Long Approval Times, High Municipal Fees Adding ‘Unnecessary Costs’ to New GTA Housing: Study
A new study has found that the time it takes to get a housing project approved and the amount of fees municipal governments charge developers have both increased in the Greater Toronto Area over the past two years, leading to “unnecessary costs”.
The Municipal Benchmarking Study, 2nd Edition, released Tuesday, found that the cost of long municipal approval times and additional municipal charges is passed on to homebuyers. The study indicates that time and fees have both increased since the same study was conducted in 2020.
Market research firm Altus Group conducted the study for the Building Industry and Land Development Association (BILD), which calls itself the voice of the housing construction, development and renovation industry in the Greater Toronto Area. The study focused on 16 municipalities in the Greater Toronto Area.
« These delays in approvals and increasing municipal costs are really adding to the affordability challenges we have in the GTA, » Dave Wilkes, BILD president and CEO, told CBC Toronto. « The end impact is people leaving the GTA, looking for affordable housing. »
The study found that municipal approval times vary from 10 to 34 months depending on the GTA municipality, with most types of applications taking an average of 20 to 24 months.
It also found that municipal fees and charges have increased by an average of 30-36% since 2020, with fees rising to $53 per square foot for low-rise homes and $99 per square foot for homes. of great height. Municipal charges for high-density housing, meanwhile, are almost twice as high as those for low-density housing.
The study estimates that each month of delay costs between $2.60 and $3.30 per square foot in additional construction costs.
« We need streamlining. We need a new culture within the municipal planning departments to look at how we deal with approvals because there is one inescapable fact. We need more housing » , said Wilkes.
According to the study, municipal fees include development fees, park designation requirements, community benefits fees and inclusive zoning.
« Governments at the federal and provincial levels have taken action to address factors that affect housing supply and affordability, » Wilkes said in a news release. « Municipalities must do the same. »
Affordable Housing Facing the Same Issues: Advocate
Housing advocate Mark Richardson, a volunteer with HousingNowTO.com, an advocacy group that tracks affordable housing developments in Toronto, said issues affecting private developers also affect the public sector.
« Delays are getting longer, costs are rising on the construction side and on the delivery side, and all of these things put affordable housing projects in the City of Toronto at risk, » he said.
With respect to municipal approval timelines, the study found:
- Average approval times have increased by 41% since the 2020 study, and by 27-53% depending on the type of request.
- The best average approval times were found in Milton, Whitby, Barrie, Oakville and Brampton, with each municipality averaging less than 16 months.
- The worst average approval times were observed in Caledon, Toronto, Richmond Hill and Vaughan, at 27 months or more.
- Approval times are just as long for smaller requests as for larger requests.
- Each month of delay is estimated to cost $2.60 to $3.30 per square foot in additional construction costs.
- Feedback from municipalities suggests barriers to improving approval times include staffing, turnaround times when applications are resubmitted, and the need to comply with provincial requirements.
In terms of municipal fees and charges, the study revealed:
- Compared to the 2020 study, the average municipal charge on low-rise development has increased by 30%, while charges on high-rise buildings have increased by 34%. The 34% increase for high-rise buildings does not include the cost implications of inclusive zoning policies that have been adopted in some municipalities.
- In the 2020 study, six of the 16 municipalities had low-rise fees that exceeded $100,000, and two had fees that exceeded $125,000 per unit. In the current study, nine of the 16 municipalities now have charges that exceed $100,000 per unit, and seven exceed $125,000.
- In the 2020 study, no municipality exceeded $100,000 per unit for high-rise units, but in the current study, four municipalities have charges above $100,000.
- Loads for high-rise development, per square foot, are 90% higher than for low-rise development.