The REGION OF WATERLOO PLANNING, HOUSING AND

Report 2 Downloads 47 Views
The

REGION OF WATERLOO

Report: P-10-023

PLANNING, HOUSING AND COMMUNITY SERVICES Community Services

TO:

Chair Jim Wideman and Members of the Planning and Works Committee

DATE:

March 9, 2010

SUBJECT:

2009 BUILDING PERMIT ACTIVITY

FILE CODE: D07-40(A)

RECOMMENDATION: For information.

SUMMARY: This report provides a summary of building permit activity across the Region in 2009, with comparisons to previous years. It reflects building permit data related to new construction, excluding agricultural, and net of cancelled permits, as provided by Area Municipalities. Despite the global downturn in the economy, new construction activity in the Region remained significant. The total value of building permits issued in 2009 for new construction in the Region of Waterloo was $876.4 million, a decrease of 13% from 2008 values. However, this was still the third highest value recorded in the last 10 years. Total new construction value was comprised of approximately 63% in the residential sector, and 37% non-residential. In residential activity, permits were issued for 2,770 units in 2009, down 7% from the 2,968 units in 2008. Relative to long term trends, the 2,770 units are 11% below the 30-year regional average of 3,099 units. The value of these permits, however actually increased 5% to $548.2 million from $521.6 million in 2008. Canada Mortgage and Housing Corporation (CMHC) reported in its January 2009 Housing Market Outlook that housing starts in the Kitchener Census Metropolitan Area (CMA) in 2009 were down 13% from 2008; lower than the 5% decline CMHC predicted previously(as reported in P-09-029, “2008 Building Permit Activity”). CMHC is predicting a 12% increase in housing starts the in the CMA in 2010. New non-residential floor space decreased 23% to 2.52 million ft2 relative to 2008, and the value of non-residential permits issued in 2009 decreased 32% to $328.2 million from $484.6 million in the same period. However, the 2008 non-residential building permit value was the highest in the past 15 years; the 2009 value is consistent with 2006 and 2007. In a comparison of activity among the three cities and the four townships, 20% of the new residential units constructed and 15% of the new non-residential floor space constructed occurred in the townships.

753708

Page 1 of 9

March 9, 2010

Report P-10-023

REPORT: Building permit activity is one indicator of the strength of the local economy, as well as a predictor of the population growth. This report summarizes building activity in both the residential and nonresidential sectors for each Area Municipality in the Region for 2009. Building activity data for previous years is provided for comparison purposes. These figures are compiled annually by Regional staff, based on data supplied by the Area Municipalities. Total Value of New Construction The total value of new building permits issued in 2009 was $876.4 million. Total residential permit value was $548.2 million and total non-residential permit value was $328.2 million. As shown in Figure 1, total new construction value fell 13% from 2008 levels, however it is still the third highest value recorded in the last 10 years. Figure 1: Total Value of New Construction, 1999-2009 1,200,000 1,000,000

$'000's

800,000

521,610 452,527

600,000

601,220

584,884

588,435

289,869

276,747

308,760

2002

2003

2004

605,616

393,230

491,228

471,268

333,552

334,779

2006

2007

548,160

400,000 352,208 484,658

200,000

305,260

386,521

242,427

328,257

138,086

0 1999

2000

2001

2005

2008

2009

Year Non-Residential

Residential

Non-Residential Activity In 2009, the value of non-residential building permits returned to more normal values after a very strong 2008. Industrial values decreased 25% to $73.8 million from $98.9 million, the value of commercial building permits decreased 34% to $136 million from $204.8 million, and Institutional building permits decreased 35% to $118.4 million from $180.8 million. The highest values for an individual 2009 non-residential building permit, by type, are:  Commercial: $35 million for Research in Motion offices on University Ave W in Waterloo;  Institutional: $24 million for the addition to the Perimeter Institute in Waterloo;  Industrial: $13.25 million for the new UV disinfection building at the Waterloo wastewater treatment facility. Of the 34 permits valued over $2 million, Kitchener issued 13 permits, Waterloo issued 9, Cambridge issued 7, Woolwich and Wellesley issued two each, and Wilmot issued one.

