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Housing Affordability Choked by Regulations

A new report says rising prices in Canada’s housing markets are exacerbated by municipal regulations that restrict housing supply.

 The Impact of Land-Use Regulation on Housing Supply in Canada by the Fraser Institute studied 68 municipalities and analyzed:

  • construction approval times
  • timeline uncertainty
  • regulatory costs and fees
  • rezoning
  • the effect council and community groups have on development

They discovered housing supply tends to grow less in more regulated communities.

They also surveyed developers for the impact of timeline uncertainty. The responses were on a scale from 1 (development encouraged) to 5 (won’t develop due to uncertain approval timelines).

When developers’ perceptions moved beyond 2.8 out of 5, new housing growth dropped by 51%.

The report concludes regulatory reform, especially simplified permit processes, could reduce building costs, increase housing and improve affordability.

The study’s findings are supported in our region. Building permit timelines range from  3 days to 6 weeks or more.

Municipalities with restrictive zoning and permit approvals tend to have the highest home prices accompanied by declining populations and tax base.

Solutions include rezoning for more density and faster permit approvals for professional builders with strong track records.

Regulations by the BC and federal governments also hinder housing affordability.

VRBA advocates a moratorium on new regulations with diminishing returns, especially for small affordable homes under 2,000 sq.ft.

Canada’s regulatory framework is choking the supply of housing and driving up costs beyond the affordability of young families.

We can fix this through a reasonable and efficient regulatory approach.

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This column appears Wednesdays in the Times Colonist.

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