At various social gatherings, I've had to help people understand why development approvals and construction take so long. Since these conversations are usually rushed, I've written this summary for other curious minds.
For most municipalities in Ontario to effectively manage their growth, they hire urban planners and economists to analyze and project existing population data 20 to 30 years into the future. These professionals also estimate costs for building parks, roads, water supply, sanitary services, and other public infrastructure required to service the projected population. These projections, among other factors, are then used by developers as indicators to assess the viability of taking on residential or commercial development projects. As the rate of development increases, the Municipality gets closer to achieving their forecasted population growth, and the budget required to service that growth. In other words, these developments become instruments that help the municipality generate money to maintain parks, roads, water, sanitary services, and other public infrastructure.
To understand why these developments take so long, we would start by following the money. When we understand how the money moves, we can understand any other related item.
Developers purchase lands in the Municipality to build structures that will give them a good return on the cost to buy and develop the land. Developers hire environmentalists, engineers, and planners to design and build their prefered type of development according to established provicial and municipal standards. These teams of environmentalists, engineers, and planners then collaborate to ensure the construction of a safe, environmentally sustainable, and cost-effective development.
At a high level, planners ensure that the new development aligns with the municipality's future plans and projections. Environmentalists verify that the proposed development protects key environmental features. Engineers confirm that there will be adequate water supply, proper sanitary discharge, and no flooding concerns in or around the development. These efforts result in multiple drawings and reports, which are then submitted to the municipality.
When this package is sent to the municipality for approval, the developer pays a fee for the review process. If the municipality is satisfied with the design, they grant approval and request a percentage of the construction cost as securities. Developers also pay development charges and hire engineers and geotechnical consultants to inspect the construction, providing reports and test results to the municipality as evidence of construction quality.
Once construction is completed, the municipality returns the securities to the developer. However, if the developer defaults on the agreed construction scope or schedule, the securities are used to advance the project. After the securities are returned and the development is sold, the developer typically restarts the process at a new location.
Planning justification analyses can take months to complete. Environmentalists run monitoring programs that span entire seasons, and engineering designs also require months of work. Once submitted, the municipality may also take several months to review all these materials.
More often than the professionals would like, several issues arise that need to be addressed. Sometimes, consultants must go back to the drawing board to resolve these problems, which can add another year or more to the timeline. If the developer runs out of funds after receiving feedback from the municipality for additional design updates, it could extend the process by another year. The more complications that arise during approvals, the longer the project takes. In some cases, the design approval process can stretch over 10 years.
In a nutshell, that’s how most homes in Ontario are built and why the process takes so long.