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More than half of housing units in London’s development application pipeline have had no activity in two years or more, but one industry leader is downplaying any concerns.
A staff report heading to council’s planning committee Tuesday explains that of the 19,241 housing units currently in the “latter stages” of the development process but that have not obtained a building permit to start construction, 51 per cent have not progressed in more than two years.
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While the number might sound alarming, London Development Institute executive director Mike Wallace says there are several reasons developments may be stuck in that stage.
“The process for a development application . . . can take anywhere from five to over 10 years,” he said. “Being two years out isn’t a long time in the development process.”
Wallace said stalled applications can happen for many reasons – primarily based around building permits eventually expiring if no work is done.
He described examples, such as a large, multi-phased subdivision that’s approved in full but will stagger pulling permits for its phases. If a developer has several high-density projects approved, they may have to wait until one is mostly or fully completed.
“You’re not going to pull the permit now for Phase 4, when you’re building Phase 2, because permits expire – you have to reapply for them again,” Wallace said.
City staff also note the land involved in some development applications may have swapped hands since the application began, and the new developers may not have moved on the process yet.
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Wallace also detailed that builders may have been waiting out the difficult economic conditions of the past few years, between increased costs of labour and construction materials, high interest rates, and inflation.
He points to the overall number of homes in the pipeline as a positive indicator of home building in London, saying he would be worried if that number dropped too low as opposed to how many may be stalled.
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Deputy mayor Shawn Lewis is a member of council’s planning committee. He pointed to recent interest rate cuts, and the recently approved, revamped former London Psychiatric Hospital lands development supporting 8,400 units, which developers have said will take more than 20 years to complete.
“It frankly is not surprising to me that we have a number of zoning approvals that are kind of stockpiled, waiting for the economic conditions to be right,” he said.
Lewis believes that as interest rates and inflation continue to cool, more developments will make their way out of the pipeline.
Also coming to Tuesday’s planning committee meeting is a staff report outlining the number of building permits issued this year to the end of August. The figure, and percentage change from the same period in 2023, are:
- 2,645 new building permits (5.38 per cent increase)
- $1.6 billion construction value (87 per cent increase)
“I think it continues to reflect a trend in the right direction,” Lewis said.
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