GTA Construction Report staff writer
The Ontario Association of Architects (OAA) has released what it says is the first report to quantify the cost of delays in the site plan approval process in Ontario.
The OAA commissioned Bousfields Inc. and Altus Group to create the report, titled “A Review of the Site Plan Approval Process in Ontario”. The report, released in October at the Design Exchange in Toronto to an audience of industry and government leaders, clearly outlines the financial impact of the delays in site plan review on new homebuyers, commercial tenants, developers, municipalities, the local economy and jobs.
In a review of almost 500 site plan applications across the province, the report points to a process that is often delayed six to 12 months with over 35 per cent of applications taking longer than nine months.
“Unnecessary delays, inefficiencies and lack of a coordinated process are creating additional costs that are inconsistent with the value of the site plan review,” says OAA president Bill Birdsell.
Each additional month in site plan review costs:
- Residential developers $193,000 including additional taxes, financing, inflation on construction costs and materials for a 100 unit building. Over a 6-12 month period the additional cost of the delay can be $1.16 million – $2.3 million. These costs can be passed on to new homebuyers through higher prices.
- Individual new homebuyers roughly $2,375 including costs passed on through higher prices, lost equity by not beginning a mortgage sooner and additional rent costs.
- Commercial developers $113,000 including additional taxes, financing, inflation on construction costs and materials for a 50,000 sf building. Over a six to 12 month period the additional cost of the delay can be $680,000 – $1.36 million.
Commercial tenants $2.50 to $2.70 sf including costs passed on by applicants through higher rents.
- Local municipalities $159,900 to $241,600 in lost tax revenues and spending for a 100-unit residential building. Over a six to 12 month period the additional cost of the delay can be $959,000 – $2.9 million.
- Local municipalities $4,100 to $16,000 in lost tax revenues and spending for a 50,000 sf commercial building and delays arrival of 250 new jobs and associated economic spinoffs.
Top areas of concern outlined in the report include lack of: municipal expertise, objectivity and
co-ordination between departments and unnecessary submission requirements.
The OAA is calling on the Province of Ontario to step in and provide clear direction and guidelines in conjunction with the Ontario Planning and Development Act to allow for consistency of application across municipalities and to eliminate redundancies that have been identified in the report.