Vacant industrial land analysis in the City of Winnipeg : fiscal implications and policy alternatives
Loreth, Larry F.
The determinants of industrial location decisions within a metropolitan area may have important policy implications for government at both the municipal and provincial levels. Therefore, an understanding of what underlies location decisions is essential for policy makers. In order to accomplish this goal, both demand and supply factors must be considered. Analysis of land price determinants combined with the annual absorption and existing supply of vacant industrial land will enable civic policy makers to determine how Winnipeg can effectively meet industry's present and future demands. An adequate supply of vacant 1and which exists in appropriate locations is essential to promote industrial growth within any metropolitan centre. However, industry will not be enticed to develop in locations that are unable to provide the essential ingredients for sustained industrial growth. A thorough understanding of what these ingredients are, enables government to determine why industry chooses one specific site relative to another. Effective development policy goes well beyond land development, which is premised upon the supply side of the market and merely identifies the need to ensure a significant range of locational choice and potential for different intensities and standards of development as a means of encouraging industrial growth. Maintaining a significant inventory of industrial land in all sectors of the city is but part of the answer to resolving Winnipeg's plan for future industrial growth. Market segmentation is a key element in determining how government should promote an efficient use of public resources in the field of industrial development. If the existing supply does not match demand requirements regarding locational factors then aside from increasing the supply of available industrial land in appropriate locations, two avenues of fiscal management may be pursued in an attempt to re-distribute the demand for industrial land to areas which may presently contain an excess supply of appropriate sites. Land cost reductions and property tax incentives have both been effectively used in the past by governments in order to attract industry to specific locations within municipal boundaries. can such incentives be effectively used to re-distribute the demand for industrial land in Winnipeg? The model developed within this study analyzes price determinants of industrial land and clearly identifies the influence of property taxes and zoning on the demand for such land in this city.