# why doesn't the government develop land?



## twowheeled (Jan 15, 2011)

my dumb question for the day...why doesn't the government through a crown corp or other mechanism take on the role of land developer? If they are the ones to approve zoning it would seem like this is would be a very profitable venture for them and also lead to quicker development/approval process.


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## like_to_retire (Oct 9, 2016)

twowheeled said:


> my dumb question for the day...why doesn't the government through a crown corp or other mechanism take on the role of land developer? If they are the ones to approve zoning it would seem like this is would be a very profitable venture for them and also lead to quicker development/approval process.


We don't need the government to make a profit, nor take on the role of land developer. In fact, government is involved in far too many things they should keep their nose out of. The mantra of socialism is the government controls everything.

ltr


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## 319905 (Mar 7, 2016)

Dunno if this still applies but back in the day, during my time with the NRC when I participated in research of benefit to the private sector, the saying was Government does not compete with the private sector ...


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## sags (May 15, 2010)

Private business can't compete against government and make a profit, so they lobby against government involvement through lobby groups and political parties.

On the Tim Hudak radio show yesterday they said that Ontario drivers have the highest insurance rates in Canada while having the best driving safety records. Why is that ?

Ontario drivers could certainly benefit from a government run non profit insurance choice........as one example.

The same principle is true of developing land. The land speculators, developers, realtors drive up the cost of developed land.


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## RBull (Jan 20, 2013)

like_to_retire said:


> We don't need the government to make a profit, nor take on the role of land developer. In fact, government is involved in far too many things they should keep their nose out of. The mantra of socialism is the government controls everything.
> 
> ltr




Agreed.


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## Just a Guy (Mar 27, 2012)

Look at the history of government built projects. Olympic stadium in Montreal comes to mind...I believe it's still not paid off and it was built in 1976.


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## lonewolf :) (Sep 13, 2016)

twowheeled said:


> my dumb question for the day...why doesn't the government through a crown corp or other mechanism take on the role of land developer? If they are the ones to approve zoning it would seem like this is would be a very profitable venture for them and also lead to quicker development/approval process.


They want to be political correct & value the birds & deer more then people. Developing land always stirs up the environmentalists. Except for the reserves the government already has a monopoly on the rental of property.


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## twa2w (Mar 5, 2016)

The federal government has a crown corporation that does that. A simple Google search will tell you that. They are near completion of a major project in Calgary.


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## off.by.10 (Mar 16, 2014)

Just a Guy said:


> Look at the history of government built projects. Olympic stadium in Montreal comes to mind...I believe it's still not paid off and it was built in 1976.


You don't need to look that far back. We had the "Îlot Voyageur" barely a decade ago. 300 M$ lost into an unfinished building in a prime downtown location of Montreal. As much as I dislike developers and realtors, I have full confidence that our government would do far worse. At best, it would be one more opportunity to give nice profitable contracts to friends of the party.


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## Just a Guy (Mar 27, 2012)

The point was more it's been almost 50 years we're still paying for it...

The government always overpays and usually builds things no sane developer ever would. I once had offices in a building that was all glass and had 70% common area. Imagine something like that, all glass in Canada. The heating bills were astronomical (it was originally designed for California, but they rejected it there because only 30% of the property could actually generate revenue). So, of course the Canadian government snatched it up and lost a ton of money.


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## twa2w (Mar 5, 2016)

Further to my post up thread, here are some successes the government has had in developing and or managing land/ projects. Canada lands company.

http://en.clc.ca/what-we-do


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## lonewolf :) (Sep 13, 2016)

Just to much corruption in government for the tax payer to want the government more involved in developing land. If your a contractor or can somehow benefit from the corruption then it is good


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## andrewf (Mar 1, 2010)

Governments are not very good at cost-effectively managing construction projects. Best case is for gov't to be a silent partner in development projects, as with quasi-government organizations like the CPPIB.


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## nobleea (Oct 11, 2013)

twa2w said:


> Further to my post up thread, here are some successes the government has had in developing and or managing land/ projects. Canada lands company.
> 
> http://en.clc.ca/what-we-do


Canada Lands is a bit of an outlier. I believe they only redevelop ex-DND properties that have, over time, ended up surrounded by residential which ended up making them very attractive for further residential development and fairly unattractive for further military use. Griesbach is a good example here in Edmonton. Both my parents used to work there when part of the military, and that was about 15-20yrs ago. It's not a very attractive infill development. Some of the PMQ's are still present and available for rental, but eventually they too will be torn down and replaced. The one where my dad and uncles lived when they were young and my grandpa was posted here a while is still present. That would've been the late 60's.

But in general, government sucks at development. If it's a true hands off crown corp, run by pros, maybe there's a chance. But generally it's an offshoot of the local planning and development group and they're no good at it. Edmonton has many examples of failed development, and we have a big one on the go which is turning in to a disaster (Blatchford).


