Canada Drowning In Insanely Slow Construction

[Economy 53,075]

https://www.bnnbloomberg.ca/doug-ford-s-fix-for-toronto-housing-crisis-is-easy-build-more-homes-1.1204897

 

In competitiveness reports Canada usually does quite well overall in rankings but it's worse category is usually in red tape over permits to build essentially anything or approvals to start anything

 

The Government has tried to control soaring home prices with foreign buyers tax, shorter amortization periods, tougher downpayment rules and now an interest rate stress test to limited success...

 

The core issue isn't because of speculators but rather that there just isn't enough construction to keep up with population growth. Despite really high home prices home builders have not picked up the pace of building and vacancy rates remain at historic lows

 

Builders complain on average it takes over a decade, 52 reports and studies to get a project approved in big cities and that infrastructure projects that are needed before new real estate is built also takes so long in regulatory reviews that construction of new housing units often gets pushed back even more. It also raises the breakeven costs of home construction forcing insanely high prices for builders to justify building anything 

 

Canada last year ranked second worst Nation in the world according to a study over extremely complicated and long approval processes for permits on starting a business, and even worse if it involves construction

[Economy 53,075]

I believe this is true. My boss (he owns a steel construction company) says the approval process and permit processes on projects he's involved in are so painfully slow that it's hard to budget ahead of time and plan ahead because preparations have to start so far in advance before anything can start

 

Also everytime there's a land despute with a municipality it takes an eternity for the Government to clarify what it will allow or not allow

 

He says delays and uncertain time frames often damage his company more than when there's a recession

[Delulu Rogers 7,676]

45 minutes ago, Economy said:

but rather that there just isn't enough construction to keep up with population growth.

I still don't get why we can't limit our population growth

[Curunir 7,510]

I hate it when excessive bureaucratic bullsh*t hinders any type of progress in society 

[Economy 53,075]

1 hour ago, ChrisC said:

I still don't get why we can't limit our population growth

Our population grew 1.4% last year... By historical standards that's not that high... Birth rates are also at a record low and population is aging

 

Demographically speaking Canada doesn't have an overpopulation problem at all...

 

We were able to keep up housing supply adequate and affordably during times of much faster population growth like in the 1950s and 1960s

 

Population growth of 1.4% shouldn't be so difficult to keep up with so clearly there's a problem... Clearly something is inhibiting our ability to create housing like we used to

[Economy 53,075]

1 hour ago, Curunir said:

I hate it when excessive bureaucratic bullsh*t hinders any type of progress in society 

I know... Here in Canada the paper work and approvals that have to go back and fourth and requirements that have to be met to get a darn permit for anything is insane

 

In the US the housing boom only lasted a handful of years in part because when prices went up home builders found more profit and demand in their houses and increased supply until there was too much on the market and prices collapsed

 

Here in Canada the housing boom has lasted WAY longer than the US housing boom of 2002-2007 and prices gotten even more rediculous and even that isn't enough to encourage more supply

 

In Toronto for example the biggest metropolis housing construction are estimated to be 20% lower than population growth requires despite such high prices and demand

 

That 10 year long paper work and approval process must indeed have something to do with the problem