Rural Commuter Rail

[Joseph Potvin]

Originally Posted by AndyMEng

I'm not getting it. How, exactly, do you convince these property owners to give you their money? Is it an increased tax that the villages would levy on all property owners once the station agreement is in place? Once these villagers are paying an increased tax, they're also going to be the sole fare-payers? Seems to me if the lines are going to be subsidized by the public, it needs to be from a larger source, i.e. from feds or province.

AndyMEng,

1. The Property-Powered Rail (PPR) approach involves $0 public sector funding. It is not based on any tax.

2. Evidently, the PPR is as challenging to understand as is Section 37 of the Ontario Planning Act https://www.ontario.ca/laws/statute/90p13#BK58 ... however attempting to understand the negotiations between developers and cities over Section 37 Paragraphs 3-4-5 is a good place to start, since it is driven by the same financial dynamic. Whereas Section 37 approaches the opportunity based on public sector variances or investments, the PPR pursues the financial opportunities from an entirely private sector perspective. Either way, these are agreements that owners/investors/developers do proactively engage in. They're not forced.

3. Each train station, operating under any business model preferred by its owners, is assumed for the purposes of the PPR model to be owned and operated by a “common elements freehold condominium corporation”. If you really do wish to understand how the funds would be assembled by each corporation that is owner/operator of a station, here is the seminar article about industrial/commercial freehold condominiums:
http://scholarship.law.stjohns.edu/cgi/viewcontent.cgi?article=2865&context=lawreview

4. For some reason, some of the commenters in this blog only think about car-oriented single-family homes within the 0.8 km radius. That's the least likely scenario.

5. How, exactly, do you convince these property owners to give you their money? Essentially as it works when commercial condominium owners commits some of the realized financial increment towards a "common element" parking lot (even if they don't drive), or as residential condo owners agree to increase their fees for a pool (even if they don't swim). The common element is deemed (by the payers, in their reading of the market) to add more to value than it costs them. In the case of the PPR, part of the property value increment (income & asset) due to rail connectivity is retained directly by the freehold property owners. And the other part they pay towards their station condominium corporation. Each condominium corporation then applies that revenue towards facilities operations, a reserve fund, and a subscription to train service.

If there are further questions about how this is being designed, I'll be happy to respond. My purpose here is to share the rationale of MOOSE Consortium's investors. Not everyone will be convinced, but generally in business, not everyone sees the opportunities that a successful entrepreneur sees. We've done the math, and we're ramping up further analysis.

Since 100% of the investment is private sector, and no special deals are being asked from government, and MOOSE is not lobbying government, this should at least provide reasonable assurance that the risk is ours. (Granted, we do 'call in the referee' when a municipality dismantles essential infrastructure in violation of federal rules. In our view the feds should really be pro-active in upholding their own rules relating to federally regulated infrastructure.)

The investors in MOOSE see an opportunity in the untapped demand created by the long-standing inability of the public sector in the Greater National Capital Region to provide an integrated transit system appropriate to a population of 1.3 million residents and 8 million annual visitors (mainly tourists).

Joseph Potvin
Director General | Directeur général
Moose Consortium (Mobility Ottawa-Outaouais: Systems & Enterprises) | www.letsgomoose.com
Consortium Moose (Mobilité Outaouais-Ottawa: Systèmes & Enterprises) | www.onyvamoose.com

[Charles5]

So, as a resident in Barrhaven and a potential entrepreneur, here's my initial analysis of what it would take to establish a station there. MOOSE shows Barrhaven as a likely stop on their network and it has been mentioned several times on their website and elsewhere.

Assumptions:
-annual operating costs of $200M are split evenly between 50 stations. That requires each station cooperative to submit fees of $4M/year to MOOSE.
-maximum household density around the rail line in Barrhaven is 1000 households per square kilometre.
-Average house prices are $400K
-1/20th of all properties are sold in a given year.
-Current year dollars are used, inflation is not taken into account.

As a potential station owner I would need to enter into contractual negotiations with 2000 different property owners. They would all have to be convinced that having a station in proximity to their property would raise the value by an average of 20%, from $400K to $480K. They would have to also agree to give up $40K of that growth upon the sale of their property. If 100 properties are sold each year, that equates to the required fees of $4M annually to be paid to MOOSE for their operating costs.

