OPINION: Municipal predictability in policy critical for positive housing outcomes 

The reality is that there is a substantive difference between what gets approved and what actually gets completed. Photo by Shutterstock

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Every election season, I use this space to provide voters with insights, perspectives and outlooks into important housing issues impacting residents of the Greater Toronto Area (GTA).  

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Since we are less than a month away from voting day, I’d like to use this edition to discuss how predictability and certainty in municipal housing policy is key to ensuring positive outcomes in terms of supply and affordability.  

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For voters, it is very common to hear municipal politicians and mayors refer to the thousands, tens of thousands, or even in some cases, the hundreds of thousands, of new units that have received planning approval and are awaiting construction to become new homes ready to be lived in.  

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These figures are often touted as markers of success and that residents should take comfort that these potentially hundreds of thousands of new units – or whatever number being quoted that day – are on the way and just around the corner.  

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However, history has demonstrated that these numbers cannot be relied upon as an accurate predictor of what actually might be built.  

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Why is that so? 

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It comes down to a few key factors including the length of time it takes to develop and build a new home, changing rules around construction and shifting market conditions.  

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The reality is that there is a substantive difference between what gets approved and what actually gets completed. 

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In some jurisdictions, often larger and more complex regions, the approval to completed ratio can be substantially lower – 70 per cent, 60 per cent, or even lower.  

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There are two interconnected and key variables that influence this ratio.  

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The first being the length of time it takes to develop and build a residential project.  

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In many of my previous columns, I have outlined that in the GTA it takes on average 11 years to complete a high-rise project, and 10 years to complete a low-rise project.  

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The longer this takes, the more opportunity there is for legal, policy, economic or market conditions to impact the viability of the project and therefore, a reduced likelihood of turning an approved project into actual homes citizens can live in.  

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The second variable impacting the approval-to-built-housing ratio are those very legal, policy, economic and market conditions themselves. Simply put, when a development application is submitted, it is a proposal to build housing under certain assumptions. 

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However, when the realities of those assumptions change – for instance, municipalities introduce new rules or requirements, macroeconomic and trade conditions change, input or labour costs increase – the viability of the entire development can be put at risk and the likelihood of new housing getting built can be materially altered.