Municipal processes and approval delays add tens of thousand of dollars in costs to new homes in the GTA

September 22, 2020

Added indirect costs because of long approval times can add between $58,000 and $87,000 to a typical 2,000 square foot single-family home in the GTA

 

Toronto, September 22, 2020 — A municipal benchmarking study compiled by Altus Group and released today by the Building Industry and Land Development Association (BILD) examined 18 different towns and cities across the GTA and found tremendous variability in planning features, benchmarked municipal fees and charges, approval times and quantified their indirect costs. The report also identifies municipal best practices. 

 

“There is a tremendous opportunity for municipalities to help with housing affordability by looking at the efficiencies of their processes and approval times,” said Dave Wilkes, President and CEO, BILD. “Added indirect costs because of long approval times can add between $58,000 and $87,000 to a typical 2,000 square foot single-family home in the GTA. For high-rise apartments, the added cost can be between $44,000 and $66,000.”

 

The study found that average municipal approval times for single applications across the GTA stretched well in excess of the maximum allowable times under provincial legislation. In the case of one municipality the approval time for an application stretched 29 months longer than maximum legislated approval timeframe. The study only looked at completed applications and measured the timeframe from once the municipality deemed the application complete to municipal approval (in other words only the time required for the municipality to process the application). In addition, these timeframes were for single applications, whereas a typical home building project will require multiple types of applications, rendering the actual approval timeframe much longer. In fact, only two of the 18 municipalities examined have approval performance approaching the provincial requirements. The analysis of approval timelines only considers projects approved by the municipality and the averages presented therefore do not consider the substantial additional time required to participate in an application appealed to the LPAT.

 

On top of delay costs, the report also examined added municipal costs to new housing and discovered that on average, across the GTA, costs such as development charges and planning fees added $93,700 to a typical low-rise home and $57,800 to a typical high-rise apartment. When combined with taxes from other levels of government, including HST and LTT, the combined burden of government fees, taxes and charges accounts for almost 25 per cent of the cost of a new home in the region.

 

Lastly, the report examined planning features such as guidance and policy documentation, number of planning staff per 1,000 housing starts, and transparency of application status, and then combined all aspects to provide an overall ranking of municipal performance, while also identifying transferable best practices.

 

“The bottom line is that costs due to approval delays and added government fees, taxes and charges add almost one third to the cost of a new home in the region, and slow approvals obviously slow down the pace at which new supply can be added,” said Mr. Wilkes. “With some of the largest cities in the region performing less well than smaller towns and cities, the industry is keen to partner with municipalities to accelerate approvals and implement the best practices identified within the study.”

 

The Altus Group/BILD benchmarking study is being released in concert with a similar national benchmarking study conducted by the Canadian Home Builders’ Association (CHBA) that examines 23 different municipalities across the country (including six GTA municipalities that overlap with the BILD report). Together, these reports represent the most comprehensive and detailed benchmarking report on these topics ever undertaken in Canada.

 

A full copy of the BILD Municipal Benchmarking Study for the GTA is available from

http://bildgta.ca/advocacy/reports and a copy of the CHBA National Municipal Benchmarking Study is available from http://www.chba.ca/CHBA/Housing_in_Canada/The_Government_Role/Municipal_Benchmarking.aspx.

 

 

 

With 1,500 member companies, BILD is the voice of the home building, land development and professional renovation industry in the Greater Toronto Area. The building and renovation industry provides $34 billion in investment value and employs 270,000 people in the region. BILD is proudly affiliated with the Ontario and Canadian Home Builders' Associations.

 

 

-30-

 

For additional information or to schedule an interview on the BILD Study, contact John Provenzano, BILD Media Relations Manager, at jprovenzano@bildgta.ca, (416) 617-7994.

 

For additional information or to schedule an interview on the CHBA Study, contact Nicole Christy, CHBA Manager, Government Relations, at nicole.christy@chba.ca.