Grand Forks residents in flood-prone areas subject to land buyouts will be paid a “post-flood value” for their properties, according to the city’s website.
But the news is frustrating to many affected residents, who had hoped for a pre-flood payout, knowing that property values have been impacted by last year’s disaster.
“The City advocated for the pre-flood value, but the best it could get from the provincial and federal funding streams was the post-flood value,” a FAQ page on the city’s website reads.
The Boundary flood recovery effort was awarded $53 million in grant monies Wednesday from the federal, provincial and municipal governments for property buyouts, riverbank fortifications and diking.
Twelve to 14 million dollars of that sum will be used to buy up approximately 80 Grand Forks and rural area properties, either fully or in part, at “fair market value.”
According to Oliver Berkeley, a consulting partner with Keystone Appraisals, the prices of properties subject to buyouts must be valued based on their current use, ignoring the fact that they will be stripped of residential or commercial value moving forwards.
The price, Berkeley said, is valued at the land’s “highest and best use.” However, Berkeley explained that the subject properties “have a market [flood] stigma attached with that,” and therefore their values will be impacted by that risk.
Last fall, Keystone Appraisals was hired by the City of Grand Forks to appraise more than 110 flood-affected properties in order to estimate a dollar figure that the city could use in its application to the Disaster Mitigation Assistance Fund, the grant that makes up $49.9 million of the $53 million announced Wednesday.
Property owners whose land was appraised should have received a copy of the Keystone appraisal from the flood recovery team, said Cavan Gates, a communications officer with the Boundary Flood Recovery Team, but that number doesn’t necessarily reflect what property owners can now expect to receive in the buyout process.
Because the estimate given to the city from Keystone was used in the grant application, said Gates, it could provide a rough idea as to what fair market value for a given property could be.
Legal protections for property owners, renters
The B.C. Expropriation Act — the legal document resorted to if the city and land owners can’t come to an agreement — defines “fair market value” as “the amount that would have been paid for it if it had been sold […] in the open market by a willing seller to a willing buyer.”
For example, if the City of Grand Forks were buying a residential property in North Ruckle, it must value the land as if it were purchasing any other land parcel with the intent of continuing to use it as a residential property.
Further, the act states that determining the market value of a property must not reflect in the fact that neighbouring properties will also be bought up.