Assuming all of this were to happen. As each property is sold, each new owner would have to be convinced to also join the collective. After just paying an $80K premium to live near the station, they would have to be convinced that property values would once again climb another 20% purely due proximity to the train station which is already there.

Shortfalls and challenges:
-Trying to arrange contractual obligations on 2000 separate property owners would be a challenge in its own right.
-The probability that any significant percentage of the current population would agree to this is highly unlikely. Even if property values would rise, can you imagine anyone willingly handing over $40K of their property sale, especially as they are now moving away from the station. For each property owner that does not agree to work with the collective, the burden upon the remainder rises to meet the required annual operating costs.
-Property value rises, should they occur, would be primarily a one time event. Second generation buyers would be highly unlikely to agree to this sort of contract.

Additional issues:
-If you were to look at a map of Barrhaven, the only possible and logical places to put a station are in the North-East, co-located with VIA rail and OC Transpo, or in the South-West, in the new industrial business park. There is no other physical location to do so. However, by doing that, the amount of property owners drops significantly. The NE location is surrounded on three sides by Greenbelt and will never be developed. The SW location is primarily car dealerships and farmland. While it may be developed in time, the potential for significant traffic to/from the train or increase in property value is low, especially in the near term.
-As a station owner I would have limited ability to generate additional revenue. Capital costs would be relative high to build the station and associated infrastructure such as parking. There would be an ongoing operating cost of maintenance, staffing, security, etc. Revenue would consist of some coffee and donut sales primarily. Pay parking would not be possible as OC Transpo has 3 large park and ride lots in the Barrhaven area which are free. Anyone driving to Barrhaven would not pay to park when they could park for free and subsequently take a more direct method of transit into the core of the city.

In my opinion, the business case to build and operate a station in Barrhaven is not there. This would almost certainly be a similar situation in the entire urban center of Ottawa where over half the stations would be.

[rocketphish]

Originally Posted by Charles5

So, as a resident in Barrhaven and a potential entrepreneur, here's my initial analysis of what it would take to establish a station there. ...

Welcome to the forum!

[Norman Bates]

Originally Posted by rocketphish

welcome to the forum!

+1

[Allandale25]

Very helpful Charles. Maybe I missed this but did you also calculate how would have to contribute to the operating costs through a common element fee?

Originally Posted by Charles5

So, as a resident in Barrhaven and a potential entrepreneur, here's my initial analysis of what it would take to establish a station there. MOOSE shows Barrhaven as a likely stop on their network and it has been mentioned several times on their website and elsewhere.

Assumptions:
-annual operating costs of $200M are split evenly between 50 stations. That requires each station cooperative to submit fees of $4M/year to MOOSE.
-maximum household density around the rail line in Barrhaven is 1000 households per square kilometre.
-Average house prices are $400K
-1/20th of all properties are sold in a given year.
-Current year dollars are used, inflation is not taken into account.

As a potential station owner I would need to enter into contractual negotiations with 2000 different property owners. They would all have to be convinced that having a station in proximity to their property would raise the value by an average of 20%, from $400K to $480K. They would have to also agree to give up $40K of that growth upon the sale of their property. If 100 properties are sold each year, that equates to the required fees of $4M annually to be paid to MOOSE for their operating costs.

Assuming all of this were to happen. As each property is sold, each new owner would have to be convinced to also join the collective. After just paying an $80K premium to live near the station, they would have to be convinced that property values would once again climb another 20% purely due proximity to the train station which is already there.

Shortfalls and challenges:
-Trying to arrange contractual obligations on 2000 separate property owners would be a challenge in its own right.
-The probability that any significant percentage of the current population would agree to this is highly unlikely. Even if property values would rise, can you imagine anyone willingly handing over $40K of their property sale, especially as they are now moving away from the station. For each property owner that does not agree to work with the collective, the burden upon the remainder rises to meet the required annual operating costs.
-Property value rises, should they occur, would be primarily a one time event. Second generation buyers would be highly unlikely to agree to this sort of contract.

