Long approval times, high municipal fees adding 'unnecessary costs' to new GTA housing: study
CBC
A new study has found that the time it takes to get a housing project approved and the amount of charges levied by municipal governments on developers have both increased in the Greater Toronto Area in the past two years, resulting in "unnecessary costs."
The Municipal Benchmarking Study, 2nd Edition, released on Tuesday, found that the cost of lengthy municipal approval times and additional municipal charges is being passed on to home buyers. The study says the times and charges have both increased since the same study was done in 2020.
Market research firm Altus Group conducted the study for the Building Industry and Land Development Association (BILD), which calls itself the the voice of the GTA home building, land development and renovation industry. The study looked at 16 GTA municipalities.
"These delays in approvals and increasing municipal costs are really adding to the affordability challenges we have in the GTA," Dave Wilkes, president and CEO of BILD, told CBC Toronto. "The bottom line impact is people are leaving the GTA, looking for affordable housing."
The study found that municipal approval timelines range from 10 to 34 months depending on the GTA municipality, with most types of applications taking 20 to 24 months on average.
It also found that municipal fees and charges have increased on average by 30 to 36 per cent since 2020, with charges amounting to $53 per square foot for low-rise housing and to $99 per square foot for high-rise housing. Municipal charges for high density housing, meanwhile, are nearly two-times higher than that for low density housing.
The study estimates that each month of delay costs anywhere from $2.60 to $3.30 per square foot in additional construction costs.
"We need some streamlining. We need a new culture within municipal planning departments to look at how we're addressing approvals because there's one inescapable fact. We need more housing," Wilkes said.
Municipal fees include development charges, parkland dedication requirements, community benefits charges and inclusionary zoning, according to the study.
"Governments at the federal and provincial levels have taken steps to address the factors that affect housing supply and affordability," Wilkes said in a news release. "Municipalities need to do the same."
Housing advocate Mark Richardson, a volunteer for HousingNowTO.com, an advocacy group that tracks affordable housing developments in Toronto, said the problems affecting private developers also affect the public sector.
"Delays are getting longer, costs are increasing on the construction side and on the delivery side, and all of those things put affordable housing projects in jeopardy in the city of Toronto," he said.
In terms of municipal approval timelines, the study found:
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