Province should share financial burden to build affordable housing now, advocates say
While Toronto waits for provincial rules to force developers to build affordable housing, tens of thousands of applications are already in progress

thestar.com
May 18, 2016
By Jennifer Pagliaro

Housing advocates in Canada’s largest city say the cost to implement mandatory affordable housing should not be the city’s burden alone.

And while Toronto waits for specific rules to dictate inclusionary zoning, tens of thousands of units are already in the midst of the approval process without any consistent way for planners to ensure at least some of those homes are affordable to rent or buy.

While Premier Kathleen Wynne’s government has tabled new legislation to give cities that power, specific regulations that will outline responsibilities for cities, including for the city to provide incentives - what may include deferring development charges or property taxes - have yet to be decided.

Councillor Ana Bailao, the city’s housing advocate, said they are ready to work with the province to create rules that balance all interests, including “how the province, city and industry will cost share the implementation of such a program.”

“We want to ensure that we get affordable housing while maintaining the affordability of housing,” Bailao said in a statement.

“We will work to implement inclusionary zoning as soon as possible - but not at the expense of not getting it right . . . We need real results where everyone is working together to build a better and more inclusive city.”

The proposed legislation would also restrict provincial powers the city already has to charge developers for what are called Section 37 funds - typically cash contributions in exchange for building beyond prescribed height and density.

That money is used for community benefits, including to build libraries or child care centres. Last year alone, the city secured approximately $76 million in Section 37 funds, according to city spokesperson Bruce Hawkins.

“While the proposed legislation would restrict the use of Section 37 if inclusionary zoning is in effect, the proposed legislation would also permit the minister to enable the combined use of these tools in certain circumstances, which would be set out in regulation,” said Mark Cripps, a spokesperson for the Ministry of Municipal Affairs and Housing, in an email.

With consultations expected through the summer, the province has yet to outline how inclusionary zoning would be enforced - what number of units a development must have to trigger mandatory affordable housing or the per cent of units that must be made affordable. The province is also considering whether rules should be consistent province-wide or whether cities should be able to set their own standards.

The province’s position is that developers would not be able to provide cash-in-lieu of affordable units or build units off-site, something Bailao said the city will be looking for some flexibility on. She said there must be a “balance” to affordability to prevent situations such as rental costs being lower than condo fees in some buildings.

The province’s legislation overrides two private member’s bills on inclusionary zoning that are currently before the legislature and years of previous attempts at changing the rules. Toronto council has long called on the province to force developers to build affordable homes.

Unlike other cities, Toronto already has rules under the City of Toronto Act to impose conditions on the zoning for buildings - essentially allowing for inclusionary zoning. But without provincial regulations to spell out those conditions, the city has been unable to act.

Councillor Mike Layton, a downtown councillor who has pushed for inclusionary zoning, said the province could pass regulations now that would allow Toronto to implement inclusionary zoning immediately. While legislation is continuously debated and reintroduced, he said, thousands of applications are being processed without affordable housing restrictions.

In the last six months, the city has received development applications across the city representing more than 24,000 new units - many in multi-storey condominium proposals in Toronto and East York - according to a Star review of applications posted to the city’s website.

“Any application that comes in every day is missing this opportunity,” Layton said. “How much longer are we going to wait?”

If passed, one crucial part of the proposed legislation, several have noted, is that the construction of mandatory affordable housing could not be appealed at the Ontario Municipal Board.

Today, developers can fight development charges and other by-law decisions, including height and density restrictions imposed by the city, at the provincially-legislated OMB - what some on council have argued is handcuffing the city’s control over reasonable growth and leaving ballooning neighbourhoods without needed amenities.

Responding to the legislation Wednesday, the Ontario Home Builders’ Association said they are “concerned” developers would have no power to appeal.

“This legislation provides municipalities with powers that will limit the productive dialogue between the private sector and existing residents with municipal council,” said a statement from CEO Joe Vaccaro. “This could create a very toxic environment when a municipality determines where to impose these new units.”

The statement said the association is happy, however, about waiving requirements for developers to pay Section 37 funds that benefit communities.

The possibility of additional costs for cities to pay for those community needs, including growing transit plans, expected to be further detailed next month, comes at the same time council is being told they have a revenue problem.

This week, a report from city manager Peter Wallace outlined the failing health of the city’s finances, including nearly $29 billon worth of approved capital projects that are completely unfunded over the next 15 years.