Additional issues:
-If you were to look at a map of Barrhaven, the only possible and logical places to put a station are in the North-East, co-located with VIA rail and OC Transpo, or in the South-West, in the new industrial business park. There is no other physical location to do so. However, by doing that, the amount of property owners drops significantly. The NE location is surrounded on three sides by Greenbelt and will never be developed. The SW location is primarily car dealerships and farmland. While it may be developed in time, the potential for significant traffic to/from the train or increase in property value is low, especially in the near term.
-As a station owner I would have limited ability to generate additional revenue. Capital costs would be relative high to build the station and associated infrastructure such as parking. There would be an ongoing operating cost of maintenance, staffing, security, etc. Revenue would consist of some coffee and donut sales primarily. Pay parking would not be possible as OC Transpo has 3 large park and ride lots in the Barrhaven area which are free. Anyone driving to Barrhaven would not pay to park when they could park for free and subsequently take a more direct method of transit into the core of the city.

In my opinion, the business case to build and operate a station in Barrhaven is not there. This would almost certainly be a similar situation in the entire urban center of Ottawa where over half the stations would be.

[Joseph Potvin]

Charles,

You have determined a set of conditions under which a station would not work under the PPR model. Do you therefore proceed to conclude that there are no circumstances under which a station under the PPR model could readily work?

I'll briefly comment on some elements of your post.

Originally Posted by Charles5

Assumptions: annual operating costs of $200M are split evenly between 50 stations. That requires each station cooperative to submit fees of $4M/year to MOOSE.

The PPR applies a common formula across all stations in all contexts. The revenue stream is based on a common proportion of the actual increments to lease/rent and sale values amongst participating properties, with the result that different stations will contribute different amounts to the aggregate revenue. (For this reason, for example, the PPR can accommodate semi-rural stations.)

Originally Posted by Charles5

-maximum household density around the rail line in Barrhaven is 1000 households per square kilometre.
-Average house prices are $400K

The PPR will be attractive to station investors/developers where the increment attributable to rail connectivity is highest. This approach creates an incentive structure that prioritizes the best-case scenarios, not the averages.

Originally Posted by Charles5

As a potential station owner I would need to enter into contractual negotiations with 2000 different property owners. They would all have to be convinced that having a station in proximity to their property would raise the value by an average of 20%, from $400K to $480K. They would have to also agree to give up $40K of that growth upon the sale of their property. If 100 properties are sold each year, that equates to the required fees of $4M annually to be paid to MOOSE for their operating costs. ... Trying to arrange contractual obligations on 2000 separate property owners would be a challenge in its own right.

You describe a good place to not put a station. Next you might consider a scenario where a station might work. Permit me to work with your numbers by putting your 2000 "different property owners" into to highrise condos. This is not the only approach that works under a PPR, but I'd just like to illustrate the point in an obvious way using your parameters. To visualize, let's pick the highrises around this Surrey Skytrain station. First, let's acknowledge that the Skytrain and MOOSE are very different, but this particular location is interesting because the highrise cluster is adjacent to a big park on the other side of the line, as well as some commercial plazas. Here's a good photo, and are article from some years ago about this complex. So for rough reckoning, let's put your 2000 owners into 10 condos of 200 units each. (For comparison of dimensions, that new highrise at the south end of Preston St in Ottawa will have 1,120 units, so I refer to ten buildings each 1/6th that size.) Now, suppose these 10 high rise condos were to be put in by 5 different developers. Do you maintain that you cannot imagine 5 condo developers reaching an agreement to jointly put together a "commercial common elements freehold condominium" corporation for the purpose of boosting their market values enough to put in a proposal to MOOSE Consortium for train service, where the train subscription fee would be built into both the condo asset price and the monthly condo fee?

Originally Posted by Charles5

For each property owner that does not agree to work with the collective, the burden upon the remainder rises to meet the required annual operating costs.

Sure, do it your way then. Place the burden for rail transit on all the taxpayers generally, whether or not they ever experience any particular benefit. Furthermore, as you implicitly recommend, go ahead and leave the windfall gains in property value with those commercial and residential property owners lucky enough to be situated where a station is placed. Or do you have a different approach to recommend for an integrated transit system for the NCR?

