Between the last two census periods, the Ottawa-Gatineau metropolitan area’s population grew by 9.1 per cent, in step with Greater Toronto and Vancouver. In order for the area (also known as the Capital Region) to continue offering economic opportunities to newcomers, it is critical that the supply of new dwellings coming to market keeps up with demand.

Municipalities play an important and necessary role in regulating the housing industry. However, municipal governments often burden homebuilders with excessive red tape. In a nationwide survey of developers and homebuilders, we collected data on how residential development is affected by regulation across Canadian municipalities. The survey produced estimates of the length and uncertainty of approval timelines, compliance costs and fees, the role of city council and community members in residential development, and the effects of zoning bylaws in cities across Canada. The results (see the table below) show a stark divide across the Ottawa River.

With approval timelines in all four municipalities (Clarence-Rockland, Gatineau, Ottawa and Russell) averaging a year or longer, there is cause for concern. If it takes too long to get city hall’s approval for housing developments, the supply of new homes may lag behind demand. Moreover, prohibitive compliance costs, such as excessive development charges and legal fees, can also make the economics of some affordable housing options turn sour. These costs and fees in Ottawa are more than double those in Gatineau, despite these cities sharing housing and labour markets.

The frequent need for re-zoning raises questions about the plans and bylaws a city has in place. The difference between Ottawa and Gatineau is stark, with the vast majority of new building in the former requiring rezoning. Similarly, the deterrence of new homebuilding caused by council and community groups in Ottawa is stronger than in Gatineau or Clarence-Rockland.

Ottawa, where survey evidence suggests red tape is the thickest, should look across the river to Gatineau for an example of more effective land-use regulations, which impose less of a burden on building. Indeed, Gatineau grew faster than Ottawa between the last two census periods. Smoothing out the kinks in the process that gets new homes built can pay dividends to anyone looking for a new home in Canada’s Capital Region.