Municipal Benchmarking

How do municipal processes, approvals, and government fees and charges affect housing affordability in Canada?

This study is intended to help establish standards that municipalities can and should aim to meet, and that industry and the public can and should call for, with supporting data and best practices to show the way. It is an opportunity to start a productive conversation for all, identifying best practices, ways to improve processes, and opportunities for governments and industry to work together to tackle affordability and other housing challenges.

Housing affordability continues to be a challenge in all parts of the country. A key component of affordability is the price of a home, and a major part of the price is the cost to develop and build. In Canada, municipal processes, approvals, and charges have been steadily increasing. This adds cost to building both low-rise and high-rise housing, contributes to higher prices, and ultimately erodes affordability.

The Municipal Benchmarking Study was commissioned by CHBA and delivered by Altus Group. The study compares 23 Canadian municipalities, examining how their processes, approvals timelines, and charges and fees contribute to housing affordability and supply issues in major housing markets across Canada. The report reads as a report card to show which municipal governments are leading in which of the three pillars of the study—planning system features, approval timelines and government charges. The research was undertaken in late 2019 and early 2020, and conclude prior to the pandemic.

Municipal Benchmarking Study Report Cover

CHBA's Municipal Benchmarking Study [Click for PDF]

This study was undertaken before the COVID-19 health crisis in Canada. Throughout the pandemic, many municipalities have worked with the building industry to innovate in order to keep housing moving – this has included more online applications, virtual inspections and several other new ways of doing things.

Map of Studied Municipalities in CHBA Municipal Benchmarking Report

Summary of Findings

Each participating municipality has been assigned a score that combines their performance on planning features, approvals timelines and government charges. This ranking provides a short-hand to show which municipal governments are leading in which of the three areas at the moment, as well as an overall ranking. Subsequent studies will help to show changes in the approach taken by local governments to improve housing affordability through their use of the planning system, approvals, and charges.

1. PLANNING PROCESS

1. Planning Process

Every province has in place legislated processes that govern development applications, and often have mandated timelines associated with those processes. This study examines some of the processes common across provinces and assesses their effectiveness at improving how affordability and efficiently housing can be brought online.

The review of planning approval processes has found that while most provinces generally apply the same broad planning instruments, the method of implementation, level of transparency, and processes regarding decision-making can differ significantly from one province or municipality to the next.

Among the municipalities studied, the municipalities with the greatest number of identified features deemed as beneficial to encouraging and expediting housing supply were Edmonton, Oakville, London, Brampton, Ottawa, and Toronto.

Features List:

Ability to appeal land use decisions
Mandated timelines for appeal decisions
Triggering of appeal rights after certain number of days
Timed review of preliminary submissions / declaration of complete submission
Online application portal
Development guide showing required studies for various types of applications
Clear terms of reference for required studies
Requirement to review Municipal Plans on regular basis
Requirement for a minimum supply of designated and/or serviced lands
Have development application status tracker
Online zoning information portal

2. APPROVALS

2. Approvals

This aspect of the study endeavoured to estimate typical approval timelines for development applications – from complete application to planning approval. The nature of the ‘planning approval’ can take many forms – and may include some combination of a municipal plan amendment, zoning by-law amendment, site plan approval, plan of subdivision and/or development permit.

In short, development approvals are taking an average of 1.5 to 2-years to obtain, and more in some cases. Applications requiring multiple application types were in some cases taking much longer than applications that required one application taking an average of 20.3 months, compared to 11.7 months for developments requiring only a single application. This increased amount of time is evident in almost all municipalities reviewed.

In Western Canada – the average timelines for municipalities in Western Canada are typically in the 9-to-15-month range, depending on the type of approval required. Approval periods are generally lower in Winnipeg, Regina, Calgary and Edmonton, and higher in the municipalities studied within the Metro Vancouver area.
In Ontario, none of the averages in any municipality, for any type of planning application, was less than 7 months. In some cases, the average approval timelines exceeded 30 months (OPAs in Toronto, plans of subdivision in Ottawa);
In Atlantic Canada, the average timelines were relatively low in Charlottetown and St. John’s, with Halifax having the longest average approval timelines, ranging from 18 to 26 months, depending on the application type.

3. GOVERNMENT CHARGES

3. Government Charges

This section provides a high-level overview of government charges levied by municipal governments and attempts to quantify the costs these charges and fees generate for developers, home builders, and ultimately, home buyers. Although growth must pay for growth, ever increasing charges are adding to the price of the house for homebuyers and is often supporting investments beyond what would be needed to address the impact of any new development. Two scenarios were studied, looking at a typical low-rise development and at a typical high-rise development. In some areas studied, government charges make up 12 per cent of the price of a home.

Low-Rise Scenario

The modelling of charges imposed on low-rise development was done on 21 of the 23 municipalities – neither the City of Toronto or the City of Vancouver was included in the modelling, as large-scale low-rise development is not a significant part of the development environment in those municipalities any longer.

Government fees and charges average $48,200 per low rise unit in Canada, with the highest charges in Markham ($138,154 per unit, 12% of the price of a home), Ontario and the lowest in Charlottetown, PEI ($2181, per unit).

Municipal Charges Per Unit - Table Municipal Charges as Percentage of Housing Price - Table

Both tables: Altus Group Economic Consulting

High-rise scenario

The charges for a high-rise development are highest in the City of Vancouver at $100,700 per unit, followed by the four high rise markets studied within the GTA (Markham, Brampton, Toronto, and Oakville).

On average, the high-rise charges imposed by municipalities are $32,800 per unit, or 6.2% of the price of the residential units.

Munical Chargers Per Unit - Table Municipal Charges as Percentage of House Price - Table

Both tables: Altus Group Economic Consulting

Municipal Factsheets

In addition to the report published last year, CHBA has assembled local Municipal Benchmarking Project (MBP) Factsheets that are available below. These local factsheets summarize the key findings from the Municipal Benchmarking Study for each participating jurisdiction. This study, along with the accompanying factsheets, is meant to help participating local HBAs communicate and collaborate with their municipalities on development processes, approvals and charges.

Brampton Burnaby BWG Calgary Charlottetown Coquitlam Delta Edmonton Halifax Hamilton London Markham Moncton Oakville Ottawa Pickering Regina Saskatoon St. John's Surrey Toronto Vancouver Winnipeg

Best practice examples

Some municipalities are undertaking reviews of their development application and related processes.

Key themes/directions emerging from reviews:

Pre-zoning systems (community planning permits) to help reduce required processes;
Delegated approval authority for certain applications;
Simplifying certain planning amendments;
Increasing transparent and predictability of application process;
Improved customer service
Improved communication regarding application requirements
Since COVID-19, have seen numerous municipalities move to online application submission

View 2020-09-22 Media Release

Contact

Viktoria Halim
Economist, CHBA
[email protected]