Municipal Permit Revenue Strong While Housing Starts Decline

Rising prices of materials and labour are boosting the cost of building permits because permits are charged as a tax, not as a fee for service.

For example, despite rising housing demand, home starts in Saanich have been in decline for a number of years:

2017 – 625 new homes

2018 – 539 new homes

2019 – 203 new homes

2020 – 200 new homes

However, according to their Financial Plan, revenue from permits remains strong. They attribute this to “permitting revenues increase due to increased cost of construction.”

In addition, their expenses are increasing despite an overall decline in housing starts of -68%. There should be a decline in expenses.

Inspection fees should be based on the cost of providing the inspection service, not the rising cost of lumber due to supply shortages from mill closures.

Many municipalities use the same formula, adding significantly to the cost of housing.

The BC government recently announced $2 billion revenue from their Property Transfer Tax charged up to three times in the development of a single property.

Three levels of government treat housing as a cash machine, so it’s no wonder the housing prices are sky high.

Federal, provincial and municipal govts tell builders where and what to build (zoning); when to build (permit approvals); how to build (building code); and how much revenue they require from the project (GST, PTT, DCC’s, permit fees, amenity contributions). The lack of housing affordability rests squarely with government.