Originally Posted by Charles5

Revenue would consist of some coffee and donut sales primarily.

Are you sure?

Joseph Potvin
Director General | Directeur général
Moose Consortium (Mobility Ottawa-Outaouais: Systems & Enterprises) | www.letsgomoose.com
Consortium Moose (Mobilité Outaouais-Ottawa: Systèmes & Enterprises) | www.onyvamoose.com

[acottawa]

Originally Posted by Joseph Potvin

You describe a good place to not put a station. Next you might consider a scenario where a station might work. Permit me to work with your numbers by putting your 2000 "different property owners" into to highrise condos. This is not the only approach that works under a PPR, but I'd just like to illustrate the point in an obvious way using your parameters. To visualize, let's pick the highrises around this Surrey Skytrain station. First, let's acknowledge that the Skytrain and MOOSE are very different, but this particular location is interesting because the highrise cluster is adjacent to a big park on the other side of the line, as well as some commercial plazas. Here's a good photo, and are article from some years ago about this complex. So for rough reckoning, let's put your 2000 owners into 10 condos of 200 units each. (For comparison of dimensions, that new highrise at the south end of Preston St in Ottawa will have 1,120 units, so I refer to ten buildings each 1/6th that size.) Now, suppose these 10 high rise condos were to be put in by 5 different developers. Do you maintain that you cannot imagine 5 condo developers reaching an agreement to jointly put together a "commercial common elements freehold condominium" corporation for the purpose of boosting their market values enough to put in a proposal to MOOSE Consortium for train service, where the train subscription fee would be built into both the condo asset price and the monthly condo fee?

This is why I suggested in an earlier post that the lower mainland, where average condo prices are in the 600k range, would be a better application of this business model.

There are literally dozens of sites near LRT stations that will open next June where developers could build high rise condos (and not have to pay moose). Richcraft owns a large site almost on top of cyrville station (probably 10 minutes door to door to downtown) and they are building 4 story apartments because of the weak demand in the condo sector. There are also plans for major extensions that would put additional sites for potential (but unlikely) condos at the disposal of developers.

The reason why people are willing to buy condos in Surrey is because they have been priced out of areas closer to Vancouver. Ottawa is decades (at current growth rates probabably centuries) away from being in a similar situation.

[Charles5]

Joseph,

I will try to elaborate to answer some of your questions. Obviously I will never convince you but hopefully others may see some common sense in all of this.

I tried to describe an 'average' station. I chose a suburb that I am familiar with. The densities in that area are what I consider 'average', those being greater than the rural areas and less than the central city core. Therefore I chose an 'average' payment.

Yes, I determined that this is one location where a station would not make financial sense. I also believe that the same would hold true for many other locations in the suburban locations where development has already taken place, there is little room for increased densification in the near time frame. As more and more of these potential stops are eliminated, it increases the burden on the remaining stations to cover the total operating costs. Additionally, as fewer and fewer stops are viable, the travelling public will be less likely to take the train in the first place since there are fewer destinations.

You use the example of Surrey. There are virtually no places near the existing rail lines that you propose using that are anywhere near that density at this time, nor is there significant potential to increase to that level in the near to mid time frame.

Regarding condo developers and owners. People who currently own condominiums in buildings near potential train stations have no obligation to pay for anything external to the building they live in and in my mind would almost certainly resist an increase in their condo fees for such a purpose. For new developments, while I can see a clause being inserted into the condo agreements, I believe that this would significantly reduce interest in purchasing units within that condominium complex and would be detrimental to the interests of the developers.

And yes, I believe that the general public should fund public infrastructure. In other words, I am happy to pay my fair share of taxes for the common good. I pay for schools despite not having children. I pay for libraries even though I rarely use them. I do this because I believe that it is beneficial to the greater good and I believe that that is the most effective method to create infrastructure such as this.

