Excessive red tape, high costs in Vancouver stifling new homebuilding

As an increasing number of people move to Canada’s major cities, high housing prices persist in its most desirable markets. With growing concerns about housing affordability and prices, understanding how public policy affects the supply of new homes is critical. Following several major studies in the United States on this topic, the Fraser Institute’s survey of housing developers and homebuilders collects data about how residential land-use regulation affects the supply of new housing. The data collected reflect the experiences and opinions of industry professionals across Canada. New Homes and Red Tape in British Columbia: Residential Land-Use Regulation in the Lower Mainland belongs to a series tallying the data to represent industry professionals’ experiences and opinions of how residential development is regulated in cities across Canada. This report presents survey results for cities in British Columbia’s Lower Mainland.

Unlike previous editions, this report accounts for the relative scale of survey respondents’ home-building operations. Some have fewer than 20 units under development, while others have thousands, making it important to assign appropriate weight to their responses. In doing so, the averages presented in this edition of the New Homes and Red Tape series more closely reflect typical experiences across units, rather than across respondents.

Estimates of typical project-approval timelines in Lower Mainland cities range from approximately five months or less in the City of Langley and Pitt Meadows to over 18 months in the City of Vancouver and West Vancouver, where timelines are also rated the most uncertain. Reported compliance costs and fees add up to a low of $4,300 per home built in Pitt Meadows and a high of almost $78,000 per home in the City of Vancouver. The survey reports that zoning bylaws need to be changed to accommodate more than 60% of new residential development in 12 of 20 cities. Estimates of rezoning’s effect on approval timelines range from having no substantial effect in Richmond and Port Coquitlam to adding ten months in Surrey.

Council and community opposition to residential development is perceived as strongest in cities where the value of dwellings is highest, raising questions about the causes and consequences of local resistance to new housing. The strongest opposition is reported in Vancouver, with West Vancouver close behind. This opposition is typically not perceived as a significant deterrent to building in the City of Langley and Port Coquitlam.

The index of residential land-use regulation tallies the results of five key components of regulation’s impact—approval timelines, timeline uncertainty, regulatory costs and fees, rezoning prevalence, and impact from local council and community groups—in 19 cities that generated a sufficient number of responses to the survey. This index ranks the City of Langley as the least regulated in British Columbia’s Lower Mainland and the City of Vancouver as the most.