Edmonton tops list of favourable municipal environments for home building

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Edmonton tops list of favourable municipal environments for home building
Edmonton boasts the best approval process, has the lowest charges imposed on new developments and has quick approval timelines compared to 21 other municipalities, according to a new report from the Canadian Home Builders' Association. As Sarah Reid reports, they’re all factors that can contribute to lower home prices – Jan 11, 2023

Edmonton, Charlottetown and London, Ont., top the Canadian Home Builders’ Association’s list when it comes to housing and how municipal development processes, approvals and fees impact affordability and supply.

The CHBA’s Municipal Benchmarking Report compared 21 Canadian municipalities’ approaches in three key areas that affect the development of new home construction:

  1. Municipal planning approval processes
  2. Municipal charges imposed on new development
  3. Municipal approval timelines

Edmonton ranked number one in planning features, sixth in approval timelines and sixth in charges and fees to capture a combined first place ranking, the city said in a news release Wednesday.

This represents an improvement from the 2020 study, in which Edmonton ranked second overall in Canada.

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“The City of Edmonton has worked very hard in the past few years to streamline and improve our permit and license processes,” city manager Andre Corbould said.

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“These improvements save applicants $5.3 million and 67,600 days collectively each year.

“We know these improvements have contributed to our ranking and we continue to push for improvements that will help maintain Edmonton’s housing affordability.”

Edmonton, Charlottetown and London ranked highest overall, with strong rankings in at least two of the three categories. All 10 Greater Toronto and Hamilton and Metro Vancouver municipalities are ranked in the bottom 10.

Edmonton had an overall score of 91 per cent based on six overall themes: development guidance, development application tracking, e-submissions/e-payments, availability of planning documents, accountability and provincial direction. Edmonton was best in class in areas such as Electronic Submission and Payment Capabilities and Accountability.

The city said that Edmonton’s typical approval timeline for development applications is less than half of what it is in either Vancouver or Toronto.

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“The growth and future success of Edmonton hinges on the continued successful collaboration and engagement between the real estate development industry and the City of Edmonton,” said Adil Kodian, executive vice-president of Rohit Group of Companies, and member of CHBA-Edmonton Region.

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“It’s critical that we continue to create a business and innovation-friendly environment that provides efficient timelines, focuses on smooth processes and limits additional costs for new homebuyers.”

The report highlights factors that help or hinder the process of approving and constructing new housing, as well as the cost of municipal policies and taxes that impact homebuyers.

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“This report is intended to support the important conversation with all levels of government, but particularly with municipal governments, on the efficient delivery of much needed new housing supply, including the impact that inefficiencies and taxes have on housing affordability, which is already a major challenge across the country,” said CHBA CEO Kevin Lee.

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“We’ve undertaken this work to showcase where municipal governments have the policies and systems in place to support supply and affordability, and to provide a path forward for improvements where things aren’t working as well.”

Corbould said, even with the recent property tax increase, it’s still more affordable to buy and keep a home in Edmonton than many other Canadian cities.

“Even from an operating perspective, with respect to things like taxes, we’re still relatively comparable, lower than a lot of jurisdictions,” he said.

“When you compare the cost of a home here in Edmonton compared to other jurisdictions, it’s more affordable. That cost savings gets passed right on to the homeowner and I would also argue people who are renting are seeing a savings as well.”

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BILD Alberta, a not-for-profit industry organization that represents developers, builders, renovators, trades, consultants, manufacturers, service professionals and suppliers, also responded to the ranking.

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Executive director Scott Fash said while industry and municipalities “should be proud of this shared accomplishment, the (CHBA) report highlighted some concerning trends that are slowly but surely eroding the (affordability) advantage.”

Two key elements that have protected housing affordability in Alberta, Fash said, are:

  • Continued construction of new communities and adequate new housing supply in a variety of forms
  • Historically less red tape and development charges than other jurisdictions.

However, he said both competitive advantages are in jeopardy, particularly in Calgary and Edmonton.

“Broad authorities provided to the two cities through City Charters have created a muddled and unpredictable policy environment, adding new costs to housing and discouraging new investments in housing supply.”

The CHBA report found that between 2020 and 2022, municipal development charges for low-rise housing increased by 34 per cent per unit in Edmonton and 15 per cent per unit in Calgary. For highrise housing, these charges increased by 49 per cent per unit in Edmonton and 65 per cent per unit in Calgary.

“These are new costs, introduced just in the past two years, for each and every new housing unit. The burden of these costs are placed on new home buyers,” Fash said.

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“What is more alarming is that the rates are rising significantly faster than the national average.”

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He said investors are re-evaluating future projects in new communities and housing units, which is reducing new housing inventory in Edmonton and Calgary.

Corbould said the city is communicating with the province and industry stakeholders about the city charter and its impacts.

“We’ve seen a lot of progressive, positive, collaborative steps on that.”

He said officials are keeping a close eye on the rate at which municipal development charges are increasing.

“I think there will be some adjustments as we go along. We’ll continue to collaborate with folks on that to make sure the affordability is what stays, remains and is consistent.”

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The CHBA report found the average cost of government charges levied by municipal governments on low-rise new housing development averages almost $62,000 per unit.

The average cost of government charges levied by municipal governments on high-rise new housing development averages over $41,000 per unit.

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