The District of North Vancouver and the City of Vancouver are the regions most mired in development regulations, and this is contributing to unaffordability, according to a Fraser Institute report released July 16.
New Homes and Red Tape: Residential Land-Use Regulation in BC’s Lower Mainland compared Metro Vancouver and Fraser Valley municipalities in terms of new development bureaucracy and delays (construction approval times, timeline uncertainty, regulatory costs and fees, rezoning prevalence and the effect council and community groups have on development), based on the experiences and opinions of industry professionals.
In an aggregate ranking of the 10 municipalities that had sufficient responses, the District of North Vancouver came out as the most regulated municipality, earning low marks in construction approval times (16.1 months compared with the Lower Mainland average of 11.2) and in the percentage of residential development requiring rezoning (95 per cent versus an average of 68 per cent).
The City of Vancouver scored worse than the Lower Mainland averages on all indicators, except in rezoning requirements, and scored particularly poorly on regulatory costs and fees. To get approval for construction, a typical residential developer in Vancouver spends $38,333 per door (30 per cent more than the regional average) before construction even starts, according to the study.
“A large body of research has shown that onerous regulation stunts the homebuilding process and contributes to rising home prices. With housing affordability being a major issue in Metro Vancouver, the results of this survey indicate that red tape at some Lower Mainland city halls is deterring development and likely contributing to the affordability problem,” said Kenneth Green, Fraser Institute senior director of energy and natural resources. (For the recent opinion piece on this topic from Mike Klassen, click here.)
However, Burnaby homebuilders cited an average of just $17,542 in costs and fees despite the fact that, like Vancouver, the city has no choice but to build to increasing densities.
Green added, “There’s a school of thought out there that higher costs and fees are associated with greenfield development. In other words, municipal governments require more money to service the new areas of development and to build new infrastructure. We found no evidence of that in our survey.”