Real Estate Boom Rolls North

The bathtub at Estrella Hepburn's house is out on the deck. When she's immersed in the steamy hot water, she's hidden behind sand dunes on a secluded piece of land just back from the Sangan River and the northern beaches of Haida Gwaii.

"It's unconventional," says her partner Aaron Riis, "but we don't get that many visitors."

A lot of things about the Tow Hill Road community are unconventional, so when a process server walked up Hepburn's front step one evening to try and serve a summons to a local man named in a lawsuit for obstructing work on a subdivision, he was a little surprised to find a woman and her two children naked in the tub.

The process server, who was sent by the developer NIHO Land and Cattle Co., was on the wrong lot, but he didn't leave quickly when told of his mistake. Hepburn felt shocked and intimidated and threatened to call the police.

But NIHO officials had had a shock of their own two days before. On August 28, several of the men, women and children who live on parcels of private land flanking the northern beaches of Naikoon Provincial Park, stopped a feller-buncher from hacking down moss-covered trees along a magical stretch of road. The trees were in the way of a hydro line for seven new lots in a development that NIHO is marketing as the last affordable oceanfront properties in North America.

'Forgotten place in time'

NIHO president Rudy Nielsen, whose company is the largest private owner of recreational land in British Columbia, snapped up several hundred acres of island property over the last 20 years. The realtor and outdoor recreation enthusiast lives by his company motto, "Don't wait to buy land. Buy land and wait."

And wait he did, in anticipation of today's market, when people seem poised to pay a premium for a piece of unspoiled wilderness.

Nielsen called the Queen Charlottes "a forgotten place in time" in a recent Globe and Mail article, a remote corner of B.C. where buyers only started catching on to the incredible beauty and uniqueness (and cheapness) a couple of years ago.

His seven beachfront properties known as Naikoon Estates, each about four acres, went up for sale on August 15 at prices ranging from $295,000 to $375,000. He has offers pending on most of them.

Although the development on the beach has been slowly evolving from hand-hewn cedar shacks with nicknames like The Mouse and the Gingerbread House, to a few grand show homes with stone fences and gates, back-to-the-landers and other long-term residents who live in this paradise are still reeling from this fresh wave of interest in their back yards.

Locals say 25 years ago a five-acre lot beyond the power lines went for $10,000 or $15,000. Then, one year, someone sold a lot for $100,000 and the prices skyrocketed. Ray Chipeniuk, adjunct professor at UNBC's School of Environmental Planning says the community is experiencing a phenomenon that is sweeping North America.

Chipeniuk says second-home markets have been booming over the last 15 years and the binge has reached as far as the Yukon and now the Queen Charlotte Islands.

"A lot of North Americans have experienced they can make a lot of money by getting into a community early on and then years later selling out for huge profit," he says.

Driving the boom

According to the National Association of Realtors in the United States, there were 3.34 million second-home sales in 2005, up 16 per cent from 2004. Second-home sales boomed nearly twice as fast as new single-family dwellings and four times faster than resale homes.

Their report also says that typical 2005 vacation-home buyers were 52 years old, earned $82,800 and purchased a property that was a median of 197 miles from their primary residence.

Although baby boomers are often looking for future retirement homes, Chipeniuk says the second-home real estate market can work like a pyramid scheme. As long as enough people believe they can make money by buying homes in remote communities, the amount of second homebuyers will remain high.

Chipeniuk admits there can be some positives for locals, especially for those who have been waiting years to sell homes in a depressed economy, but generally second-home buyers bring little more than a mini-construction boom and some minor economic activity during their two-month out of the year stays.

Back on Haida Gwaii. poet Susan Musgrave says that what angers most people about the development at North Beach is that NIHO is marketing the Naikoon Estates as trophy properties.

"It's a most disgusting term," she says. "It assumes you have many and this is the one you show off."

Although Musgrave is a second homeowner herself (her other home is on the Saanich Peninsula), she has lived on and off on Haida Gwaii since the 1970s. She says her philosophy is about living with integrity in a community.

Thanks to earlier developments, by NIHO or Nielsen's other company Landquest, most of the access to the beach has been blocked off and property taxes have risen 100 per cent.

It seems very opposite to how life has always been lived in the neighbourhood, she says.

"Legally, we don't have any grounds to do this," Musgrave said of the protest that took place on NIHO's private land. But she thinks there is an ethical and spiritual argument to be made for having development move at a slower pace.

New to blockades

Nielsen, who has been subdividing properties for 40 years, says this was the first time he'd ever had a blockade on his hands.

He maintains that he had no idea there was a problem with his development, until protesters jumped in front of his machines. Protesters, on the other hand, said they had no idea there was a hydro line going in that would take out the Hobbit-like forest canopy, until the trees started to come down.