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## twa2w (Mar 5, 2016)

True enough but private enterprise also generally sucks at development as well.
The failure rate is extremely high and lots of poorly designed projects. It is a boom and bust industry and both government and private sector tend to expand at inappropriate times.
Although in general, development is almost always a joint effort. After all most projects require government approval at some level.


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## twowheeled (Jan 15, 2011)

I dont really understand real estate very well, maybe you could dumb it down for me?

I'm thinking of a scenario like this, the municipalty buys up industrial/farm land in a large plot say for example for $1M. Splits this up into 20 lots, fast forwards the zoning approval, pays contractors to tie into utilities, sells affordable residential plots at cost. People get affordable land in the suburbs, quickly, the only loser is the land developers or realtors.


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## like_to_retire (Oct 9, 2016)

twowheeled said:


> I dont really understand real estate very well, maybe you could dumb it down for me?
> 
> I'm thinking of a scenario like this, the municipalty buys up industrial/farm land in a large plot say for example for $1M. Splits this up into 20 lots, fast forwards the zoning approval, pays contractors to tie into utilities, sells affordable residential plots at cost. People get affordable land in the suburbs, quickly, the only loser is the land developers or realtors.


In a few sentences I can't begin to explain what a terrible idea it is for the government to step in and undermine developers, realtors and basically the price of a product by using taxpayer dollars. Read up on communism to find out why it doesn't work.

ltr


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## Just a Guy (Mar 27, 2012)

In developing property, the actual land is only a small portion of the cost. This is why, with many infill properties, it's cheaper to buy an existing house and tear it down before building a new house. The land, even with a house is worth less than the new house with the land. Thus, the "expensive" part is still the house.

As for building at "cost", take a look at a city budget sometime. Look at how much it costs the city to do something simple, like print and put up a sign. I guarantee you any private company could do it cheaper. Another thing to try, ask a contractor what they charge as a government rate as opposed to what they charge the general public, in a slow economy you'd be surprised at the difference.


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## sags (May 15, 2010)

Municipalities develop industrial and commercial land all the time. Many cities will "build to suit" for interested parties.

Our city has projects built by the city that are anchors for the local economy and a huge benefit to the city. 

Individual developers focus on their individual projects. City planners focus on the integration of a whole community.


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## nobleea (Oct 11, 2013)

like_to_retire said:


> In a few sentences I can't begin to explain what a terrible idea it is for the government to step in and undermine developers, realtors and basically the price of a product by using taxpayer dollars. Read up on communism to find out why it doesn't work.
> 
> ltr


The thing is, the city will almost never be able to underprice private business. Things cost so much more for the city to do, rather than a private developer. Even selling at 'cost' would probably be 20% more than a comparable private venture, at profit. The city can only use their approved contractors, who will pad the numbers a bit since it's the city and they have ridiculous requirements. Endless consultations with consultants to make sure everyone's feelings are not hurt. Oh, our city charter says we're ISO 14001, so let's make this a carbon neutral development.


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## twa2w (Mar 5, 2016)

twowheeled said:


> I dont really understand real estate very well, maybe you could dumb it down for me?
> 
> I'm thinking of a scenario like this, the municipalty buys up industrial/farm land in a large plot say for example for $1M. Splits this up into 20 lots, fast forwards the zoning approval, pays contractors to tie into utilities, sells affordable residential plots at cost. People get affordable land in the suburbs, quickly, the only loser is the land developers or realtors.


Many towns and cities do this but for industrial commercial. Some to a greater or lesser degree of completion. And some in conjunction with a developer.

Gives better control over zoning, development, traffic etc.. Newmarket, Ont did this a number of years ago. 
Calgary, Alberta has does this in the past as well.


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## Just a Guy (Mar 27, 2012)

Hey do that to attract industrial development. Cities often try to incentivize big industrial players so that they create jobs...look at the recent waste of money trying to attract amazon to various cities.


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## sags (May 15, 2010)

The CN Tower attracts 2 million visitors a year. It is a federally owned building now.


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## Just a Guy (Mar 27, 2012)

Yeah, they didn't develop it, so what's your point?


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## twa2w (Mar 5, 2016)

Just a Guy said:


> Yeah, they didn't develop it, so what's your point?


Actually they did.
CN tower was completed in 1976 by crown corporation CN rail. 
CN did not become a public company until 1995.

CN Tower is now operated by Canada Lands Company. Another crown Corp.

Fun fact. Bill Gates was once CN's largest single shareholder.


The land under the CN Tower is worth so much, they are considering demolishing the tower to develop the land.


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## Just a Guy (Mar 27, 2012)

Crown corps don't have to follow the same rules as government, thus they are closer to private sector than government.


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