hanging the game plan: Lyall.
September 24, 2024
Famed theoretical physicist and scientist Albert Einstein once said, “Bureaucracy is the death of all sound work.”
I doubt he was specifically referring to the myriad rules, regulations and red tape that residential construction industry builders and contractors must overcome before they can put shovels in the ground for a project – but it certainly seems an appropriate adage in this day and age.
Nothing is more frustrating for a builder or renovation contractor than having to deal with red tape. In the construction world, time is money and any project delay can make a big difference. Our residential construction market, in particular, is suffering from runaway bureaucracy and endless red tape which hampers the ability of the industry to build homes that people can afford. In many ways, we’re still in the dark ages when it comes to dealing with new housing proposals. Developers and builders often must navigate their way through extensive approvals processes which are too slow, antiquated and cumbersome and a drain on resources.
It will take a serious epiphany to turn the situation around.
Presently, we are not building nearly enough new homes. Yet, proposals still get bogged down in bureaucracy. The City of Toronto has become the poster child for lengthy delays. At last check, the timeline for approvals in Toronto was the worst of 20 cities in Canada, with an average approval time of 32 months. The city also has intolerably long timelines for zoning amendments and site plan approvals.
The six-month average timeline to complete the pre-application consultation process is 44 days while the average for combined Official Plan Amendment/Zoning Bylaw applications is 115 days. Incredibly, a recent progress report on 18 affordable housing projects identified for construction in Toronto showed that none have begun. That’s the scenario in spite of the fact that more planning staff have been hired and there are fewer applications due to current market realities.
Residential construction projects are caught up in the snare of endless bureaucracy. Interestingly, The Toronto Star reported recently that the city ran more than 650 public consultation processes last year and, of those, 325 were related to individual development applications. A staggering figure of 61,750 hours were spent delivering development-related consultations.
Instead of weeks or months, obtaining approvals and permits in major cities like Toronto and Vancouver can take years. Delays cost developers time and money, and the costs are passed on to the buyer. Nationwide, we rank second last among 34 Organisation for Economic Cooperation and Development countries in the time it takes to get permits approved. Only the Slovak Republic is worse. It is critically important to right this wrong, as it is simply too costly for developers and builders to construct homes that people can afford. Time spent in the approvals process is an impediment.
Latest CMHC data reveals that the City of Toronto saw 9.5 per cent fewer housing starts in the first half of this year compared to 2023. Sadly, stats in Ontario were down 10 per cent in the same period. RateHub.ca recently reported the minimum annual income required to buy an average home in Toronto was $208,950. To fix the situation, governments must immediately implement major changes in municipal planning and development divisions across Ontario that will specifically expedite residential housing applications and streamline approvals. Specific timelines must be mandated, and governments must ensure the full use of strong mayor powers to expedite applications. Technical panels and agencies must also do their part and make decisions in a timely manner.
The Ontario government recently unveiled its latest Provincial Planning Statement (PPS), a series of requirements and recommendations that go into effect in October and are geared to getting more housing built across the province. One directive is for municipal planning authorities to establish and implement their own targets for affordable housing, emphasize building more density around major transit and building up shopping mall and retail plaza sites.
The idea is to give municipalities more tools and flexibility to plan for new housing supply as they see fit.
While the PPS is moving in the right direction, it doesn’t specifically address the systemic issues that are preventing housing from being built in an efficient manner – namely the chronic inefficiencies in our approvals process – and pose a solution for getting housing off the ground quicker. It also doesn’t touch on the excessive costs imposed on new homebuyers and renters, such as exorbitant taxes, fees and levies.
In Ontario, the government has expressed optimism that the target of building 1.5 million homes by 2031 is still feasible. However, most major municipalities are nowhere near their targets.
We need to change the game plan. Cutting red tape and bureaucracy would be a good start.
