Michael de Lint / RESCON
Recovery and red tape
Many jurisdictions, including Ontario, are looking at construction to kick start their economies as they recover from Covid19-related lockdowns. Ontario’s building sector is mired in red tape (in particular, a very slow planning approvals process) especially in Toronto and the rest of the Greater Golden Horseshoe (GGH). This makes it harder to kick start construction activity. The impact of red tape is that the good urban outcomes (e.g. a prosperous, liveable City) that we want, takes too long to achieve, thereby reducing new housing supply reducing the economic benefits that would arise from a construction sector fully responding to demand.
Greater Golden Horseshoe’s red tape “surcharge”
With high rates of in-migration and a strong economy, the GGH leads North America in new construction. Still, new housing supply is much less than demand, resulting in excessive house prices and rents. People pay extra for GGH amenities and then a further surcharge because of: i) artificially reduced new housing supply caused by slow approvals; and ii) the GGH’s huge transit deficit artificially reducing new residential building opportunities in this megalopolis.
Premier Ford: Ontario’s “rail-transit czar”
On July 8,2020, Bill 171, Building Transit Faster Act, 2020, received royal assent. The Bill addresses the construction of several new lines: the new Ontario Line, the Scarborough Extension, the Yonge subway extension, and the Eglinton Crosstown West Extension. Premier Ford, working with key Ministers in Municipal Affairs and Housing (S. Clark) and in Transportation (J. Yakabuski, J. Yurek, and currently C. Mulroney) have done more to address deficits in GGH rail transit construction, than any Premier in the past 20 years. That’s not what many expected. Key aspects of the Ford approach to subway and GO rail system investments (including GO station redevelopment in Mimico and a new GO station and community hub in Innisfil) is the use of public-private partnerships (PPPs) that use air rights above and near transit stations to recycle transit-induced land value increments to fund or renovate new stations. Such win-win projects are helping to fix the transit and housing deficits at the same time, via transit-oriented residential development. This is not a new idea-but Ontario is now embracing best practices. (see my earlier RESCON blogs on Hong Kong, Holland).
Mimico GO station proposal. Source: vandyk.com
Bill 171 addresses Premier Ford’s plan to construct several new rail transit lines including the Ontario line. Photo by Toronto Star
Progress on streamlining the planning system
Also, Minister Clark has been reforming Ontario’s planning system by, among other things, removing the Planning Act’s section 37 “extortion racket” which created a perverse municipal incentive to “under-zone” land in order to collect these funds, thereby reducing much needed housing supply (approval delays result in supply reductions). This system is being replaced with the Community Benefits Charge (CBC) and an expanded development charges system. Other important changes include consolidating zoning and site plan control in selected mass transit station areas (MTSAs) under a new “Community Planning Permit” system, and a greater willingness to use Minister’s zoning orders where municipalities are slow in approving much needed housing.
Interestingly, a World Bank report that ranks countries in terms of ease of doing business, identified slow site plan approvals as a major source of planning delay in Toronto. Implementing these changes, particularly faster PPP based transit construction and streamlining the planning system, are very complex endeavours. Ford’s government has been undertaking the complex work to implement a modernized system.
Environmental Assessment (E.A.) Racket
Ontario’s E.A. system is another source of unnecessary delay. Some ideas to consider: a) Singapore’s best practice approach: which recognizes that environmentally sound developments will happen (e.g. GO electrification) so the right approach is not whether, but how do we use best practice for minimizing environmental impacts; b) London’s Master Plan approach: the E.A. is integrated into the master (official) plan rather than being a separate bureaucratic enterprise. Ford’s Government seems to be taking action on the EA front in relation to the Ontario line. As a World Bank consultant, I have seen E.A.s flourishing as a whole new industry, spawning new bureaucracies, from Trinidad & Tobago to Uzbekistan.
Foundational requirements for the 3-point plan
Much has been accomplished already but more can be done to speed up housing development. Some other systemic approaches to modernizing the system are outlined in the “3-point plan”. But this plan needs to be constructed on a solid foundation that includes:
a) Total agency transparency: A fully transparent regulatory system allows for better mobilization of private sector resources including industry licensed and registered professionals (architects, engineers, planners and others) who become partners in compliance. Industry consultants need manageable on-line access to all information necessary to submit complete and compliant applications. This information includes: detailed planning maps, policies, checklist, and approval criteria, as well as key regulatory official contacts and application status tracking (via e-permitting). The Province must require all approval bodies to maximize transparency for maximum regulatory system efficiency.
b) Common data standards for comprehensive Ontario-wide e-permitting: Development and building permit and applications involve approvals and clearances from many agencies (municipal, provincial, and federal). To speed up inter-agency on-line communication and file transfer, we need interoperability for the land use planning approvals and e-permitting system and that means common data format standards including: common mapping for Official Plans and Zoning By-laws; definitions and application forms; (Ontario replaced many unique municipal building permit forms with an Ontario-wide building permit application form). The Ontario Building Officials (OBOA) has started work on data standards that needs to be fast-tracked.
