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Fraser Institute releases report: New Homes and Red Tape
It takes longer to get a new home built and it’s costing more, according to a newly-released report by the Fraser Institute. The land development, home building and renovation industry is one of the most regulated in the province and the report echoes what BILD members have been noticing for years:
- government red tape is leading to increased timelines and costs on new homes;
- we need investment-ready communities that have pipes in the ground, roads built and other services, so the GTA can continue to prosper;
- a public education program is needed to explain how and why public policy is driving the type of development we see in Ontario.
The report, New Homes and Red Tape: Residential Land-Use Regulation in Ontario’s Greater Golden Horseshoe, includes findings based on a survey of Ontario homebuilders.
It compares and ranks jurisdictions across the Greater Golden Horseshoe on several categories including construction approval times, timeline uncertainty, regulatory costs and fees, rezoning prevalence and the effect council and community groups have on development. (Data in corresponding infographic.)
The top three regulated municipalities are: King Township, Town of Oakville and City of Oshawa, with the City of Toronto in 7th place, according to the report.
Project approval timeline can be anywhere from 13-28 months –the more time it takes means more costs added. In the GTA, the average is 18 months not including any mediation or hearings at the Ontario Municipal Board.
In municipalities like the above, rezoning of the land is needed for two out of three projects. Rezoning is needed to get permission to build townhomes on a former school site, for example. The cost to work through the development application and permit process is adding between $35,000 and $55,000 to the cost of a new home.
“A growing body of research indicates that onerous regulation reduces new home construction and contributes to rising home prices,” Kenneth Green, the Institute’s senior director of energy and natural resources and a co-author of the report told the Toronto Star.
“When governments say that they believe there is a shortage of affordable housing, there are things they can do,” Green said.
To read the full report, click here.
