How Official Plans, Zoning, and Conservation Authority Regulations Impact Farm Property Values Near Urban Centres
- SWI Appraisals
- Mar 20
- 4 min read
As urban centres expand, farmland on the city’s edge becomes highly desirable for future development, often driving property values beyond its agricultural worth. While farmland is traditionally valued based on soil quality, crop production, and infrastructure, properties near urban growth boundaries experience increased market value due to potential rezoning and development prospects. However, factors such as Official Plans, Zoning Regulations, and Conservation Authority restrictions play a crucial role in determining whether a farm’s future use will be agricultural or urban.
1. The Role of Official Plans in Farm Property Valuation
An Official Plan (OP) is a municipal blueprint that dictates long-term land use, including areas designated for agriculture, urban expansion, or employment growth. This planning document is crucial for farm real estate appraisers, as it influences whether a farm property will retain its agricultural value or appreciate based on speculative development demand.
Prime Agricultural Land Protections – If a farm is designated as permanent agricultural land, it is less likely to be rezoned for development, keeping its value tied to farmland market trends rather than urban expansion.
Urban Growth Boundaries – Farmland within or adjacent to a city’s designated growth area may see increased interest from developers, investors, and builders, leading to higher property values driven by speculative demand.
Future Development Areas – Some farms fall within "future employment lands" or "residential expansion areas", which can significantly impact land valuation even before zoning changes occur.
How It Affects Farm Appraisals:
A farm real estate appraiser must assess whether the Official Plan supports future urban development, which can elevate land values beyond traditional farming use.
2. Zoning Regulations: The Legal Framework for Land Use
Zoning regulations determine how a farm property can be used today. Even if an Official Plan suggests future urban expansion, current zoning laws dictate whether land can be developed or if it must remain in agricultural use.
Agricultural Zoning (A1, RU, etc.) – Farms under strict agricultural zoning are limited to farming, restricting immediate urban development potential and keeping values aligned with traditional farm real estate appraisals.
Holding Zones (H Designation) – Some properties are zoned for future development but require municipal approvals, infrastructure investments, or environmental assessments before rezoning can proceed.
Re-Zoning Possibilities – In many cases, developers purchase farmland in anticipation of zoning amendments, leading to higher valuations based on speculative land use changes.
How It Affects Farm Appraisals:
A farm property near an urban boundary with potential for rezoning to residential, commercial, or industrial use often carries a higher market value than a strictly agriculturally zoned property. However, if zoning restrictions are unlikely to change, the land retains a farmland-based valuation rather than development-based pricing.
3. Conservation Authority Regulations and Environmental Restrictions
While Official Plans and Zoning Regulations set the groundwork for land use, Conservation Authority policies introduce environmental protections that may limit development potential and impact property valuation.
Floodplain and Wetland Designations – Farms with wetlands, floodplains, or conservation buffers may face severe restrictions on development, preventing rezoning regardless of urban expansion trends.
Soil Erosion and Environmental Protection Areas – Certain farms near rivers, lakes, or forests may have land use limitations that restrict how much of the property can be developed.
Permitting and Compliance – Even if a farm is adjacent to a growing city, it may still be subject to conservation authority permits before any land use changes occur.
How It Affects Farm Appraisals:
A farm real estate appraiser must evaluate whether environmental regulations will prevent or limit development. Even if a property is near an urban growth area, significant conservation restrictions may keep values tied to farming rather than speculative development.
Balancing Agricultural and Speculative Land Value
Farm properties near urban centres often have two competing valuation factors:
Agricultural Land Value – Based on farm productivity, soil quality, and existing farm infrastructure.
Speculative Development Value – Influenced by municipal planning, zoning, investor interest, and urban expansion potential.
A farm real estate appraiser must determine which factors carry more weight based on current land use policies, Official Plans, and the likelihood of zoning amendments.
Why Hiring a Farm Real Estate Appraiser Is Critical
Not all real estate appraisers have the knowledge and expertise to accurately value farm properties near urban areas. Residential appraisers often lack the ability to assess the impact of Official Plans, Zoning Regulations, and Conservation Authority restrictions on farmland value. A qualified farm real estate appraiser understands:
How municipal planning policies affect land use.
The likelihood of future zoning changes and their effect on land value.
Environmental restrictions that may prevent development.
The balance between agricultural productivity and speculative real estate pricing.
Conclusion
As farmland on the edge of urban centres becomes increasingly sought after for future development, understanding the role of Official Plans, Zoning, and Conservation Authority regulations is essential for accurate property valuation. While developers and investors may drive up market prices, strict zoning laws and environmental protections can limit urban expansion potential, keeping some farmland tied to traditional agricultural values.
For farm owners, buyers, and investors, working with an experienced farm real estate appraiser ensures that land is properly valued based on both current agricultural use and future speculative potential. Whether selling, buying, or refinancing, a professional farm appraisal is the key to making informed land investment decisions.
PS:
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Ready to get a handle on the value of your farm? Contact farms@swiappraisals.com or call 519-763-5956 to discuss!
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DISCLAIMER: The predictions of farmland values for the upcoming year presented in this newsletter are solely the opinions of S.W. Irvine & Associates. These opinions are for general information purposes only and should be regarded as such. They are based on our analysis of current market trends and historical data, but they do not constitute guarantees of future performance. S.W. Irvine & Associates, is not legally bound by these opinions, and they should not be used as the sole basis for any financial decisions.
For individuals or entities with a more vested interest in the precise value of specific properties, S.W. Irvine & Associates offers professional appraisal services. Our team of experts can provide a detailed, property-specific analysis to help you make informed decisions. For more information please contact us at farms@swiappraisals.com | 519-763-5956 or submit your appraisal request here.
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