E-permitting, digital web-based consultations, video and drone based remote inspections are on the way
A 3-point plan
Building on these foundational elements, the following 3-point plan can further streamline housing development:
1. Fast track housing development by using pre-approved building plans
Some large homebuilders will construct virtually identical detached houses in new communities located in different GGH municipalities. Nonetheless, the common practice is that these identical building plans are separately reviewed and approved by each municipality in which these identical buildings are constructed. The Building Code Act under Article 6.(1), actually allows municipalities to enter into plans review agreements so that a building plan approved and certified in one of the participating municipalities can be fast-tracked in all the other participating municipalities
Under Article 6.(1) plans review agreements, the builder would provide code coordinated, code compliant plans that would be reviewed and certified by the “Reviewing municipality” and would under also under this agreement, be recognized by the “Issuing municipality” where the building is constructed. The “Issuing municipality” would be responsible for ensuring that any site-specific matters are addressed including soil conditions that may affect foundation design, checking for compliance with appliable law (planning and zoning compliance), along with inspections during construction. Article 6.(1) agreements could be developed for buildings under prescriptive “Part 9” provisions of the Building Code (houses and smaller site-built or prefabricated buildings) and also for larger professionally-designed provisions under “Part 3” of the Building Code (buildings over 3 stories and with a building area over 600 sq. m.).
Details for agreements under Part 3 involving multiple professionals, may be different from those related to Part 9 buildings. In the case of Part 3 buildings, the concept could be applied to “missing middle” type housing such as 6 to 12 storey site-built, as well as modular CLT and mass timber residential or mixed-use buildings that are intended for in-fill development near transit stations or along arterial roads.
To speed up and reduce uncertainty in the planning process, these pre-approved buildings that meet local site plan requirements (re. building location, size and exterior), can then be digitally inserted as 3D images into GIS enabled plans that outline the proposed building’s location relative to existing buildings and infrastructure and linked to relevant planning polices and maps. In at least one Helsinki-area municipality, on-line consultations incorporate real-time public comments and regulatory body responses. Also, pre-consultations and design charrettes with key regulatory agency decision-makers, as done in Copenhagen, can further speed up consultations and panning approvals.
2. Industry professionals (e.g. planners, architects, engineers) submit complete, coordinated and compliant plans for faster approvals
Too often in Ontario there is an unhealthy symbiotic relationship between regulators and industry. Regulators often blame delayed approvals on incomplete and non-compliant industry applications, but these regulatory agencies often don’t make available all information for a complete and compliant applications. And, given the very slow approval process, industry practitioners often submit incomplete applications to “get in line” and to give regulatory officials the satisfaction of finding errors. As a result, we often have multiple submissions. This industry-agency relationship is not only symbiotic, it is idiotic. Total regulatory agency transparency, e-permitting, and pre-consultations or design charrettes, can greatly speed up the approvals process.
We also need to rethink the relative roles of government and industry. A complete and compliant development or building permit application from industry professionals (such as planners, architects and engineers and other professionals), is one that is coordinated where all building design and planning components fit together without gaps and conflicts, and the builder/developer has engaged an independent peer reviewer to minimize errors. To do that industry consultants need easy access to all information. The regulatory agency’s job is one of auditing. This includes: overseeing the process; confirming that key documents are submitted with professional signatures attesting to regulatory compliance (e.g. from designers, planners, coordinating professional, peer reviewers); and undertaking technical audits as necessary. Audits may include: applicants with a history of compliance problems; and random audits to keep all practitioners honest. This audit approach can be applied to both the building and planning areas.
It is not rational for industry to complain about red tape and at the same time submit to regulatory agencies applications that are incomplete, uncoordinated and not compliant.
in some jurisdictions around the world independent third-party review or certification of development and building plans has been assigned to accredited private firms. Therefore, there is nothing particularly revolutionary about the approach outlined above, which calls for a greater reliance on the developer’s professional team to attest to compliance. This team includes professional designers/planners, coordinator and builder-appointed independent peer reviewers acceptable to regulatory authorities.
3. Municipalities need to fast-track planning updates
Municipalities need to accelerate their updating of official plans, secondary plans and zoning to align with the provincial policy. The province is proposing a more simplified approach to the existing ‘Land Needs Assessment Methodology’, including Amendment No. 1 to ‘A Place to Grow: Growth Plan for the Greater Golden Horseshoe (‘APTG’). These documents provide direction to municipal Official Plans so that they can be better aligned with the provincial interests, as outlined in the Provincial Policy Statement, 2020 (‘PPS’). As well, the release of proposed Amendment 1, with a simplified ‘Land Needs Assessment Methodology’ provides municipalities with an opportunity to complete their July 1, 2022 Municipal Comprehensive Reviews to conform with APTG and be consistent with PPS 2020 provincial objectives as well. Let’s keep to this schedule!
Therefore, as noted above, Ford’s government has introduced very important improvements to Ontario’s planning regime.
Digitization (e-permitting and digital on-line consultation) can also help speed up that process. Digitally based applications using pre-approved building plans can also help “seed” new development and planning templates similar to the way a snowflake’s amazing crystalline structure forms around a dust particle. Of course, municipal secondary plans and zoning amendments seeded by a proposed development, should align with Provincial Growth Plans and Provincial Policy Statements.