What do you get when you hold housing development back, add millions of dollars in development charges, and layers of red tape to the development process? A housing shortage.
It isn’t rocket science, and yet city planners and politicians keep blaming “greedy” developers for housing affordability issues rather than evaluate their own flawed systems. The truth is that Toronto’s urban planning department has expanded their power and authority and in doing so they have added so much complexity to the project approval process that instead of taking the regulated nine month timeframe, development projects often don’t even get looked at for at least a year, and the entire approval process from start to finish can take between 4 to 6 years.
Toronto is just seeing the beginning of the housing crisis. With such a bloated approval process and no certainty on the costs associated with development, home builders have become wary of building in Toronto.
The fact that the city has more than doubled development charges over the past few years has added huge costs to the underlying price of housing. Take for example the square foot cost of building a condo. Add the cost of the land, construction, development charges the city imposes as well as the cost to borrow money to pay for construction, and developers could reasonably estimate the square foot cost they needed to charge their customers. However, Toronto refuses to standardize development charges to the point where one building might be required to pay much more than another directly beside it.
In other cities like Ottawa the development charges are posted so that every builder knows what they need to budget for in order to develop a project. In Toronto the development charges are not advertized because the city is constantly adding new ones, with the most recent addition in May of a transit development charge that has yet to be specified. Constantly adding fees every few months to development charges doesn’t allow a developer to know what their costs are going into a project, which in turn significantly increases the risk for investors and for home buyers – with many learning the condo they put money down on a year ago is no longer being built. This uncertainty has a cost and all costs get added to the initial price of a home. Yet the city Toronto refuses to come up with published rates for development charges that developers can rely on when costing their projects.
The fact that Toronto’s development approval process has bloated from nine-months to six years is good news for current homeowners as the shortage of housing will see home values increase significantly, but over the long term property taxes will need to increase dramatically to cover the operating cost of a large city and push middle class families out of the city.
There are a few quick fixes the City of Toronto must make in order to encourage housing affordability.
First reduce the amount of red tape involved in the development approval process.
Next stop city planners from pretending to be architects. They should not be deciding the design of a building (or the colour of a wall!) those aspects of design should be handled by educated designers and architects – they belong in the private sector. The job of Toronto’s city planners must be curtailed to encompass safeguarding that buildings meet the building code and the official plan. It’s time to focus on the fact that glass is falling out of buildings because city staff were sidetracked by more prestigious ambitions and not doing their job of safeguarding the public. The less design work city staff do, the more efficient the planning and building departments will be. As things now stand, city staff have grabbed far too much power and our taxes are paying planners to play at being architects and designers. It’s a waste of time and money that is distracting them from doing their job.
The leadership at Toronto planning over the past five years was a grab for power. Now that former chief planner, Jennifer Keesmaat has set her sites on bigger ambitions it is time for the city to get planning staff back to focusing on their core job of being wardens over the designs brought to them.