Large cities like Vancouver are beginning to deploy 3D modeling and analytics for building valuation assessments. This new approach offers many insights and advantages for understanding building value that were previously difficult to obtain. "Using 3D geospatial modelling, they’ll be able to compare assessment values to actual sales prices and incorporate and analyze numerous other variables". Jeff Thurston interviewed Jason Grant and Hart Mauritz of BC Assessement in British Columbia and Michael Lomax of Esri Canada to learn about this new 3D-based approach and how the project is proceeding.
3DVW: Can you explain how BC Assessment was established and where it fits into the provincial structure? How did you personally become involved in the organization? What motivated you?
JASON GRANT: “BC Assessment is British Columbia Crown Corporation responsible for accurately valuing and classifying all properties within the province, producing assessments that are fair, equitable and uniform. There are nearly two million properties in British Columbia with a combined value of over $1.14 trillion.
Founded in 1974, we operate at arm’s length from the provincial government in order to ensure the independence and fairness of our property assessments. On December 31, BC Assessment delivers nearly 2.2 million annual assessment notices providing property owners with the fair market value of their property as of July 1 of that year. All property assessments are publicly available on our website, bcassessment.ca, or from any of our sixteen offices covering all regions of British Columbia’s vast geography.
Most importantly, BC Assessment’s annual assessment roll provides the foundation for over 300 taxing jurisdictions to raise more than $6.6 billion in property taxes each year. This revenue funds the many community services provided by local governments around the province, including the public school system.
Of note, 2014 marks our 40th anniversary and our history has seen us successfully grow into a leading, internationally-recognized property assessment organization with a well-established reputation for accuracy, fairness, and uniformity in our assessments. In fact, only about one per cent of British Columbian property owners formally appeal their assessments as there is strong confidence in how we do our work.”
HART MAURITZ: “Two years ago, BC Assessment created a Senior Executive role accountable for a new portfolio called ‘Business Innovation’. The initial mandate was to lead corporate-wide changes that were necessary to implement a set of ambitious strategic targets related to customers, employees, partners and how the work gets done. I had been a Partner at KPMG Management Consulting and the Strategy & Operations Service Line Leader in Western Canada for a number of years.
When Connie Fair, CEO at BC Assessment, approached me about joining her Executive team, I realized that this was a unique opportunity to shape the future of a company by taking it to a new level of performance and creating tremendous value to its customers and stakeholders. I particularly liked the innovation angle, which aligns well with my preference for working creatively and driving hard business results.”
JASON GRANT: “When I first joined BC Assessment, I was looking for broad exposure to all the different aspects of the real estate industry. Since then, I have stayed with BC Assessment for over 22 years due to the diversity of the work, our strong focus on our customers and a corporate culture committed to innovation.
Since our creation in 1974, the total British Columbia assessment roll increased from $42 billion to over $1 trillion. We have grown from serving owners of 800,000 properties to almost two million properties today and we have done that with fewer staff than we started with. That takes a strong service orientation, top talent, innovation and commitment to technology and that’s what BC Assessment is all about.”
3DVW: What is the primary objective of BC Assessment? What caused you to become interested in questions related to 3D assessment?
JASON GRANT: “Our mission is to create uniform assessments which are relied upon to build sustainable communities throughout British Columbia. Financing of local government community services in British Columbia is done through local property taxes. In order to calculate the amount of tax that each property must pay, taxing authorities need to be provided with independently-produced, highly reliable property data including values and classifications.
Our objective is to ensure the accuracy of that data through our corporate values of integrity, transparency, impartiality and innovation. In terms of innovation, we are all about supporting a culture of continuous improvement.”
HART MAURITZ: “Shortly after I started at BC Assessment, I became aware of some of the work Esri was undertaking in 3D modelling of city landscapes and buildings. When I saw some early stage video animation at last year’s Geographic Information Systems (GIS) /Computer-Assisted Mass Appraisal (CAMA) Conference, I quickly sensed that there was a technology emerging that promised assisting us in addressing some assessment challenges. One of those challenges is how we can maintain current data about a property, which affect the assessed value.
