I recently became curious about the level of involvement of the owner in a complex inner city redevelopment project. As the builder of a growing number of these as of late 2017, I tend to internalize whatever the cost and time investment is to complete the pre-construction planning work without any way of quantifying it. Perhaps if I was doing this project for an investor or client I would be a lot more motivated to track the hours involved in getting to the finish line (the finish line - getting all necessary permits - is actually the jobs' starting line, and I am not there yet on my rowhouse project, but I am oh so tantalizingly close EDIT - 99% complete as of September month end).
The rowhouse has been a particularly nasty, lengthy, and costly process, here is a sen-chronological list of the key events:
- May-June 2016 - agreement reached with seller after months of negotiation. Seller faces foreclosure and agrees to sell after both realtors involved give up.
- July 2016 - mortgage company launches action on default, so property is purchased early to avoid foreclosure. Soft market allows property to be acquired for a good price (this is a huge relief as everything after this is over budget).
- Summer - Nov 2016 - Lengthy land use re-designation public hearing is successful after frustrating disputes with the community association plus politicization of the slow and costly process - the entire fiasco was unnecessary when a few months later the City rezoned an entire chunk of Killarney anyway. Loss of around $15k in unnecessary work.
- Nov - Dec 2016 - Finally we submit the DP for the rowhouse. Countless revisions and edits will be needed to result in a DP that is suitable for the City
- May 2017 - this is sort of a one year anniversary of the project since I have had funds tied up in the land. DP is finally approved, however we soon realize the DP release conditions are impossible because the City acted in a very ill conceived manner.
- Spring 2017 - old house demolished to pacify angry neighbours and deal with vagrancy issues of the abandoned house. Unmentionable details here that I am trying to forget.
- Summer 2017 - behind the scenes negotiation allow us to continue to move forward without the DP collapsing and requiring a full redo. This is ongoing for the remainder 2017 and as of September we appear to be 8 weeks away from a final stamped DP.
- Summer 2017 - Civil engineer is successful at getting a viable stormwater plan approved. Many concessions needed despite the approval leading to very costly installation budget overrun. Costly roof specification changes needed to channel rainwater to catch basin network.
- Summer 2017 - BP development continues with some frustrating slowness and revision delays.
- Summer 2017 - energy model work is launched to deal with new energy code related changes and is finalized for submission. In floor heating system is designed for basement suites. Other specifications for envelope are agreed upon.
- Fall 2017 - BP partial permit applied for and issued by City. Garage changes are mandated to deal with fire code issues, leading to difficult design details (yet to be done).
- Fall 2017 - Contractor selected for underground utility install, planned now for October
- Fall 2017 - realization that entire warm building season has been lost due to planning delays
- Fall 2017 - additional $11k in permit fees needed for work that is of little value for anyone
- Fall 2017 - City changes course and issues the full DP, this was an unexpected bonus as we had thought problems with permit issuance were still lingering.
- Fall 2017 - material cost increases from BC fires and government policies are identified
- Fall 2017 - Can we build something yet?
- Fall 2017 - lumber yard produces the necessary drawings for joist and truss design
- Fall 2017 - Hawaii vacation is booked is this going to be the worst possible time to leave?
At this point in the project I have no way to estimate how much time is personally invested in the permitting process. For 500 hours (which I have undoubtedly done already, maybe more), the cost of this in billable consulting time to outsource it would be significant, but also the fees to do this spread over entire year of low level aggravating work is not worth the effort for a consultant. I was discussing a small survey job with a surveyor recently, (billable rate is $180/hr plus expenses), so as the project owner if I was to charge myself out (to myself) in this example at 1/3 of the surveyor fee I would have incurred a $30k bill. There is no way any client would be able to fund my contribution to this project at a wage level commensurate with my impact on the project for a tiny three unit rowhouse.
To date, my effort to get this project permitted has been, at times, approaching the maximum of what I can realistically contribute while still running other jobs. I have had to mobilize countless resources and relationships to operate efficiently, or even just to know what to do in a process without an instruction manual to follow. And I am still way late, over budget, and extremely frustrated. Those three conditions are a lot better than bankrupt and exhausted, but I am far from pleased with the multi year marathon where there is nothing yet to show on site.
I have counselled numerous aspiring inner city builders to avoid multi-family projects. It is way too much risk and work, and the amount of experience and financial resources needed to tackle a project is getting increasingly onerous. I have another multi family project in the pipeline (with its own saga, some of which has unfolded concurrently), after these are done I am very much reconsidering this type of work. The hurdles and roadblocks being annually implemented by the City are going to shrink margins and harm many projects. Builder beware!
Browsing the project files collected to date may offer a better sense of what has to be compiled to get this type of project permitted. The documentation work is substantive, someone needs to deal with version control, and stay on top of the filing and archive it all. This is work far removed from someone who is supposed to be building houses.