Why a gravel parking lot costs $15 million—the same as a luxury estate

The value of $15 million dollars isn’t what it once was. But it’s still a heck of a lot of money and can get you a decent amount of land, especially in the Fraser Valley.

But just how far those dollars will go often depends less on the quality of the land and more on decisions made by governments, bureaucrats, and politicians.

Eight $15 million (or so) properties around the region provide insight into how city planning decisions influence the cost of land, housing, and businesses.

Industrial capital

Industrial land is hard to find in the Fraser Valley—and in high demand.

That has made land for warehouses, manufacturing, and logistics businesses among the most valuable in the region. And so, even a gravel lot mostly just used as parking can fetch astronomical sums for its development potential.

In Chilliwack, the owner of a five-acre gravel parking lot has listed the site for sale for $16 million. The site is located on Lickman Road, near railway tracks and just off Highway 1. Crucially, it’s already zoned for industrial development, meaning that, unlike some other potential sites, any new owner can be certain they’ll be able to build an industrial building of some type on the property.

A similar thing is behind the valuation of a paved lot in Abbotsford on McCallum Road, just off Highway 11. The site has a tiny modular building on it and is only 2.7 acres, but is listed for sale for $14 million, a sum that represents its potential, not current use.

Those properties show how valuable industrial land is. They also provide a hint why some farm properties sell for far more than their agricultural potential would suggest.

What if?

Just to the north of Aldergrove, on 264th Street, a 44-acre parcel is listed for sale for $12 million. The property (which dropped in price from $13.25 million while we were writing this article) isn’t farmed but is located in the Agricultural Land Reserve. In 1995, the Township of Langley applied to the ALC to have the property and 24 others removed from the ALR to provide land for Aldergrove’s ongoing growth and presumably the building of houses.

The Agricultural Land Commission shot down the plans.

In 2013, the property’s owners again proposed to have the lot removed from the ALR, again to seemingly build homes on it. Langley Township gave its backing, suggesting the proposal would again be beneficial for the growth of Aldergrove.

But after an application process that took nearly five years, the ALC again rejected the proposal, saying the land had “prime agricultural capability” and that allowing its removal could “increase the potential for urban-agricultural conflicts.”

Now the owners are looking to sell the land. But even though the ALC has repeatedly deemed that it should remain designated for farmland, the sellers hope that another buyer will see its potential for industrial development. Marketing material points out its proximity to transportation corridors and the existence of nearby industrial businesses.

The cost of industrial land elsewhere in the region suggests that if a developer could get the property out of the ALR and zoned for such uses, they could make a huge profit from a $14 million investment. But the Agricultural Land Commission has held a firm line on the removal of good farmland for development purposes—in part to deter speculators from pushing the price of farmable agricultural land outside of the reach of actual farmers.

And if one thinks the ALC is unlikely to change its position, then $14 million becomes an extremely high price to pay for 44 acres of farmland.

Estate potential

We know $14 million for 44 farm acres is expensive because of a couple other similarly priced ALR properties in the region.

On Telegraph Trail in Langley, just north of Highway 1 and Trinity Western University, you can get twice the amount of land for $14 million. And even though the property is located in the ALR, it’s not exactly farmland. Instead, it’s almost completely covered in poplar trees.

As land that is covered in trees and not farmed, you might expect the lot to be a decent candidate for removal from the ALR. But recent history, combined with the fact that the land’s price is set lower than the Aldergrove lot, suggests the land is likely to remain protected as farmland, even if it’s not farmed.

There are two reasons for that.

Firstly, because the site is surrounded by farmland. The ALC has been clear that it prefers to keep large blocks of protected land together, rather than poking holes in it and excluding bits and pieces here and there. They worry that excluding one property could lead to conflicts between farming and non-farming property owners, while also encouraging others to stop farming their own properties to get them removed from the ALR. (The Aldergrove property illustrates how property owners can make millions if they get their land removed from the ALR.)

Secondly, the trees aren’t a critical factor because the ALC does not want to encourage owners to render their properties unsuitable for farming (whether by creating a mini forest or otherwise damaging it) just to build a case for exclusion.

The realtor for the lot seems to recognize this destiny and has stressed already permitted uses in online ads. They point to the site’s potential to be “developed as a private country estate” or to be farmed as either a hobby or business. As for all those trees—most of which are black poplars—the ad says they are “ideal for future harvest.” After all, most farmland in the Fraser Valley started out as a forest.

Real farmland

If you’re wondering what farmland is really worth when it’s only valued for its ability to produce crops, a large Glen Valley property has the answer.

Located a short distance from the Fraser River, with soil made rich by the river’s regular flooding, a 161-acre blueberry farm is listed for $16 million (give or take $100). At roughly $100,000 per acre—that price is extremely high for farmland but still much lower than the Langley ALR properties that have less ideal land, but speculative or estate value. The site is outfitted with drip irrigation and has “very fertile, rich peat soil,” with about half the property planted with Duke blueberries and that produces 600,000 pounds annually. It also has a barn that is being rented for $10,000 each month, the ad says.

The dream homes

Then there are the homes—or the potential homes.

The Lower Mainland’s desperate need for more housing has not only pushed the price of homes ever-higher, it has also increased the cost of any land where you might be able to build.

In rural Mission, 15 acres of heavily treed land near Hatzic Lake might seem like a good place to set up an acreage. But the Ferndale Avenue property will set you back $15 million because of its potential to be divvied up into 38 lots. Nearby properties have also been listed for sale, with ads emphasizing their potential for new homes if Mission officials allow it to sprawl even further. (Currently the properties are outside of Mission’s urban development boundary).

If you don’t want 38 homes, but just one really nice place to live, $15 million can also solve your problem.

In the Chilliwack River Valley, a 50-year-old, three-bedroom house can be yours for $15 million. That price doesn’t reflect the existing small home as much as it does the potential for someone to build their “masterpiece” home, as the ad describes. And although the site is remote, the Sotheby’s property listing emphasizes the ability for the property to accommodate either a private airstrip or helipad, depending on your preferred mode of air transportation.

Finally, if you don’t want a fixer-upper for your millions, rest assured that house prices aren’t quite that ridiculous yet.

For $14 million (the price was reduced by $1 million last week), you can buy Grace Acres in rural Langley. The estate (dubbed “iconic” by the marketing materials) features a 8,700-square-foot home with a pool, cabana, and luxury barn on 12 acres. Its construction, interiors, and design has been documented on Instagram by its owners, Troy Hibbs and his wife Monika, a lifestyle blogger and influencer who now operates her own online business.

It doesn’t have an airstrip. But not every property can.