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 21 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.

CHBA's Municipal Benchmarking Study
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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.

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 whichmunicipal 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, Toronto, London, Oakville, Halifax, Calgary, and Hamilton.

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.

Depending on the jurisdiction, development approvals are taking between 3 months (Charlottetown) to 32 months (Toronto) Compared to the findings contained in the 2020 study, there are some notable shifts in average approval timelines

Municipalities studied in Ontario saw the average timelines worsen by 3% (from 18.1 to 18.6 months).
Non-Ontario municipalities saw average timelines improve by 10% (from 11.2 months to 10.0 months).
Within Ontario, the municipalities of the Greater Toronto Area and Hamilton (GTHA) saw approval timelines worsen by 18%.

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 hypothetical scenarios were studied, looking at a typical low-rise development and at a typical high-rise development.

Municipal Charges Disproportionately Imposed on High-Density Developments, Putting Objectives for Increased Infill and Intensification At Risk

The government charges modelling for two hypothetical developments (low-rise and high-rise) found that the charges imposed by municipalities on new housing development are generally the highest in the Greater Toronto Area and Greater Vancouver.
Since the 2020 Study, the low-rise scenario has seen the average municipal charge increase by 20% from $49,400 per unit to $61,600 per unit. The average municipal charge on high-rise development has increased by 34%, increasing from $31,900 per unit to $41,400 per unit.
In many municipalities, but in all Ontario and BC municipalities studied, municipal charges imposed, when expressed on a per square foot basis, are significantly higher for high-rise development than low-rise development. Only in Edmonton, Saskatoon, Regina, Winnipeg and St. John’s are per square foot charges on high-rise equal to or less than the charges imposed on low-rise. On average, charges for high-rise were $52 per square foot, compared to $29 for low-rise.
The disproportionate costs per square foot in municipal charges towards high-rise puts at risk municipal objectives for increased infill and intensification. This could hinder utilization of public infrastructure investments in urbanized areas, such as major transit station areas, or transit corridors.

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 Edmonton Halifax Hamilton London Markham Moncton Oakville Ottawa Pickering Regina Saskatoon St. John's Surrey Toronto Vancouver Winnipeg

Best practice examples

Based on a scan of programs initiated by municipalities, provinces, and locations outside of Canada to improve the development review processes, there are several key themes involved in the process reviews underway, or recently completed:

Forced technological changes from COVID;
Pairing zoning reforms with ‘off-the-shelf’ pre-approved designs;
Enhancing transparency to the public on municipal decision making;
Reforming provincial planning policies;
Making municipal decision making more accountable by creating service standards and enhancing appeal rights to ensure conformity and consistency with provincial policy;
Employing service standards for application review but paired with a flexible system to enable context-specific considerations that may merit longer timelines; • Vastly enhancing the availability of data, and requiring standardized annual reports on significant planning matters such as housing approvals and approval timelines.
Providing regulatory and financial relief for affordable housing projects.

View 2023 Media Release