Strata units (condos in multi-unit structures) are one such challenge, as we do not have the resources to physically inspect them on an ongoing basis, and key value drivers, such as view from the windows or balcony, cannot be easily determined. The ability to do this work from your desktop has been intriguing. When Esri told us that they were in the process of building a model for the Vancouver Downtown peninsula with over 40,000 strata units and wanted to explore its usefulness for an assessment organization, we wanted to be part of this to determine the solution’s innovative potential.”
3DVW: The use and application of geographic information systems for understanding land property assessment in 2D has been around quite a while. What do you expect 3D will bring to the picture and how will it help both buyers and sellers?
Michael Lomax: “3D GIS will revolutionize property assessment. It will enable the user to visualize and analyze variables for stacked properties such as high rise condominiums and commercial buildings. This capability does not currently exist, which results in appraisers and assessors having to look at spreadsheets and reports to determine the valuation effects of stacked properties. Ultimately, it will allow faster, cost-effective and more accurate analysis of complex buildings (buildings which are divided up by legal title and individual ownership or occupation) and individual units.
Assessors will be able to consume detailed valuations using 3D geoprocessing and analytics right from their desktop without the need for onsite inspections. Using 3D geospatial modelling, they’ll be able to compare assessment values to actual sales prices and incorporate and analyze numerous other variables such as sun exposure, view and floor height on a unit-to-unit basis.
With more accurate assessments based on these variable factors, users such as property assessors, appraisers, realtors, developers, city government officials and others can make more intelligent decisions about multi-unit, stacked properties. This also helps users to understand the differences in the prices of units that may seem to be identical and help them decide why value differences are occurring in the marketplace.”
3DVW: Do you expect that insurance rates will be connected to this type of assessment?
JASON GRANT: “Generally, our property information is heavily relied upon by property owners, realtors, financial institutions and many other interested parties such as insurance companies. Our flagship online service, e-valueBC, is free and openly accessible. It allows users to check and compare assessments, sales and basic inventory information for all properties in the province.
When researching on a real estate-related matter, some financial institutions will even waive the requirement for a private appraisal and approve lending simply based on BC Assessment listed values. Insurance companies are also likely to find this data useful when making determinations about properties and rates for their clients.”
3DVW: In a sense, this kind of information in 3D would seem quite valuable in regions like British Columbia where the topography ranges from ocean beaches to some of the highest mountains in Canada. Would organizations in flatter places have a need for this approach too?
Michael Lomax: “Yes, buildings in flatter areas can also benefit from 3D geospatial modelling because the prices of units in these buildings are set in the same way as units in topographically diverse areas in that values are affected by views, sunlight, location and topography, for example. Using 3D GIS, valuations can be more accurately conducted by analyzing these key drivers of value.”
3DVW: Are there other agencies in the province interested in what you are doing with 3D assessment?
JASON GRANT: “BC Assessment is continually focussed on ensuring our data is of the highest possible quality for all our client groups or anyone else seeking property information. Providing optimally reliable data through better technology means our information becomes increasingly more valuable to a broader range of clients whether they be external partnerships, taxing jurisdictions, private organizations or the general public.
In fact, our strategic direction is focussed on rapidly pursuing enhanced data quality and expanded partnerships. Data quality enhancements obtained as a result of our newest uses of technology will help further these objectives.”
3DVW: Can you briefly explain how the technology works or is applied to this kind of work?
Michael Lomax: “Assessment Analyst 3D is based on Esri’s ArcGIS platform. It is hosted on Esri Canada cloud infrastructure and does not require any software or data to be installed on the client’s network. Users access it through a Web browser interface.
Using the client’s datasets, the solution generates a 3D Web scene that incorporates and levers the power of complex 3D buildings. A complex building is where both the building and units are represented using physically (accurate building and unit measurements and spatially correct (accurate point on the earth for each unit). Users will be able to select data to display, navigate the 3D Web scene and visualize the data and analytics available at different scales.
These complex 3D models of strata buildings allow appraisers to visually analyze the effects of key drivers of value, such as view and floor height, on a unit-to-unit basis, without having to leave their office. Appraisers can also use this solution to audit and correct data discrepancies, leading to more precise assessments.”
3DVW: Are there specific visualization benefits that 3D GIS brings to the assessment effort?
