Toon Dreessen, president of the Ontario Association of Architects, is renewing the OAA’s call for a streamlined site plan approval process, citing its impact on the end product: buildings in which people live and work. The time is right, Dreessen said, because such a move would stimulate the micro-economies of neighbourhoods as well as support government efforts to address climate change and housing affordability with high-quality urban design.
He indicated that there are cases where developers have walked away from desirable projects such as affordable housing due to the amount of red tape — and its associated costs — that they have to cut through to get shovels into the ground.
“We have to go down this road of all this planning approval and that completely destroys their business case,” explained Dreessen. “Instead the land sits there vacant, or underutilized, or is redeveloped for a use that doesn’t require that planning approval, so we end up not developing and designing the cities that we want.”
In the current environment, the site plan approval process is cumbersome, unclear and inconsistent from municipality to municipality, he said. When builders do stay the course, a process that should take a few months can get bogged down in delays that stretch it to a year or more.
Those delays add to the costs of development, which Bousfields and Altus Group Economic Consulting quantified in an independent review commissioned by the OAA in 2013. The resulting report found that each extra month it takes to obtain site plan approval for a 100-unit condominium runs the developer $193,000 in additional carrying costs of financing, inflation on construction costs and taxes on vacant land.
Then those costs ultimately trickle down to consumers, at a rate of $2,375 per month. It’s a figure that not only represents further development charges passed on by builders, but also captures additional rent for first-time buyers and lost equity due to occupancy delays that push back move-in dates, which in turn pushes back when the unit owner starts to pay off their mortgage.
When the price of delays across all stakeholders is tallied up, the independent review commissioned by the OAA pegs the cumulative monthly cost of site plan approval for a 100-unit condominium at between $396,500 and $479,800. That estimate includes delayed tax revenue for the municipality and lost retail spending for local businesses as well as delayed jobs and increased rents in mixed-use developments with office space.
The OAA would like to see the intent of the site plan approval process clarified, which in Dreessen’s view means restricting the evaluation to a technical review, versus overlaying concurrent design reviews. That would involve ticking off a checklist of requirements such as compliance with zoning bylaws for height and setbacks, stormwater management and number of parking spaces.
For its part, the Ontario government carefully considered the OAA’s comments when it reviewed the province’s development charges and land use planning and appeal systems, a ministry of municipal affairs and housing spokesperson said via email. The review produced Bill 73, the Smart Growth for Our Communities Act, which passed in December, 2015.
Its reforms are intended to improve the planning process by, among other things, making the development charges and land use planning systems more accountable, predictable and transparent.
“The changes are designed to ensure that the system is working effectively and is responsive to the changing needs of our communities,” wrote the ministry spokesperson.
He added that the OAA’s report points to problems with the local application of the site plan approval process as opposed to the legislative framework.
Dreessen acknowledged that it would be difficult for the province to directly address issues such as the disparity in the cost of site plan approval from municipality to municipality, but he expressed that the OAA hopes to continue its dialogue with the ministry about why those differences exist, with a view to seeing the Planning Act reformed. He also saw a role for municipalities, some of which hold pre-consultation meetings, which has been one of the association’s recommendations for streamlining the process.
While pre-consultation could be beneficial, the OAA president noted that in his experience, these meetings miss out on resolving the issue of cost, as the developer is typically required to come prepared with design drawings. So the developer has to hire an architect and invest a significant amount of resources before he or she has a sense of whether the project is likely to get off the ground.
One promising approach, Dreessen said, would be for a municipality to test out a development permit system, which essentially takes planning from case-by-case-based to area-based, integrating rezoning, minor variances, site plan and Section 37 into one process. Toronto City Council moved to approve such a system in 2014, but the enabling official plan amendment was appealed to the Ontario Municipal Board, with a hearing now set for August, 2016. However, he said the system could be piloted in a mid-sized city with similar planning issues, such as Guelph, Hamilton, London, Ottawa or Windsor.
Meanwhile, the Building Industry and Land Development Association (BILD) continues to support calls for a streamlined site plan approval process.
“Any improvement to the existing regulatory process can enhance our members’ ability to deliver complete communities in a more efficient manner, resulting in increased affordability and housing choice for new-home purchasers across the region,” said Bryan Tuckey, president and CEO of BILD, via email.
Michelle Ervin is the editor of CondoBusiness.