"Waiting until a feller-buncher is taking down trees is not a good time to talk," admits Chris Ashurst, a member of the Tow Hill Management Committee, which makes recommendations to the Skeen Queen Charlotte regional district, the body in charge of approving development in the area. (New committee members were elected in February after a years-long hiatus.)

He says the committee responded to a call for input on the development in May, after receiving only three days' notice. They worked night and day to put in their two cents -- one key point was that no part of the canopy on Tow Hill Road should be cut for any reason. Nielsen says they never saw the letter and had no idea the committee even existed. Ashurst and his committee are still investigating how this could be true, but he suspects the tangled bureaucratic process broke down.

Nielsen says he jumped through hoops for the Ministries of the Environment, Health and Highways, as well as the Regional District, for five years. "We never knew there was a Tow Hill regional board," he says. And apparently no one told him.

By many standards the company has done a pretty good job. There are only seven lots where there could be up to 25; and there are strong covenants about building back from the beach to protect the sensitive sand dunes, about how to put in septic systems to protect ground water and nearby rivers and how many trees can be cut down on each lot.

The company seems to have done its homework and is being considerate of the delicate beach ecosystem. But they missed one important step: being sensitive to their neighbours.

'Did we win?'

The community was especially appalled by the summons. The 24 named on the writ signed a petition demanding work stop until the developers met with the Tow Hill Road Management Committee. But rather than take the opportunity to meet his future neighbours to discuss their concerns, Nielsen visited his lawyers instead. Those named on the writ were told they would be liable for any offers lost on the beachfront lots as a result of their protest.

People felt like they had been SLAPPed. If Nielsen persisted, many of the young subsistence lifestyle residents would stand to lose their own properties.

Not only that but they'd lose the forest canopy they'd been trying to protect too.

Tow Hill Road runs out to popular tourist destinations like Agate Beach, Tow Hill and Rose Spit since he arrived. The road used to be narrow and covered by a mossy canopy of spruce and cedar for the 20-kilometre stretch between Tow Hill and Masset, but, little by little, that has changed. Residents say opening the canopy will turn what is now an idyllic shade-covered road loved by tourists into a dusty alder-infested mess.

In the end, the developers met with the management committee and agreed to some concessions, including shortening the length of the hydro clearing and putting a covenant on the final pole to make it more difficult for the hydro line to proceed any further. They also agreed that all future development plans (NIHO has two more subdivisions planned in the area) would be discussed in the pre-planning phase with the committee.

"Did we win? It doesn't sound like it," says Ashurst. But he sees something positive in the whole mess. "We need to make use of the public energy and direct it into a community plan. Sometimes it takes people getting scared to foment public participation," he says.

An Official Community Plan, outlining where and what kind of development can take place, gives the community a legal leg to stand on when looking at developers' proposals, he says. NIHO has even offered to help the committee achieve this goal.

'Vacuum gets filled'

Arnie Bellis, vice-president of the Council of the Haida Nation, followed the conflict with interest.

He was glad to hear the two parties came to a point where they could work together. But he says he's heard from others who are concerned about the notion that developers are moving in on some kind of last frontier on Haida Gwaii. Each community, he says, needs a plan to guide developers. The CHN is working on a process of its own.

"Without something to go by, the vacuum gets filled with the motivation of money," he says.

Greg Halseth, another UNBC professor in the geography department, says recreational properties are part of the Canadian imagination. Cottage country is part of how Canadians understand the rural landscape and some communities have welcomed the waves of seasonal migrants with open arms.

To be prepared for waves of development, he says communities need to sort out what sort of private properties are available for subdivision and what the local zoning laws are.

Secondly, all small places should talk about what they see as the future of their communities in whatever way possible, he says.

"You need a sense of what you are willing to accept, so the community can speak with a clear voice," he says.

Waterfront scarce

In hindsight, Nielsen says he understands where the Tow Hill community is coming from, but he also knows the march of urbanites to the countryside is on and no one can stop it.

Believe it or not, he says, recreational property, especially waterfront, is scarce in B.C. with 95 per cent of the land base owned by the Crown.

"There are very few prestige properties in B.C.," he says. With disposable incomes on the rise, especially among baby boomers who are set to retire, B.C. is turning into the playground of North America.

Nielsen, who, like many, is tired of the smog and pollution in the city, is building a house himself on one of the plots. He'd move to the islands in a minute if he weren't so busy enjoying his job, he says.

But people who move to idyllic retreats want to close the door behind them. Even he has been horrified to learn that people are dividing his earlier subdivisions into smaller lots.

"I hope to Christ nobody who takes on lots on the [Naikoon Estates] turns around and subdivides them," he says.

Heather Ramsay, based in Queen Charlotte City, is a contributing editor to The Tyee. Read her previous articles here.

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