Michael Lomax: “Not only can 3D GIS represent data as complex 3D models with accurate spatial context, it also integrates spatial analysis tools that increase the accuracy of valuations and facilitate the discovery of missing or incorrect property data.
Assessment Analyst 3D introduces complete visualization of properties in 3D, enabling users, such as appraisers, assessors, realtors and developers to see spatial relationships within the data. For example, they’ll be able to visualize if condominiums close to an elevator have a lower value than those farther away.
Other examples include things such as value changes by floor, by side of the building or by location within the building (interior vs. corner). The ability to visualize these value changes or inconsistencies within the data allows the user to make smarter, more informed business decisions regarding valuations.”
3DVW: Once you understand the 3D dynamics at work through improved assessment, what do you think the next steps will be? Where will this work lead?
Michael Lomax: “This project with BC Assessment is paving the way for the creation of a self-adjusting model that can predict what the assessment value should be given a set of criteria. That is, as more information becomes available, such as more sales data or additional criteria affecting valuations, the model would be able to improve its output.
As well, there are some criteria that are not easily quantifiable, where an assessor may use their experience and intuition when making use of such criteria for valuation purposes. Let’s take view as an example. With all things being equal, one might think a view of the water would lead to a higher valuation than a view of the building next door.
This project will look into quantifying that view and bringing some science and objectivity to an otherwise subjective estimate of the degree or value effect of the view. Part of this project is to enable such criteria to be identified and quantified so it can be entered as a variable into the model and lead to more accurate science-based valuations.
Ultimately, the technology will allow multiple users to connect to an established 3D scene or basemap and publish or consume information to and from the scene. This technology will provide the medium to allow and convey more information about real estate to users. With cities becoming more dense and complex, this technology will also make the sophistication (building, displaying, analyzing and valuation) of these complex cities more real, precise and informative for users.”
3DVW: Are there any other unique challenges that BC Assessment faces where this kind of 3D approach might also prove useful?
JASON GRANT: “Being responsible for a continually increasing number and complexity of properties always requires innovation. There is potential to use this technology for any property type in which rental rates or market value are affected variables that are traditionally only verifiable by an internal inspection. To determine correct assessments, having accurate viewable data is vital for a variety of property types such as office buildings, single family dwellings and rental apartment buildings.”
Jason Grant is Regional Assessor-Vancouver Sea to Sky, BC Assessment. Jason has been with BC Assessment since 1991. He is the Regional Assessor for the Vancouver Sea to Sky assessment region and the Chair of the corporate Senior Leadership Team. He oversees the creation of annual property assessments for over 320,000 properties worth approximately $375 billion. Jason is President-Elect of the Real Estate Institute of British Columbia and an Executive member of the British Columbia Chapter of the Canadian Property Tax Association. He holds the AACI and RI designations and actively participates in numerous real estate industry functions, seminars, conferences and charity events. Jason has diplomas in Urban Land Economics from UBC and in Real Estate Studies from BCIT.
Hart Mauritz is Vice President Business Innovation, BC Assessment. Hart is responsible for driving business innovation at BC Assessment through the implementation of strategic, transformational initiatives and operational excellence programs. He is also responsible for customer and partner strategy, process management, change management, quality assurance, and central assessment and valuation services. He was previously a Partner in KPMG’s Management Consulting practice and Leader of the Strategy & Operations service line in British Columbia. Prior to consulting, he worked at technology giant Siemens in various global marketing, sales and business development roles. Hart attended the Universities of Bayreuth, Nebraska-Lincoln and Colorado; he holds a master’s and doctorate degree in business administration.
Michael Lomax is the Director of Assessment for Esri Canada, which provides enterprise geographic information system (GIS) solutions. He leads the development and implementation of GIS-centric assessment and real estate software solutions. He has over 23 years of experience in property assessment. Previously, he worked as Deputy Assessor for BC Assessment Authority, where he tailored systems for the most complex commercial properties in the Province of British Columbia. Over the last 6 years, he has been a consultant in the areas of assessment systems, data governance, assessment protocols, procedures and technologies to the Government of the People’s Republic of China.
- Category: Interviews
- Written by Jason Grant, Hart Mauritz and Michael Lomax