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.
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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.
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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
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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
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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
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2004 Year Semi
TH
2005
2006
2007
2008
2009
Apt Page 5 of 9
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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.
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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
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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
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Report: P-10-024 Attachment 1
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