And finally, yes I am confident that there would be extremely limited potential to generate revenue at a station in Barrhaven. As I mentioned, no one would willingly pay to park as there is already plenty of free parking at park and rides for OC Transpo. There would be limited individuals getting on the train at this location in the morning as most people would prefer to go directly on OC Transpo vs taking a less frequent and less convenient means of transport only to have to transfer to OC Transpo further down the line. Finally, if I wanted to run a daycare, yoga classes, etc I can think of many better places to operate them than in a train station. So, yes, revenue would be a few coffees and some muffin sales.

[Allandale25]

This comment is very revealing and helpful at understanding how well the Moose proponents understand transit in the Canadian context.

Originally Posted by Joseph Potvin

Sure, do it your way then. Place the burden for rail transit on all the taxpayers generally, whether or not they ever experience any particular benefit.

Are you sure?

Joseph Potvin
Director General | Directeur général
Moose Consortium (Mobility Ottawa-Outaouais: Systems & Enterprises) | www.letsgomoose.com
Consortium Moose (Mobilité Outaouais-Ottawa: Systèmes & Enterprises) | www.onyvamoose.com

[Joseph Potvin]

Originally Posted by Charles5

I will try to elaborate to answer some of your questions. Obviously I will never convince you but hopefully others may see some common sense in all of this.

Thank you for taking the time to do so. You're raising some useful issues, and providing an opportunity to clarify aspects of the plan that merit attention.

Originally Posted by Charles5

I tried to describe an 'average' station. I chose a suburb that I am familiar with. The densities in that area are what I consider 'average', those being greater than the rural areas and less than the central city core. Therefore I chose an 'average' payment.

As mentioned, the PPR is not related to 'averages'. Our objective is to identify locations based upon the greatest potential lease/rent & property asset value increments expected due to the addition of metropolitan-scale passenger rail.

Originally Posted by Charles5

Yes, I determined that this is one location where a station would not make financial sense. I also believe that the same would hold true for many other locations in the suburban locations where development has already taken place, there is little room for increased densification in the near time frame.

You may be correct. However specialists in the real property field that we are communicating with do not share your assessment.

Originally Posted by Charles5

You use the example of Surrey.

It was only to put forward as a quick illustration using your number, not to suggest the market dynamics are similar.

Originally Posted by Charles5

Regarding condo developers and owners. People who currently own condominiums in buildings near potential train stations have no obligation to pay for anything external to the building they live in and in my mind would almost certainly resist an increase in their condo fees for such a purpose.

You cannot imagine an existing development that would want regional connectivity via rail? We can.

Originally Posted by Charles5

For new developments, while I can see a clause being inserted into the condo agreements, I believe that this would significantly reduce interest in purchasing units within that condominium complex and would be detrimental to the interests of the developers.

That 'disinterest' would show up in the $-values reported in empirical studies, but the opposite is documented in all empirical studies, with certain context-specific or site-specific exceptions.

Originally Posted by Charles5

And yes, I believe that the general public should fund public infrastructure. In other words, I am happy to pay my fair share of taxes for the common good. I pay for schools despite not having children. I pay for libraries even though I rarely use them. I do this because I believe that it is beneficial to the greater good and I believe that that is the most effective method to create infrastructure such as this.

Perfect. All the companies and investors in MOOSE also believe that the general public should fund public infrastructure. The problem is that here in Canada's National Capital Region, that model has not led to a whole-region transit service. The best we can determine, the reason is due to the jurisdictional complications here. Even "P3-Canada" operates with a P3-Canada Quebec office and a P3-Canada Ontario office. Section 13 of the National Capital Act provides a way to develop what MOOSE is planning, but for reasons that are quite beyond our comprehension, they're not doing it. Go ahead and ask your Councillor or an NCC Board member why the O-Train doesn't cross the river, for example.

Originally Posted by Charles5

Finally, if I wanted to run a daycare ... I can think of many better places to operate them than in a train station.

We thought the Japanese had a really great idea with that. So have many people we've spoken with.

