July 16, 2015 7:28 pm
Updated: July 16, 2015 11:47 pm

‘Red tape’ stunts building development in Vancouver and North Vancouver: Fraser Institute

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WATCH:  A report from the Fraser Institute says Vancouver is one of the most expensive cities to build. John Hua explains why this could be contributing to the affordability crisis.

Housing affordability in Metro Vancouver is a hot topic with conditions for homebuyers on the decline.

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A new report by the Fraser Institute may shine a light on one of the possible contributing factors to the affordability problem in the cities of North Vancouver and Vancouver — red tape in some city halls is deterring development.

“A large body of research has shown that onerous regulation stunts the homebuilding process and contributes to rising home prices,” said Fraser Institute senior director Kenneth Green in a statement.

“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.”

READ MORE: Vancouver residents rally for affordable housing

The report, New Homes and Red Tape: Residential Land-use Regulation in B.C.’s Lower Mainland, compares jurisdictions across Metro Vancouver and the Fraser Valley in a number of areas. The categories include red tape issues like: construction approval times, timeline uncertainty, regulatory costs and fees, rezoning prevalence and the impact city council and community groups have on development. The feedback is based on the experiences and opinions of industry professionals.

Looking at 10 municipalities, the City of North Vancouver comes out as the most regulated municipality. The North Shore city earned low marks in construction approval times — 16.1 months compared to the Lower Mainland average of 11.2 months. And when it comes to the amount of residential development needing rezoning, the City of North Vancouver requires 95 per cent versus an average of 68.

WATCH: Dr. Kenneth Green with the Fraser Institute discusses the results of a new survey of homebuilders

According to the study, the City of Vancouver ranks worse than the Lower Mainland in all categories with the exception of rezoning requirements, and scores “poorly” on regulatory costs and fees.

A typical residential developer in Vancouver will spend $38,333, which is 30 per cent more than the region-wide average, before a shovel breaks ground.

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But conversely in Burnaby, which shares a border with Vancouver, homebuilders reported to the Fraser Institute their costs and fees average $17,542 even though both cities state they have no option but to build up to grow.

The overall Lower Mainland Regulation Rankings:

  1. Abbotsford
  2. Burnaby
  3. Coquitlam
  4. Surrey
  5. Richmond
  6. Maple Ridge
  7. Langley Township
  8. City of North Vancouver
  9. Vancouver
  10. District of North Vancouver

“There’s a school of thought out there that higher costs and fees are associated with greenfield development,” Green said.

“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. Instead, it appears that we’re seeing a form of NIMBYism where council and community opposition to residential development is strongest in municipalities with higher dwelling values — like on the North Shore and in Vancouver. That doesn’t bode well for housing affordability in the region.”

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