Back in 2022, Altus Group did a municipal benchmarking study where they looked at approval timelines, development charges, and a host of other factors that could be impacting housing affordability in Canadian cities. I blogged about it then and spoke specifically about its benchmarking of approval timelines. But I revisited it this morning after seeing Mike Moffatt tweet about it and I came across the below chart.
Also, approval timelines are less of a concern today. There are lots of zoned sites that are ready to go, but can't because of the market. Instead, what the below charge does is compare municipal charges on a per square foot basis for low-rise and high-rise housing. What's interesting is that in most cases, but in all cases in Ontario and BC, the charges are higher for high-rise housing.
Example: If you bought an 800 sf condominium in Toronto and the fees were based on the numbers in this report, you'd be paying $125 psf x 800 sf = $100,000 in municipal charges alone. Once again, I am of the opinion that our industry should find a way to transparently itemize these charges so that people/purchasers can see where their money is going.
Now, part of this has to do with higher land values for higher-density housing and municipal fees that are calculated based on appraised land value. But it's also driven by suite sizes becoming smaller (to make the end price more affordable for buyers and renters).
Here in Toronto, it doesn't matter if you're building an 800 sf two-bedroom or an 8,000 sf two-bedroom apartment, the development charge fee would be the same. And so it is perhaps not surprising that as suite sizes have come down and charges have gone up, so too did the costs on a per square foot basis.
But it raises an important and obvious question: Is this what we want? I mean, aren't we trying to encourage more infill housing in places where people don't need to drive and we can leverage existing services? Yes, that's what we are saying. Unfortunately, our charges suggest the opposite.
If you'd like to download a copy of the report, you can do that over here. Please keep in mind that this is data from 2022 and there have been changes since then. In many cases the fees are now higher, but in some cases, like in the City of Vaughan, the fees are now lower.
Cover photo by Scott Webb on Unsplash