753708

Page 2 of 9

March 9, 2010

Report P-10-023

As illustrated in Figures 2 to 4, non-residential building permit values fluctuate by sector and by municipality from year to year, however, in 2009 values declined in all sectors. Figure 2: Total New Non-Residential Construction Value By Type 1999-2009 250,000 200,000 Commercial

$'000's

150,000

Industrial 100,000

Institutional

50,000 1999 2000

2001 2002

2003 2004 2005

2006 2007

2008 2009

Year

Figure 3: Total New Non-Residential Construction Value by City 1999-2009 300,000

250,000

$'000's

200,000 CAM 150,000

KIT WAT

100,000

50,000

0 1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Year

Figure 4: Total New Non-Residential Construction Value by Township 1999-2009 40,000 35,000

$'000's

30,000

NDU

25,000

WEL

20,000

WIL

15,000

WOO

10,000 5,000 0 1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Year

753708

Page 3 of 9

March 9, 2010

Report P-10-023

Total new non-residential floor space decreased in 2009 in all non-residential sectors. Commercial floor space decreased 35% from 1.72 million ft2 in 2008 to 1.13 million ft2 in 2009. New industrial floor space decreased 13% from 925,093 ft2 to 803,355 ft2, and new institutional floor space decreased 8% from 644,900 ft2 to 593,430 ft2 in 2009. Figure 5 shows the 10-year variation in non-residential floor space among the sectors.

Figure 5: Total New Non-Residential Floor Space 1999-2009 6000

5,239

5000 Sqft (x1000)

4,042

4000

3,771

3,815

3,603 3,000

2,974

3000

3,290 2,761

2,522

2,440

2000 1000 0 1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Year Commercial

Industrial

Institutional

Regional Total

For non-residential permits, Waterloo had the highest dollar value ($136.5 million) while Kitchener had greatest floor space (918,435 ft2 ) among the area municipalities, as shown in Figures 6 and 7. Figure 6: Total New Non-Residential Floor Space by City 1999-2009 3,000

Square Feet (x1000)

2,500 2,000 CAM 1,500

KIT WAT

1,000 500 0 1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Year

753708

Page 4 of 9

March 9, 2010

Report P-10-023 Figure 7: Total New Non-Residential Floor Space by Township 1999-2009

400

Square Feet (x1000)

350 300 NDU

250

WEL

200

WIL

150

WOO

100 50 0 1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Year

Residential Activity In 2009, building permits were issued for 2,770 units. This represents a decline of 198 units from 2008, or 7%. The value of these permits increased 5% to $548.2 million from $521.6 million. Building permit activity was significantly higher in the second half of 2009 than in the first six months. As reported in P-09-065, “Building Permit Activity, January to June 2009”, only 923 residential permits were issued in that period. This was about one-third of the total for the year. As shown in Figure 8, the composition of the residential building activity, by type, was:  1,390 single detached units, accounting for 50% of the total residential units built,  155 semi-detached units (6%),  521 townhouse units (19%), and  704 apartment units (25%). Figure 8: New Residential Units By Structure Type, 1999 - 2009

3500 3000

Units

2500 2000 1500 1000 500 0 1999

2000

2001

2002

2003 S

753708

2004 Year Semi

TH

2005

2006

2007

2008

2009

Apt Page 5 of 9

March 9, 2010

Report P-10-023

The number of single detached units constructed in the Region decreased 17% from 2008, a marked change from 2008 when single detached units increased 19%. At the same time, semidetached units increased 23%, apartment units increased 23%, and townhouse units declined 13%. Over the longer term, the percentage of single detached units constructed per year has fallen from a peak of 78% in 1998 to 50% in 2009. Overall, the ratio of new single detached to new multi-residential units has shifted in the past five years, from about 60/40 to 50/50. This is consistent with directions in the Regional Growth Management Strategy and the Provincial Places to Grow legislation. Map 1 (included as Attachment 1) shows the location of all residential building permits issued for new construction in 2009. Each circle represents one unit. Figure 9 illustrates the residential building permit activity in each Area Municipality in 2009 with 2008 as a comparison. Kitchener reported the highest number of new residential units in 2009 at 1,052; Cambridge reported 742 and Waterloo 432. In the townships, Woolwich reported 265 new residential units, Wilmot 169 units, Wellesley 72 units, and North Dumfries 38 units. Figure 9: Total New Residential Units by Type

