A new research report from the C.D. Howe Institute states that government regulations and red tape added, on average, $168,000 to single family houses in the Greater Toronto Area and $644,000 in Vancouver between 2007 and 2016.
Buyers in Canada's most overheated real estate markets paid more to buy a house because of zoning regulations, development charges and housing limits in and around southern Ontario's Greenbelt and Vancouver’s conservation areas.
The C.D. Howe study also found regulations caused single family home prices in Victoria to increase by about $264,000, Calgary costs to jump by $152,000 and Ottawa-Gatineau's to spike by about $112,000. The report concludes that home prices tend to spike when it is difficult for developers to get permits based on intensification and densification targets, and when they are contending with restrictions on development on land between urban growth boundaries.
The study also found that allowing development on land dedicated for the greenbelt could reduce single-detached home prices by around $50,000 in Hamilton and between $25,000 and $30,000 in York and Halton regions alone. Modestly increasing land availability for housing while cutting development and zoning costs would have an even larger affect. It would slash the cost of a single detached house by more than $70,000 in Toronto and more than $100,000 in Hamilton and around $125,000 in York Region.
The study notes that Vancouver and Toronto, which are both experiencing high demand for housing, had construction costs of $350 per square foot in 2016.
