New report offers insights on how to improve municipal processes, fees and charges that are affecting housing affordability and supply in Canada
OTTAWA – September 22, 2020 – Today the Canadian Home Builders’ Association (CHBA) released its first Municipal Benchmarking Study that examines how local development processes, approvals, and charges contribute to housing affordability and supply issues in major housing markets across Canada.
The study reviews and compares the approaches of 23 Canadian municipalities as they relate to approvals and development of new housing. The study also looks at the direct costs on new housing developments, as well as the potential implications of approval processes and the typical approval timelines by estimating the indirect costs on residential construction.
“This report is intended to support the important conversation with all orders of government on a major challenge to housing affordability and the efficient delivery of much needed new housing supply. We’ve undertaken this work to showcase where municipal governments have the policies and systems in place to support supply and affordability, and to provide a path forward for improvements where things aren’t working as well.” – Kevin Lee, CEO, CHBA
Rankings for each studied municipality are available in the full report. The rankings show at a glance which municipal governments are leading in each of the three areas as well as an overall ranking. A municipality’s ranking does not assess anything beyond what was analyzed and may not reflect the quality of the relationship between industry and local governments.
This research was completed prior to the first wave of COVID-19, and is even more important as a result of the challenges that municipalities, industry and consumers have faced in the wake of the pandemic.
Key findings include:
- The cities of Regina, Edmonton, Calgary and London rank high overall on the list, each with strong rankings in at least two of the three categories studied. The municipalities in the Greater Toronto Area and Vancouver Area rank towards the lower end, generally as a result of high government charges and slower approval timelines.
- Of the municipalities studied, the report shows that Edmonton, Oakville, London, Brampton, Ottawa, and Toronto offer the greatest number of planning features that can encourage and expedite needed housing supply. Local governments should work with their local home builders’ association to optimize these features.
- Development approvals are taking an average of 1.5 to 2 years to obtain (and more in some cases) – an average of 20.3 months for multiple applications, and an average of 11.7 months for single applications. Each additional month a project is in the approvals process adds an average of $351,500 in costs per month for a low-rise project (equivalent to $2,812 per month per unit), and $216,300 in costs per month for a high-rise project (equivalent to $1,730 per month per unit).
- In some areas studied, government charges make up 12 per cent of the price of a home for typical low-rise and high-rise developments.
- Government fees and charges average $48,200 per low-rise unit in Canada, with the highest charges in Markham, Ontario ($138,154 per unit) and the lowest in Charlottetown, Prince Edward Island ($2,181 per unit).
- 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.
- Some of the best practices that have emerged from the study include pre-zoning systems, delegated approval authorities, simplifying certain planning amendments, increasing the transparency and predictability of the application process, improving communication on application requirements, and overall, elevating customer service in terms of engagement with builders and developers.
This study is being released in concert with a similar study undertaken by BILD GTA and The Altus Group, examining 12 municipalities in the Greater Toronto Area. A copy of the GTA study is available here: https://bildgta.ca/advocacy/reports.
For questions or interviews on the CHBA Municipal Benchmarking Study, please contact Nicole Christy, Manager, Government Relations, at [email protected].
About the Canadian Home Builders’ Association
Since 1943, the Canadian Home Builders’ Association (CHBA) has been “the voice of Canada’s residential construction industry.” Representing one of the largest industry sectors in Canada, our membership is made up of some 9,000 companies – including home builders, renovators, land developers, trade contractors, product and material manufacturers, building product suppliers, lending institutions, insurance providers, and service professionals.
CHBA seeks a strong and positive role for the housing industry in Canada’s economy and in the life and development of our communities. In addressing this goal, we support the business success of our members. We work to ensure Canadians have access to homes that meet their needs at a price they can afford to pay, and that the interests of home buyers and homeowners are understood by governments.
CHBA is a federal not-for-profit organization governed by an elected Board of Directors and a volunteer executive, supported by our professional staff. At the national level, our system of Committees and Councils brings together builders and industry experts from across the country to share information and ideas, and to formulate recommendations to governments to improve the quality and affordability of homes for Canadians.