Study: Poor processes add thousands to Toronto development costs

Key Takeaways:

• The report found that delays and inefficiencies within the city of Toronto’s Committee of Adjustment (COA) process add $21,000 to $58,000 annually to the cost of renovations and infill building projects.
•  The study found that the total average decision timelines for typical COA applications, regardless of COA district, were 95 days 
• The report recommends delegating authority for minor variances to staff and fixing the underlying zoning issues that are creating increasing volumes of applications.

The Whole Story:

Delays and inefficiencies are adding tens of thousands of dollars to construction projects, a new study shows. 

The study, commissioned on behalf of the professional renovation industry by the Building Industry and Land Development Association (BILD) and conducted by Altus Group Economic Consulting, found that delays and inefficiencies within the city of Toronto’s Committee of Adjustment (COA) process add $21,000 to $58,000 annually to the cost of renovations and infill building projects. The study further identified that in order to meet the city’s goal of building 285,000 homes by 2031, the system must be overhauled.

“Toronto is a rapidly growing city, and the building of infill homes and renewal of existing housing stock add much-needed housing supply for current and future residents,” said Justin Sherwood, BILD’s senior vice president. “With the city recently adopting various zoning reforms such as four units per lot as of right, and looking to make additional changes in the near future, the need for a more efficient process that reduces strain on city resources has never been greater.”

Altus Group Economic Consulting was retained by BILD to undertake a study of the city of Toronto’s COA timelines for decisions on minor variances, as part of a broader examination of the factors contributing to housing affordability challenges. BILD stated that the Altus study reinforces the city’s own findings, through a study with KPMG, that process improvements and data transparency would support approval timelines and efficiency.

The Altus study looked at the timelines for minor variance applications for the last eight years (2015-2022), using data from the City of Toronto’s Open Data Catalog. It found that the volumes of applications to Toronto’s COA and TLAB processes have doubled over the last decade, resulting in lengthy delays. These delays can add 8% to 14% annually in additional construction-related costs, amounting to between $9 per square foot to $19 per square foot annually, or approximately $21,000 to $58,000.

Notably, the study found that the total average decision timelines for typical COA applications, regardless of COA district, were 95 days across the entirety of the 8-year period. This is 65 days longer than the 30-day service standard required by the Planning Act and 32 days longer than the 63-day target for service standards set by the city.

The report provides six major recommendations for action by the province and the city to successfully improve decision timelines for minor variances. Most notably, it recommends delegating authority for minor variances to staff and fixing the underlying zoning issues that are creating increasing volumes of applications. To see all of the recommendations, download the report.

“Renovators in Toronto have long been advocating for improvements to the COA process,” said Peter Di Scola, chair of BILD’s Renovator Executive Committee. “The current process sees a 93-95% approval rate of applications through the COA process, meaning it would be far more efficient for the City to update zoning bylaws to permit the most common types of COA applications.”