Written by Kyla Tanner
July 25, 2019
On June 6, 2019, the Government of Ontario passed Bill 108, More Homes, More Choice Act, 2019, amending 13 existing statutes, including the Planning Act, Local Planning Appeal Tribunal Act, and the Development Charges Act. Several of these Acts have gone through multiple iterations of amendments in the last few years, requiring developers and planners to understand multiple amendments. Prior to Bill 108, there was Bill 139, Building Better Communities and Conserving Watersheds Act, 2017 , passed in 2017, updates to the Provincial Growth Plan for the Greater Golden Horseshoe in 2017, Bill 7, Promoting Affordable Housing Act in 2016, and Bill 73, the Smart Growth for Our Communities Act, which included Planning Act amendments in 2015. Bill 139 introduced significant changes to the planning appeal system, replacing the Ontario Municipal Board (OMB) with the Local Planning Appeal Tribunal (LPAT), and changes to municipalities’ planning and development application review and approval process.
Bill 108 is advertised as a plan that will make it easier for developers to build housing faster by removing red tape. At this time, the proposed amendments are in varying stages of implementation. Some amendments have regulations that provide additional details, but even some of these are still open for comments. This blog post will look at four overall changes and their possible relation to the development of affordable housing: Section 37 and the new Community Benefits Charge; inclusionary zoning; development charges; and planning appeal changes. It should be noted that it is currently unclear what impact the amendments will have on affordable housing development because after the regulations are set municipalities have to interpret them and incorporate prescribed aspects into their own Official Plans, By-laws, and strategies, which developers then abide by.
Section 37 and the New Community Benefits Charge
The density bonusing that we saw in the old Section 37 is no longer a specified item for municipalities to negotiate with developers in order to secure trade-offs for community benefit. Instead, this has been replaced with a new Community Benefits Charge (CBC) that combines benefits (Section 37), parkland (Section 42), and covers some development charges described as “soft services”. The purpose is to address the costs of providing services to new residents as a result of development in an area. Payment of the CBC is a condition of approval of development or redevelopment. The charge applies to most development and will be used to fund parkland, libraries, childcare, affordable housing and public art.
It is currently unclear as to how the charge will be administered, at what rate, and how the wide range of services that receive money from the fund will be prioritised. We do know that the money will be kept in a special account and that the municipality must allocate at least 60 per cent of the funds at the beginning of each year. Municipalities are required to have a Community Benefits Strategy before passing a CBC By-law, which must comply with all prescribed requirements. These by-laws are expected to be enacted by January 1, 2021. The charge amount will be based on a percentage of land value. A professional appraisal, or multiple appraisals, will be required if any disagreements arise between the land owner and City valuation.
The Ontario Minister of Municipal Affairs and Housing has published proposed regulations to provide additional detail for Bill 108’s provisions. The CBC regulations are currently open for comments until August 21. The regulations propose that some types of developments be exempt from the charge, such as: non-profit housing, long-term care homes, and universities and colleges. It appears to be at the discretion of the municipality whether to incorporate this proposal into its policies.
The largest change related to the CBC for affordable housing is that funding can no longer be collected specifically to use for affordable housing. Instead, the funding is a part of a larger pot of funds that must be allocated to parks, libraries, and childcare, among others, which may result in less money directed to the development of affordable housing. Centretown Citizens Ottawa Corporation’s (CCOC) recently completed Arlington housing benefitted from $500,000 as equity from Section 37 funds to assist in financing the project. It is unclear whether projects will continue to receive this type of funding under the new CBC system. Furthermore, because 60 per cent of the fund must be spent annually, the collection of funds may not reach a significant amount to make a difference for a housing project.
Inclusionary Zoning
Inclusionary zoning is a land-use planning tool that can require affordable housing units to be included in residential development. Bill 108 limits the tool’s scope to protected major transit station areas, locations where the municipality has adopted a development permit system, and to locations where the Minister of Municipal Affairs and Housing orders a development permit system.
Amendments to the 2017 Growth Plan enabled municipalities to delineate major transit station areas after completing detailed work according to requirements of the Planning Act. Therefore, inclusionary zoning policies will be adopted after protected major transit station areas are adopted and approved. Establishing a development permit system additionally requires detailed analysis. Before the Bill 108 changes, municipalities could determine inclusionary zoning areas based on demonstrated need through an assessment report. Limiting use of the tool to protected major transit stations and development permit system areas will likely result in delays to implementing the tool for development of affordable housing, due to the process involved with each, and its application will be limited in scope.
Development Charges
While the CBC applies to soft services, the Development Charges By-Law applies to hard services, such as: water supply services; waste water services, including sewers; storm water drainage; electrical power services, etc. These charges are applied to pay for the services that must be installed for the new residents to the area.
In the past, municipalities have sometimes waived these fees for non-profit housing. The fees are often substantial enough that they can determine the feasibility of a project, depending on the size of the project. The new changes do not specify whether municipalities can continue to waive development charges or not. Instead, the provincial amendments include a new deferral of payment policy. Non-profit housing have the option to request deferral of the development charge payment for up to 20 years from the date of planning application or building permit submission. This deferred charge may be paid back with interest at a rate chosen by the municipality.
Planning Appeal Changes
Changes have been made to the appeals process once again. The appeal test has been broadened to the “good planning” test, meaning that grounds for appeal are no longer limited to failure to conform with provincial plans or be consistent with provincial policy statements. The single hearing format and de novo hearings have also returned. A de novo system is one in which the LPAT has the authority to make a final determination approving, modifying, or refusing to approve instruments under appeal. The LPAT must have regard for a municipal council’s decision, but the LPAT stands in the shoes of council and can make any decision council could have made based on evidence provided at the hearing. The ability to cross-examine live witnesses also returns under the de novo process.
A big change to the appeals process are reduced timelines for decisions related to Official Plan amendments, Zoning By-Law amendments, and Plans of Subdivision. The shortened timelines relate to the aforementioned effort to cut red tape, but some planners have voiced concerns that the new timelines are too tight to be realistic.
Conclusions
At this point in time, some of the amendments to Bill 108 are already in force while others will apply at a later date still to be announced. Further implementation details are to be finalized by regulations. For Heritage Act matters, regulations have not yet been released, so we know little about the changes to come. Once the province has finalized these details, municipalities must still interpret the amendments and incorporate prescribed changes into their policies. The province has also proposed updates to the Provincial Policy Statement, in line with the Bill 108 amendments. Comments are open to the public until October 21.
In terms of Bill 108’s impact on affordable housing, we know that the way Section 37 funding was provided in the past could change drastically, depending on how the funds are prioritized among other community improvement areas, the inclusionary zoning tool is more narrowly scoped to transit-oriented developments, and that non-profit housing can defer development charges but we are unsure if the charges will still be waived for non-profits. It is difficult to tell at this time whether the amendments will positively or negatively effect the development of affordable housing until municipalities begin to create and/or update their by-laws in prescription with the amended Acts. Cahdco hopes to see the City of Ottawa use the CBC funds to benefit non-profit affordable housing development, use the inclusionary zoning tool to require developers to build affordable housing, and waive development charges for non-profit affordable housing to ensure that projects remain feasible.