Joseph Potvin
Director General | Directeur général
Moose Consortium (Mobility Ottawa-Outaouais: Systems & Enterprises) | www.letsgomoose.com
Consortium Moose (Mobilité Outaouais-Ottawa: Systèmes & Enterprises) | www.onyvamoose.com

[Charles5]

Joseph,

You state that there will be a common formula across all stations with the higher grossing stations (eg: in the urban core) compensating for those who will have less growth capacity (eg: semi-rural). Ultimately there is an "average" station that falls somewhere in between. When we discuss the average however you discount that possibility indicating that you would only choose high potential areas. That seems to indicate that most of the semi-rural and suburban stops are non-viable which essentially defeats the purpose of the network.

I'm curious. Assuming 50 stations on this network with an annual operating cost of $200M (your numbers). At what point would you consider any one station to be non-viable? Would it be at 1%, 1/2% etc? There has to be a bottom line?

Along those same lines, who makes the ultimate decision which station gets to be in and which ones are out? For example: If as a station owner I can predict a $1M income stream on an ongoing basis, would I be allowed to in? Would it depend on where I was located (semi-rural vs suburban vs urban)?

I could approach this whole debate from several different angles. I am an investor/businessman, a commuter, and a property owner near a rail line. At the moment, I can't see any value in the proposed MOOSE network from my perspective.

[Joseph Potvin]

Originally Posted by Charles5

You state that there will be a common formula across all stations

Yes

Originally Posted by Charles5

...with the higher grossing stations (eg: in the urban core) compensating for those who will have less growth capacity (eg: semi-rural).

No. We take a "whole systems" perspective, which leads to network effect.

Originally Posted by Charles5

I'm curious. Assuming 50 stations on this network with an annual operating cost of $200M (your numbers). At what point would you consider any one station to be non-viable? ... There has to be a bottom line?

Yes of course. We have an internal commercial bottom line which is not for publication. Also we're refining it via the current feasibility study.

Originally Posted by Charles5

Along those same lines, who makes the ultimate decision which station gets to be in and which ones are out?

The vendor of corporate-level subscriptions to train service gets to decide, i.e. MOOSE Consortium.

Originally Posted by Charles5

I could approach this whole debate from several different angles. I am an investor/businessman, a commuter, and a property owner near a rail line. At the moment, I can't see any value in the proposed MOOSE network from my perspective.

We're not making the case that our business needs to attract the investment of each and every person in the region.

Joseph Potvin
Director General | Directeur général
Moose Consortium (Mobility Ottawa-Outaouais: Systems & Enterprises) | www.letsgomoose.com
Consortium Moose (Mobilité Outaouais-Ottawa: Systèmes & Enterprises) | www.onyvamoose.com

[Charles5]

Agree, you don't need my investment. I simply use myself as an example of the typical investor or property owner in your catchment area. If I'm not prepared to invest, I suggest that the vast majority of people similar to myself will not be willing to do so either. And despite what you say, these are the people who control the vast majority of the property assets in the areas of concern at the moment.

We can debate this continuously but only time will tell. The numbers will eventually speak for themselves.

What I see is a house of cards. 50 different collectives all dependent on one another for survival. Each of those collectives is dependent upon the property owners within their locality voluntarily funding this scheme. Human nature in itself will prevent this from happening. On top of this you are trying to run a train service where there is insufficient demand, in some locations where the corridors are already at capacity, and other corridors which require significant capital injection. You are trying to layer this network on top of existing transit that, while not perfect, seems to meet the needs of the vast majority of residents. I can't imagine the business case to be made for any one of this let alone a station operator.

[Joseph Potvin]

Originally Posted by Charles5

The numbers will eventually speak for themselves.

Stay tuned.

Joseph Potvin
Director General | Directeur général
Moose Consortium (Mobility Ottawa-Outaouais: Systems & Enterprises) | www.letsgomoose.com
Consortium Moose (Mobilité Outaouais-Ottawa: Systèmes & Enterprises) | www.onyvamoose.com

[Truenorth00]

Once again, I go back to the central question. Why the heck would someone move to a small town and then buy a condo near the train station?

Isn't the whole point of rural living to gain more (and cheaper) space? Who moves to Rockland or Chelsea to get a condo?

