Why permitting time matters
On LinkedIn, Jason Dhami explains the importance of permitting time.
Stripping away the pro formas and any fancy financial terms, the easiest way to think about it is that we annualize our returns on investment when comparing projects.
To illustrate, let’s say a triplex takes 4 months to permit and 8 months to build. 2 million all in cost to execute the project, sell it for 2.3 (767k per unit), 15% annual return on investment.
Now, let’s use a sixplex that takes 15 months to permit and 9 months to build. 4 million all in cost to execute the project. If we sell it for 4.6 (767k per unit), our annualized return is more like ~7.5%. You’d need to sell the units for 5.2 (867k per unit) million to justify the extra time to build, or reduce your cost to execute the project.
The reality of the situation is more nuanced, as land costs are often cheaper on a per sq ft basis on the larger projects (although this is offset by density charges), but the longer the project goes, the more risk you take on market conditions shifting, and interest payments piling up on the land.
The city of Vancouver has cut permitting times for triplexes in half, to six months, using a combined Development Permit and Building Permit. Naturally, there’s a lot of triplex projects happening, and not many larger projects.
As expected, permit applications in the 5 & 6plex market have gone to almost zero this year (2 so far that I can find). One could argue that has nothing to do with permit times & is the result of general market sentiment, but the data doesn't bear that out.
Triplex applications remain at their 2024 & 2025 levels. Why is that?
In July 2025, the city introduced a simultaneous DP + BP permit process that cut permit times in half for these smaller builds (~6 months on average from the early data we looked at). They are also subject to only $3/sq ft density fees, compared to $50-$140/sq ft on larger lots.
What’s a reasonable goal for permitting time?
Edmonton tracks how long it takes to approve multi-unit residential buildings, including both apartment buildings and eight-plexes. The average time for a development permit is 158 calendar days, and the average time for a building permit is 73 calendar days, for a total of a bit less than eight months.
Surrey is processing rezoning applications for multiplexes in 14.4 weeks, or a little over three months.
Back in 2018, Kelowna was able to fast-track approval of four-plexes in less than a month, using pre-approved designs.
100%. I once had a discussion with a friend who was a developer of small and medium-density homes. I was discussing Burnaby's policy for subsidizing tenants who were evicted for buildings being torn down for redevelopment. When I described the costs, his response was essentially, "that's easy, I simply budget that into my price. My biggest cost is interest while waiting for permits approval, since it is an unknown cost."