Whitehorse aiming to avoid another 'crisis' in backlogged building permits this year

An official with the City of Whitehorse says he's optimistic about the upcoming construction season even as a city-commissioned report states that last summer's building permit backlog continues to pose a risk to getting much-needed housing built.

The consulting firm Performance Concepts produced the report, which details how the city's processing timeframes for issuing building permits slowed to a grind last summer. The report calls the situation a "crisis," with a low point of one permit being processed per day and approval timeframes exceeding eight weeks.

Work to avoid a repeat of last year's backlog is underway, said Peter Duke, the city's manager of land and building services.

To encourage developers to apply for permits early, the city has made permits valid for longer, from six months to one year. Council has also considered reducing fees for early applications, Duke said.

The first two months of the year are less busy for permits. But the report flags financial disincentives for builders to apply early. One is a requirement to pay security deposits at the time of application. 

Duke said the city could delay those payments until permits are issued, a step that would allow builders to keep that cash on hand.

Duke also highlighted measures such as changes to the building and plumbing bylaw that council is considering, as well as an online system that would help developers manage and monitor their applications.

"I'm really optimistic that we're not going to have another crisis this year," he said.

"The building permit backlog has really allowed us to think critically about the way we do things. And I think as much as it was painful to go through, it's really helped us trim red tape."

'The entire supply chain grinds to a halt'

Whitehorse's Official Community Plan predicts the city's population — now just over 33,000 people — could top 40,000 by 2040, requiring as many as 6,150 new housing units by that time. However, building in Whitehorse is challenging because of its short construction season, shortage of technical professionals and its need to import materials.

The Performance Concepts report says the city's "development/construction eco-system is especially vulnerable to regulatory/approval disruptions.

"The entire supply chain grinds to a halt if the city cannot live up to its commitment to consistently provide timely development permits, building permit approvals and field inspections."

Performance Concepts describes last summer's permit backlog as a "double whammy" that could be traced to 2023. Its report says the Yukon government's contractor was late to deliver fully-serviced lots in Whitehorse's Whistle Bend neighbourhood which meant permit approvals and construction were pushed into 2024. The consultants say signs of that workload "should have been readily apparent at city hall with flashing warning lights by the end of 2023."

Another factor was the city's new submission requirements in the second quarter of 2024 to demonstrate compliance with the National Building Code. The city developed an application checklist and started screening applications for completeness before a full review and decision.

Some requirements included showing the location of the heat recovery ventilator and hot water tank, or proving spatial separation from other buildings, said John Vogt, owner of local builder Vogt Homes.

"The city really rolled out these requirements right away, stating that they had to and it caused this massive backlog. And this is something that there should have been warning about," Vogt said.

"The city should have recognized that permitting timelines were going up and they should have been looking at outside help."

According to Duke, the change was meant to help developers follow a building code that's longer than 1,500 pages and is frequently updated. Further, Performance Concepts does not dispute the need for better compliance in Whitehorse.

But given the city was already facing an increased workload stemming from the delayed Whistle Bend lots, it's not clear why the changes had to be implemented at that time.

"That's a good question. We had new staff that came on and we did find that there were certain parts of our processes that needed to be tightened up," said Duke, who worked in a different department at the time. "We don't just have a duty to ensure that the builders are meeting code. That extends to the end homeowner that's going to be taking that on."

Providing sufficient runway for industry to adapt to change is one lesson the city learned, Duke said. He said the city has also seen benefits in hosting builders workshops, including a series of webinars on the building code.

Duke said staffing vacancies also played a major role in last year's backlog, and he's still trying to fill one position. The report says after a second building inspector left, the city had just three full-time inspectors at the height of the building season. In July and August, the city started improving processing times by redeploying staff and hiring external contractors.

Performance Concepts says the construction delays equated to multiple millions of dollars. Vogt says he came close to laying off his entire staff.

The precise impact of last year's backlog on housing supply is not yet known, said Marc Perreault, president of the Yukon Real Estate Association.

However, he believes home prices may rise for a few reasons, including pent-up demand from young families who delayed purchasing because of high interest rates. With rates lowering, he's expecting more demand this spring.

"And there may be some supply limitations because of the permitting backlogs," Perreault said.

Vogt praised some of the city's actions like its online permitting system, and amendments to the building and plumbing bylaw.

But he agrees with the report when it says the backlog crisis is not over, and that the primary "ripple effect" this year would likely be the increased workload for mandatory and time-sensitive inspections.

Vogt said there were times when he waited two weeks for an inspection, when the recommendation is to have one within three days.

"I'm not sure how the city is going to meet that but I'm hoping that they can come up with a plan to meet those requirements," he said.

The report lays out what's at stake.

"The economic, housing supply, and reputational impacts for Whitehorse would be significant," it says.

"It is mission-critical that the City of Whitehorse halt the building permit backlog 'ripple effect' in its tracks during the 2025 construction season."