City sets record for building permits

Tuesday, July 20th, 2004

The boom extends across the region and is putting pressure on both municipalities and developers

William Boei


CREDIT: Photo Mark van Manen, Vancouver Sun, Graphics Vancouver Sun

Construction (inset) is underway on the large site between the off ramps of the Georgia viaduct; an artist’s drawing of a city-approved development including a Costco, office and residential space, all in a downtown tower.

Vancouver set a record in June for the value of building permits issued in a single month and is headed for an all-time high for the year as a regional building boom keeps perking along.

The value of building permits issued is running at about double last year’s pace, Rick Scobie, Vancouver‘s director of development services, said Monday.

The boom, which extends across Greater Vancouver, is putting pressure on the ability of municipalities to process permits and is forcing builders to fine-tune their building schedules so they don’t lose skilled workers between jobs.

Scobie said he thinks the hot pace is being driven mainly by low interest rates, and possibly by optimism about the state of local and provincial economies.

“And who knows, maybe it is already being fuelled somewhat by anticipation of the Olympics,” he added.

In June, with large residential developments around the downtown core leading the way, Vancouver issued building permits for $518 million in construction value — the highest for any month on record.

That includes a permit for a major Concord Pacific Group project with 900 housing units in four residential towers atop a 145,000-square-foot Costco store to be built between the Georgia and Dunsmuir viaducts near GM Place.

“June is one of our busier months historically, and this year it’s just been phenomenal,” Scobie said.

The six-month Vancouver building-permit total of $1.04 billion is nearly up to last year’s full-year figure of $1.06 billion and the city should easily pass the 2002 record of about $1.1 billion.

Residential construction was the biggest contributor, Scobie said in a memo circulated to city councillors, with permits for 4,865 new housing units issued so far this year, up from 1,718 by the same time last year.

Large residential projects accounted for 54 permits totalling 4,041 housing units for an average of 75 units per project.

Some of the building permit applications were likely filed in June to beat a July 1 increase in Vancouver‘s development cost levies, and some of those projects may not be built immediately.

“Nonetheless, all of that construction will happen,” said Peter Simpson, chief executive of the Greater Vancouver Home Builders’ Association. “That’s a great sign for jobs and for economic development in the city of Vancouver.”

Simpson emphasized that the boom extends far beyond downtown Vancouver, which gets much of the attention.

“There’s activity right across the Lower Mainland,” he said. “We’ve got single family homes, we’ve got town houses, three- to four- storey condominiums. … Some builders have multiple sites going at the same time.”

Scobie said the demand for development and building permits is putting a strain on city hall’s ability to process applications.

The city is approving more overtime, calling in temporary staff and deferring vacations, but is still having trouble processing applications for development permits.

A development permit for a major project, which normally takes 12 to 13 weeks, is now taking up to 18 weeks, Scobie said. But the city remains on schedule with building permits, maintaining a five-day turnaround.

Scobie said other Greater Vancouver municipalities are in the same boat, handling large numbers of building permits, bringing in extra staff and working overtime.

Simpson added that the building industry is struggling — but coping, so far — with a shortage of skilled trades.

“Builders are scheduling their jobs so they’re not left in the lurch by not having people to complete the work,” he said.

He said industry is working with government to try to speed up trades training, and some workers who left B.C. during the lean years are starting to return.

Other areas experiencing building booms, including California, have had to put projects on hold for lack of skilled trades, Simpson said.

“We’ve had some scrambling, but there have been no projects that I know of that have been put on hold because they can’t get the workers.”

He said it’s important for municipal governments to keep up with the flow of applications so as not to disrupt finely-tuned construction schedules, and singled out Surrey for its efforts in hiring more staff, ordering overtime and bringing in people to work weekends.

Economist Helmut Pastrick said the boom should continue for some time.

Home-building activity in most of Canada, including Ontario, has begun to taper off, but B.C., which lagged the national economy, “can reasonably expect further gains,” he said.

Industrial construction in B.C. is beginning to show increases as well, said Pastrick, chief economist with Credit Union Central of B.C.

Office and hotel construction should move into a higher gear in the next year or two, he said.

Pastrick said there will be ebb and flow, but generally, construction should be in an upswing for the rest of the decade.

“The trend between now and the Olympics will certainly be up,” he said.

“There will be further strong gains, and then we’ll see some brief periods of softness at some point.

“This year and next year I’m expecting more gains in residential construction, and the gains in non-residential will begin to accelerate later on.”

© The Vancouver Sun 2004

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