Jan 2, 2018
A Stocking Stuffer from the Ministry of Housing - Inclusionary Zoning - Proposed Regulatory Content
On December 18, 2017 the Government of Ontario posted a summary of proposed regulations under the Planning Act relating to Inclusionary Zoning. The Province is inviting commentary, which is due as of February 1, 2018. We have provided a link to the proposed changes below. This Blog provides a brief summary and commentary on the proposal.
The proposed regulations give us some new insight into the parameters we can expect from Inclusionary Zoning (IZ). The Provincial rules will set a base line standard, but there is a considerable amount of latitude left to municipalities. In particular:
- IZ will relate to ownership housing. Purpose built rental is exempt. Non profit housing providers are also exempt. Any development for which an application for building permit, development permit, community planning permit or site plan approval was made before the operative by-law came into effect.
- IZ would apply to all developments or redevelopments containing 20 or more residential units, though the final determination will be left to the municipalities;
- The range of income to which IZ would provide housing is left to the municipalities;
- The unit set aside could not exceed 5% of the units, or 5% of gross floor area, those numbers rising to 10% in a high density transit station area identified in a municipal Official Plan;
- Units to remain affordable for at least 20 years. In this case, what that means is that if the owner sells in the affordability period, any uptick is shared with the municipality on a set basis as set out in the municipal by-law. For the following 10 years, the split is specifically established in the Regulation. This is to discourage flipping.
- The regulation proposes different rules for Measures and Incentives depending on whether the Community Planning Permit System is in place. If not, then the municipality pays a financial contribution equal to 40% of the difference between market price of a unit and the "affordable price" of a unit to be determined by a municipal by-law. This amount might be paid through Development Charge exemptions, reductions in parking requirements and other planning tools.
Developers like certainty and this first consultation document is unlikely to satisfy. It leaves a good deal to be determined locally. While that's a good thing in my view (what's important to Toronto, may not be so much in Ottawa, and totally irrelevant in Trenton), it means key pieces of the equation remain missing. We will have to wait for the municipalities to chime in to understand, for example, how they will calculate the affordable price, and therefore what the extent of the municipal contribution is likely to be.
It was a surprise to see no reference to cash-in-lieu of providing affordability. I had predicted that there would be such an option eventually and that it would be placed at the option of the municipality. (For any provincial official reading this, I know you have said that there would be no cash-in-lieu all along. So, not your fault). The idea being to give municipalities a means of building an affordable housing war chest that they could apply to municipal priorities. Under the plan set out, the only avenue to build without IZ is off site replacement in proximity. Of note, there does not seem to be any restriction on who actually delivers the units, leaving open the possibility of some trading among developers and not for profit housing providers to deliver IZ requirements in a nearby site. The proposed regulation prohibits any site having more than 50% IZ units – presumably to prevent simply pushing all local IZ units onto one site. In any event, there is some room for creativity in these rules.
Finally, there is still a lot of wood to chop before we see an actual by-law. However, developers in the development stages of 20 unit plus developments must be alive to these proposed changes. If the by-law passes before you submit your site plan application, you are in the new world of IZ.
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