Red tape slowing new home construction, report says
Upscale communities using planning regulations as new form of NIMBYism, Fraser Institute says

thestar.com
Oct. 14, 2015
By Susan Pigg

Red tape and development charges vary wildly across the Greater Golden Horseshoe area and have become a tool in some higher-end communities to keep out new, more affordable housing, says a report being released Wednesday by the Fraser Institute.

In upscale Oakville, for instance, development, permit and other fees required to build new housing can average $56,667, pushing up house prices and making it among the top three most expensive places in the region to build a new home, says the Vancouver-based public policy think tank.

Its next-door-neighbour Burlington, however, charges an average of just $35,500 and new construction approvals generally take about 13.8 months, making it top among 23 communities in the Greater Golden Horseshoe in terms of its speed approving applications.

That compares to 17.5 months in Oakville and 20.2 months in King Township, which the report calls “the most regulated municipality” in the GGH.

Burlington ranks third for the costs of approvals and development charges, behind Hamilton (at an average of $17,500) and Pickering ($33,000) says the report based on interviews with builders and developers of single-family homes and multi-residential condos from Clarington in the east to Hamilton in the west and Bradford West Gwillimbury in the north.

Oakville takes an average of 17.5 months to grant new home construction approvals, says the reported which echoes findings of similar reports done by the institute in Vancouver and Calgary/Edmonton that show wildly differing rules and costs for homebuilders.

“A growing body of research indicates that onerous regulation reduces new home construction and contributes to rising home prices,” says Kenneth Green, the institute’s senior director of energy and natural resources and a co-author of the GGH report.

Some homeowners simply fear change, others fear that adding supply will drive down their own home values, said Green.

“When governments say that they believe there is a shortage of affordable housing, there are things they can do,” he added in a telephone interview.

The report singles out Toronto - the condo-boom capital of North America - for “an excess of regulations” that, it says, leaves the city seventh out of the 23 communities in terms of ease of getting new homes built.

“Of note, homebuilders perceive Toronto’s council and community to be resistant to new development,” says the institute. “Specifically, when asked how local council and community groups affect single-family and multiple-dwelling development, respondents ranked Toronto as the fourth worst in the Greater Golden Horseshoe.”

The need for lengthy rezonings and opposition to higher-density housing are also major issues.

“Indeed, it appears that we’re seeing a form of NIMBYism (that term stands for Not In My Backyard) where council and community opposition to residential development is strongest in municipalities with higher dwelling values,” said Green. “That doesn’t bode well for housing affordability in the region.”

The report also raises the much-debated bogeyman of the province’s decade-old Greenbelt legislation, saying “housing affordability may be adversely affected” by the fact development is no longer allowed on those large tracts of GGH lands, an argument long disputed by supporters who say there is still lots of land left in the region.

Municipal planning officials declined to comment on the report, saying they have yet to see its findings.

An Oakville official noted that the city’s development charges “are subject to rigorous public consultation” and that all building permit and development application fees are based on a policy of “full cost recovery.”