February 2, 2023

Expediting Approval Process a Key for Meeting Housing Supply Shortage

One of the most common complaints these days in the real estate industry seems to be how long and difficult the approval process is for expediting housing projects in many parts of the country, including Calgary.

And a new study by the Canadian Home Builders’ Association, National Municipal Benchmarking Study, prepared by Altus Group Economic Consulting, had some truly interesting results about the situation.

Altus was retained by the CHBA to undertake a study of several factors that may be contributing to housing affordability issues in major housing markets across Canada, such as municipal approval processes, resulting timelines for approvals, and government charges levied by municipalities.

“The study compares approaches that Canadian municipalities have in place to deal with the approval and ultimate development of new housing and highlights key features (and associated benefits of those features) in bringing new housing to approval and ultimate construction, as well as the cost implications of the municipal processes and policies. The analysis presented in the study was based on research done into 21 Canadian municipalities across the country,” said the report.

The report, which can be found here, said the findings look at the three major elements that feed into housing affordability – getting housing approved, ensuring approvals are done in an expedient manner, and government charges that get borne by buyers/renters.

Edmonton was ranked as the top municipality followed by Charlottetown and Calgary.

The report said every municipality studied recorded an increase in population in each five-year period since 2006, although in most municipalities the rate of population growth is slowing. The average annual population change in these municipalities was 1.55 per cent per year for the 2006-2011 period, 1.46 per cent for the 2011-2016 period and 1.21 per cent for the 2016-2021 period.

“Apartment units have continued to represent a steadily increasing share of total housing construction in most municipalities and across Canada as a whole. In the five-year period from 2002 to 2006, single-detached units comprised 51.4 per cent of all housing starts in Canada, while over the most recent five-year period (2017-2021), single-detached units were just 26.7 per cent of housing starts,” said the report.

“The share of rental housing as a proportion of total housing construction increased in 19 of the 21 municipalities examined between the 2012- 2016 and 2017-2021 periods. However, the share of rental housing overall remains low compared to national peers in all municipalities in Ontario, Alberta and some municipalities in BC.

“The CMHC’s recent analysis on housing supply estimated that 553,000 housing units per year for 10 years would need to be built nationally to restore affordability to levels seen previous in the early 2000s. Assuming housing construction rates based on peak years of construction over the last 20 years, the most optimistic scenarios for potential housing construction only achieve 314,800 per year. The amount of housing supply suggested by the CMHC is likely unachievable (or even approachable) without major changes to how new housing is planned for, permitted, and constructed.”

The report said many municipalities have adopted a high percentage of identified tools and processes that are thought to help make the application process easier and more transparent for applicants, but some municipalities do still not make things such as application requirements, technical study terms of reference, or key planning documents available to applicants, which can hinder the quality of submissions received, and can indirectly impact municipal review timelines.

Features that could assist with streamlining municipal processes and commenting periods, such as online submission portals and specific terms of reference for technical studies, are not commonly used in all municipalities that were examined, it said.

Among the municipalities studied, the places with the greatest number of identified features deemed as beneficial to encouraging and expediting housing supply were Edmonton, Oakville, London, Brampton, Ottawa, and Toronto.

One thing is clear. The population is growing and there is a lack of housing supply in Canada and municipalities need to get onboard to help expedite the process to meet that demand.

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