience) a supply and demand situation that will put upward pressure on the price.”
Prices are driven down, he says, when the opposite is true, and there’s a surplus of homes. That’s not the case in Whitehorse.
Though the Yukon Bureau of Statistics doesn’t keep numbers on supply and demand, “generally that’s how the market works,” says Gary Brown, senior information officer with the bureau. “As demand increases, the price will increase.”
Brown says that in 2017, the value of real estate transactions in Whitehorse was the highest it’s been since the bureau started tracking real estate in 1977.
Last year, there were 553 residential sales in the city, worth $210.9 million. Brown says people often assume this means a few higher-priced homes dragged the average up, but he says that wasn’t the case in 2017, when the median house price was $455,000.
Beyond the market, Lancastle says there are a handful of things that tend to be viewed as negatives, including high transmission power lines, or gas stations (which can result in increased traffic). But with other uses that tend to cause local backlash, he says, there’s no proof that anxiety is warranted when it comes to property values.
“If you have a marijuana dispensary around the corner from your property and you have a property that is unique, that’s in an area that’s in high demand, the fact that there’s a marijuana dispensary nearby may have minimal or no effect,” he says.
For the most part, he says prices rely on the personal preferences of the would-be purchaser. An in-ground pool might be one buyer’s recreational dream, but a yard work nightmare for someone else.
“There’s a lot of psychology in (it),” agrees John Andrew, a continuing adjunct assistant professor with the School of Urban and Regional Planning at Queen’s University in Kingston, Ontario.
“It can be a bit of a fait accompli. If people think that any use of property is negative, then it probably will be because it’s affecting people’s perceptions of their own property.”
He says one thing that can lower property values is an “ongoing nuisance factor” — anything that causes a lot of noise, or leads to socially unacceptable behaviour — “like peeing outside,” he says. Another example would be a nightclub opening in a residential neighbourhood and consistently becoming the source of late-night noise and fights breaking out.
He says middle-class, mixed-use neighbourhoods tend to be more resilient to this type of thing because residents are used to living side-by-side with some commercial or retail spaces.
It’s affluent, primarily residential neighbourhoods that tend to be resistant to change. There, Andrew says, small, vocal minorities will often highlight other issues as proxies for their real concerns.
“People will use things like traffic as an excuse,” he says. “They’re not worried about traffic at all. They’re worried about low-income people, or they’re worried about youth, or they’re worried about students, or they’re worried about rehabilitating criminals.”
“There’s a fear of ‘maybe there’s going to be people there who aren’t like us.’”
Andrew himself was once on the board of directors for a daycare that relocated into a large former student house. The board didn’t expect any issues with the move, but Andrew says some neighbours opposed it.
“’A student house’” is not normally considered an ideal property,” he says, using the word NIMBY, an acronym for those with a not-in-my-backyard attitude. “But some people will oppose any change.”
Roughly a month after the daycare started operating, that group of residents opposed to it realized the daycare was empty by 5 p.m. on weekdays, and every day on the weekend. Where there used to be a certain degree of partying, Andrew says, now there was quiet.
Even in cases where a property is used for something historically seen as negative (a group home, or an adult video store, or a marijuana dispensary) though, he says that perception is relatively short-lived “if a neighbourhood accommodates that use,” he says.
“A group home for rehabilitating criminal offenders, those kinds of things, there typically will be a huge backlash against them,” he says.
“But then, because they typically aren’t actually associated with ongoing nuisance, they kind of just blend into the neighbourhood. After about a year to two years everybody forgets that they’re there and they kind of blend into the community.”
The thing that really tells you what’s happening with property values are the numbers, says Andrew. What matters is how many homes are selling and how much they’rer selling for.
Contact Amy Kenny at email@example.com