[acottawa]

Originally Posted by Charles5

What I see is a house of cards. 50 different collectives all dependent on one another for survival. Each of those collectives is dependent upon the property owners within their locality voluntarily funding this scheme. Human nature in itself will prevent this from happening. On top of this you are trying to run a train service where there is insufficient demand, in some locations where the corridors are already at capacity, and other corridors which require significant capital injection. You are trying to layer this network on top of existing transit that, while not perfect, seems to meet the needs of the vast majority of residents. I can't imagine the business case to be made for any one of this let alone a station operator.

More than that, it requires tens of thousands of people to change the want they want to live. People who have no interest in condos in central neighbourhoods or TODs along the LRT need to flock to condos in outer suburbs. People living in suburbs have to flock to rural areas far from the city to live in high density developments.

On top of that, People in existing neighbourhoods who may or may not have any use for this service have to sign up for HOAs and commit themselves (and future owners) to fund these HOAs.

[roger1818]

Originally Posted by Truenorth00

Once again, I go back to the central question. Why the heck would someone move to a small town and then buy a condo near the train station?

Isn't the whole point of rural living to gain more (and cheaper) space? Who moves to Rockland or Chelsea to get a condo?

In Ottawa, I tend to agree. This plan could work very well in Vancouver where people can't afford to live near the city. They may well be willing to pay a premium for rail service on a condo an hour out of town. The problem is, even in Abbotsford prices are getting very expensive.

[Charles5]

Originally Posted by Allandale25

Very helpful Charles. Maybe I missed this but did you also calculate how would have to contribute to the operating costs through a common element fee?

Allandale25

My sample case study was based in Barrhaven where the number of condo units are negligible and so I didn't include them in the mix.

Speaking of common element fees in general. For existing condo owners, they could either contribute to the collective of one of these notional groups in two ways. They could pay a portion of the sale price on their condo and in that way they would be no different than any other home owner. The other option is common element fees.

My position here is based purely on my opinion of human nature. If I'm an existing condo owner already paying condo fees, I would be unwilling to increase my condo fees for a train station regardless of how close and convenient it might be. As a train station is not part of the collective property belonging to the condo corporation, I don't believe there is any legal means to compel someone to pay. It would be purely a speculative investment which current owners would only voluntarily join and I can't imagine very many if any doing that. For new condo developments. I can see the costs of a train station significantly increasing condo fees. Once again, I don't know about the legality of any condo corporation compelling a new buyer to join in on a speculative investment which is not technically part of the common property. Once again, for potential buyers who are made aware of this fee (ie: it's not hidden someone amongst a more general fee), I would imagine this would be a significant negative factor in trying to sell units in the condo.

The math is much harder to do in the condo example as densities would increase. However, as Joseph indicates, the higher density neighbourhoods would be expected to contribute a greater percentage of the required operating costs. So, assuming the average stays the same, each unit would need to fork over $40K over 20 years. That would mean an condo fee of $2K per year or about $165/month. The numbers are pretty meaningless, because unlike the sales model, where you are at least basing it on known figures to start, here you are purely looking at what the common collective is willing to pay.

[Joseph Potvin]

Originally Posted by Charles5

speculative investment

Charles5,

At MOOSE we distinguish between property speculation ("Buy, hold, sell.") and property investment ("Buy, transform, sell.")

The PPR is based on investment defined this way, transforming disparate localities into a set of "linked localities". Regional connectivity with train service is genuine "value added" in the full sense of that term in economics.

Your other points have been previously discussed at length.

Joseph Potvin
President and General Manager | Président et Directeur général
Mobility Ottawa-Outaouais: Systems & Enterprises Inc. (The mOOse Consortium) | www.letsgomoose.com
Mobilité Outaouais-Ottawa: Systèmes & Enterprises Inc. (Le consortium mOOse) | www.onyvamoose.com

[acottawa]

So just some back-of-envelope math. To get to 200M in operating revenue with 1/20th of paying every year and a 50/50 split, there needs to be 8 billion in property increase attribuble to rail per 20 year period. Even if this number is 50k per household (which seems high), 160k households would need to sign up ( either by adding their existing house to an HOA or moving to a development near a station). If households average 3 people each' that is 480k people (or almost 40% of the cma population) who need to move to a moose development.