Q5, specified: is the BC–Quebec land-share gap real, or an assessment convention?
2026-07-19 · wave 32 · ACADEMIC lane · turns the question flagged in w21 into a pre-registerable research design, with our nine-roll dataset as its raw material.
The measured fact that demands explanation
Nine full city rolls (data/land-shares.csv, 1.4M parcels) show two tight,
far-apart clusters in the land share of assessed property value:
- BC: Surrey 78.4%, Vancouver 75.4%, Langley Township 73.5%, Victoria 69.2%
- Quebec (residential): Quebec City 35.6%, Laval 35.5%, Gatineau 34.0%, Montreal 33.2%, Sherbrooke 27.3%
- National accounts join (w3): 52.7% — between the clusters.
The in-province clustering is remarkably tight (BC within 9 points, Quebec within 8) while the between-province gap is ~40 points. Everything downstream — incidence, the container arithmetic, the two-lots story — treats this as an economic fact. Q5 asks: how much of it is?
Three hypotheses (not mutually exclusive)
- H1 — Real scarcity. Metro Vancouver prices its mountain-ocean-ALR supply constraint into ground region-wide (w28: suburb ≥ core); Quebec's plex traditions, permissive multiplex zoning, flat geography, and rent regulation keep structures dominant. Independent echo: a US loose-supply city (Richmond, VA — measured incidentally in w29) sits at ~27%, right in the Quebec cluster.
- H2 — Allocation convention. Mass-appraisal systems value the total most reliably; the land/building split is partly a modeling convention. BC Assessment's methods may allocate the residual toward land where Quebec's MAMH-regulated rolls allocate toward buildings. If so, part of the 40-point gap is bookkeeping, not economics.
- H3 — Reference-date vintage. Quebec's triennial rolls value at market reference dates 1.5–3 years old; land appreciates faster than structures in rising markets, so stale reference dates mechanically understate land share. BC's roll is 12 months old at publication. This can explain some points of gap, not 40.
Four tests, all feasible with public data
- T1 — Vacant-parcel benchmark (within-city, within-regime). Vacant parcels' assessed values are nearly pure land (our parse self-checks: 97–99% in every roll). For neighbourhoods with both vacant and improved parcels, compare improved parcels' implied land value per square metre against adjacent vacant parcels' assessed value per square metre. If improved-parcel land allocations track vacant benchmarks, the convention is anchored to observable land prices (H2 weak); systematic gaps measure the allocation bias directly. The Quebec rolls carry lot areas and the BC city datasets carry lot sizes — this is computable from data we already have.
- T2 — Teardown residuals. Properties sold and demolished shortly after sale trade at pure land value regardless of assessment convention. Compare sale prices of identified teardowns against their assessed land values in both regimes (building-permit + sales linkages; Vancouver and Montreal both publish permit data). The urban-economics literature uses exactly this design for land-value measurement.
- T3 — The Ottawa–Gatineau natural experiment. One labour market, one river, two assessment regimes. Ontario publishes no split, but sales of vacant land clear on both banks at market prices. A vacant-land sales comparison (price per m², controlling for zoning/servicing) tests whether the economic land-value gradient is continuous across the river while the assessed land shares jump — the cleanest possible H2 detector.
- T4 — Assessment-to-sale ratio study on vacant sales. The standard assessment-quality method: for vacant-land sales in each regime, compute assessed-value/sale-price ratios. Ratios near 1 with low dispersion in both regimes ⇒ land values are well-measured where directly observable, pushing any H2 bias into the improved-parcel allocation specifically (where T1 catches it).
What each outcome would mean for Groundshare
- H1 dominates (gap is real): the incidence machinery, container arithmetic, and regional politics stand as measured. The two-lots story gains a citation.
- H2 material (convention-driven): the within-regime incidence ordering survives (conventions are uniform within a province), but cross-province comparisons and the national 52.7% weighting need re-estimation on a harmonized basis — which T1/T4 would themselves provide. Quebec households' measured land holdings would rise, moving some Quebec owners toward the crossover; we would publish that correction like the previous four.
- H3 material: mechanical adjustment by reference-date indexation; narrows the gap a few points; no structural change.
Honest prior: H1 is doing most of the work (the supply-constraint pattern reproduces within BC at every distance from downtown, and the US echo point is regime-independent), H3 a few points, H2 unknown and worth measuring — which is why this note exists.
Pilots executed, both sides (w33–w34): T1 ran on Sherbrooke
(analysis/q5-t1-sherbrooke.md) and Surrey (analysis/q5-t1-surrey.md).
Size-matched results: Sherbrooke 1.06 (improved-parcel land allocations
within ~6% of same-neighbourhood vacant benchmarks), Surrey 1.11 (~11%,
coordinate-grid micro-markets). Both directions of H2 — Quebec suppression
and BC inflation — fail their cheapest test. The vintage lag is measured
(2.5 years, w33). Working conclusion pending the heavier tests: the gap is
substantially H1 (real scarcity) with a few points of H3; the spectrum's
allocations are checked against market-adjacent benchmarks at both ends.
Why this is publishable regardless of Groundshare
A harmonized, open, parcel-level comparison of land-value allocation across
two Canadian assessment regimes does not exist in the literature. It matters
for property-tax design, for the split-rate debates, for national balance-sheet
land estimates (StatCan's own land series leans on assessment data), and for
any future LVT discussion in Canada. The dataset is already assembled and
reproducible (data/land-shares.csv, tools/parse_quebec_roll.py); T1 and T4
are computable by one graduate student from open rolls.
Sources
- Measured rolls and parser:
data/land-shares.csv,tools/parse_quebec_roll.py(w9–w29); city sources listed per-row. - Supply-constraint reading:
analysis/surrey-land-share.md(w28),analysis/montreal-land-share.md(w21). - Ottawa–Gatineau transparency asymmetry:
analysis/assessment-readiness.md(w14/w22/w27),analysis/quebec-rolls.md(w24). - Teardown-based land valuation in the literature: e.g. Dye & McMillen, "Teardowns and land values in the Chicago metropolitan area," Journal of Urban Economics 61(1), 2007 — the design T2 replicates in Canadian data.
- Assessment-ratio methodology: IAAO, Standard on Ratio Studies (the T4 template).