A recent investigation conducted by Vancouver’s auditor general has revealed significant financial oversights in the city’s management of publicly-owned land sales.
The audit uncovered inconsistencies in the city’s sale policy, with certain details being kept out of public view. It was also discovered that crucial information was not adequately shared with council members, leading to the undervaluation of some properties during sales.
City of Vancouver Auditor General Mike Macdonell emphasized the importance of accuracy in land transactions, especially in a region like the Lower Mainland where property values are high.
The report highlighted instances where land was sold for less than its assessed value, attributing this to the lack of interest collection from buyers as per council policy. Macdonell pointed out that the city missed out on potential revenue of up to $25 million due to the failure to charge interest on extended contracts.
The investigation focused on 16 transactions spanning from 2016 to 2024, including a notable case involving the sale of a property on Beach Crescent. In this particular deal, a staff miscalculation resulted in a $13 million loss for the city, while an additional oversight led to the city assuming a $12.1 million community amenity contribution that was the buyer’s responsibility.
Furthermore, the report revealed that in six of the transactions analyzed, the council approved sale prices that were below the appraised values, with discrepancies ranging from $50,000 to $2 million.
According to UBC political science professor Stewart Prest, these errors can have significant implications, as they impact the financial resources available to the city and its residents. Maximizing the value of land assets during sales is crucial to ensuring optimal returns that can benefit various city initiatives and potentially influence tax rates.
In response to the findings, the City of Vancouver Manager’s Office acknowledged the need for improvements in their real estate practices and expressed agreement with the proposed enhancements outlined in the report. Recommendations include establishing a clear council-approved strategy for land sales and implementing transparent policies to streamline future transactions.