CAM KIT WAT NDU WEL WIL WOO RMW

Single Detached 2008 2009 415 366 645 470 191 130 25 38 54 50 135 120 207 216

Semi Detached 2008 2009 2 3 82 77 6 9 0 0 10 21 14 22 12 23

Townhouse

Apartment

2008 182 300 91 0 0 0 23

2009 136 319 35 0 0 6 25

2008 56 62 456 0 0 0 0

2009 237 186 258 0 1 21 1

2008 655 1089 744 25 64 149 242

2009 742 1052 432 38 72 169 265

1,672

126

596

521

574

701

2,968

2,770

1,390

155

Total

% Change 13% -3% -42% 52% 13% 13% 10% -7%

Long Term Trends in Residential Building Activity The total annual number of new residential permits (1979-2009) is displayed in Figure 10. The graph clearly shows the cyclical nature of residential building activity, which reflects many factors including demand, housing prices and mortgage rates. The long-term annual average over the 30year period of new residential units is 3,099. The residential building permit activity in 2009, at 2,770 new units, was 11% below the long term average.

753708

Page 6 of 9

March 9, 2010

Report P-10-023 Figure 10: Historic Residential Building Activity 1979-2009

6000 5000 Units

4000 3000 2000 1000 0 1979

1984

1989

1994

1999

2004

2009

Year

Total Units

30 yr Avg

Comparisons with CMHC Housing Starts Locally, Canada Mortgage and Housing Corporation (CMHC) reported in its Housing Now edition (released February, 2010) that the 2,298 housing starts in the Kitchener Census Metropolitan Area (CMA) in 2009 were down 13% from 2008. This is lower than the 5% decline they had predicted in 2008 (as reported in P-09-029, “2008 Building Permit Activity”), but at the same time they predicted that starts in 2009 would only reach 1,930 units. CMHC’s latest prediction for 2010 (Fall 2009 Housing Market Outlook) is a 12% increase in starts in the CMA for 2010. The decline in the new home construction market in the Region of Waterloo was less than the declines in new home construction across the province. CMHC reported that housing starts in Ontario were down 33% in 2009. Figure 11 below displays the change in starts experienced by nearby municipalities last year. Figure 11: Starts by Market Area Market Area % Change from 2008 to 2009 Guelph -47.8% Hamilton -47.3% Peel Region -49.0% Halton Region -43.8% Durham Region -34.6% York Region -30.9% Province of Ontario -32.9% Kitchener CMA -12.8% Source: CMHC (Housing Now) CMHC is predicting a rebound in starts across the province in 2010 of 2.5%. It is important to note that there are several differences between the statistics reported by CMHC and those found in this report. The first difference is that this report is for all seven Area Municipalities, whereas CMHC reports on the Kitchener CMA (Census Metropolitan Area) which includes only Kitchener, Waterloo, Cambridge, Woolwich and North Dumfries. Secondly, CMHC uses a ‘start’ as the measure of building activity. A ‘start’ is defined as the beginning of construction work on a building, usually when concrete has been poured for the footing. Therefore, annual totals 753708

Page 7 of 9

March 9, 2010

Report P-10-023

may differ due to the lag between building permit and construction start, and also because new housing units created through conversions from industrial uses, commonly known as “loft projects” are not included in the CMHC reports. Area Municipal Consultation/Coordination Building permit data are collected by Area Municipal staff and submitted to the Region either electronically or in hardcopy. They are compiled for use in Regional development charge calculations, development tracking, forecasts, and reporting. Municipal staff are consulted for verification and insight into the data. Ongoing corrections and permit cancellations must be taken into consideration when comparing to previous building activity reports. This report has been circulated to Area Municipalities.

CORPORATE STRATEGIC PLAN: Tracking and reporting building permit activity contributes to Strategic Focus Area 1: Manage Regional Growth to Enhance Quality of Life.

FINANCIAL IMPLICATIONS: NIL

OTHER DEPARTMENT CONSULTATIONS/CONCURRENCE: NIL

ATTACHMENTS: Attachment 1 - 2009 Building Permit Activity Map

PREPARED BY: Chris Rumig, Planning Technician APPROVED BY: Rob Horne, Commissioner of Planning, Housing and Community Services

753708

Page 8 of 9

March 9, 2010

Report: P-10-024 Attachment 1

753708

Page 9 of 9