Financial pressures, competitive pressures, fear of losing one’s job, even ego, can sometimes drive even respectable people to do less-than-upright things.
That’s why in government and business, we have systems of checks and balances (as flawed and inadequate as they may sometimes prove to be).
So I read with some surprise last week that the Province of Ontario is considering a new certified professionals program that would allow architects and engineers to approve building permits, instead of a municipal employee.
In other words, private sector developers would be able to hire their own private-sector building inspector to sign off for them. The obvious motivation is to accelerate the building approval process, so that shovels can get into the ground faster.
Or as the province puts it, “modernizing and transforming the delivery of building code services to help speed up the construction of new housing and building projects, and better support Ontario’s $38-billion building industry.”
An appropriately cold reception
The CBC wrote about how the City of Toronto is pushing back against this idea. I am sure it’s not the only municipality doing so. According to the CBC, even The Ontario Association of Architects is cool to the idea:
“As risk is transferred from municipalities to individual practitioners, the profession’s liability would increase, and higher insurance costs would directly translate into higher building costs,” read the association’s letter.
Developers often get a poor rap, but they should be viewed from the perspective of business people who create real estate projects in response to market demand. Like anyone else, they face those pressures that I cited above. So does everyone in any industry.
Take the cautionary tale that is Boeing.
Critics allege that regulators for years have been too soft and lenient with the aerospace giant. They point to a pattern that has emerged over decades leading up to last year’s 737 Max crashes (read this recent New York Times piece).
They allege that it’s long been too easy to fix blame on the human error of a dead pilot rather than suggest there might be a systemic problem with an aircraft’s design, or systems, or the training of pilots.
Without the proper oversight, efforts could be made to get safety issues passed when they shouldn’t be. Often, a perception that it’s easy to avoid getting caught is all the temptation people need to cross the line.
Our building permits model exists for a reason
I have a book at home about historic railway disasters which cumulatively have led to the safety rules we have in place today.
What would seem today to be an obvious safety feature that must of course be part of any design only came about after an accident or accidents that damaged property and claimed lives. Take brakes – when the first train got running, it didn’t have any.
No one had given thought to stopping it, because stopping a vehicle had never been a problem before.
Similarly, I spoke with one of the engineers who worked on the build of Phase 1 of Ottawa’s problem-plagued LRT.
I made a comment about how the 12-kilometre route took longer to build in the 21st century than it took to build a railway from just west of Ottawa to Vancouver in the 19thcentury. His retort was that they planned for zero fatalities – versus the 19thcentury, when there was about one death per mile of construction.
Fair enough. And yet, somehow, we have still ended up with a system that has suffered, and continues to suffer, from every imaginable glitch. You have to wonder, “how did this happen?”
Which brings us back to development.
I have written before about how it often takes too long to take projects from genesis to completion. With these delays, some projects can miss the economic window for success because planning approvals take too long.
We need a balanced approach that gets the job done on time, with independent oversight.
There will always be those bad eggs
On the other hand, it’s always a bad idea to leave the fox running the hen house. While the work that I do is less critical than construction approvals, I am regularly subjected to manoeuvring by clients with their own agendas.
On two occasions, I have even been offered outright bribes – both rejected, I should say.
In an industry like property development where the financial stakes are high, you need the regulator to be independent. For real security and protection of the public, the inspectors need to be rotated frequently so they don’t have the opportunity to get too familiar with any one developer.
What this is all about is protection of the public interest and maintaining a level playing field for all developers in terms of what they have to do to get their job done right.
It may seem attractive to lower the cost of running government by transferring the cost and staffing to someone else.
However, there are certain functions of government that, in order to protect the public interest, must always remain with an individual who can be expected to be as impartial and independent as possible.
Lowering the cost of government won’t make development cheaper, as I mentioned above. Regulators and inspectors shouldn’t be paid by the people they are charged with regulating.
To discuss this or any valuation topic in the context of your property, please contact me at [email protected]. I am always interested in your feedback and suggestions for future articles.