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Inclusionary zoning - Questions remain

July 13, 2016
By Geordie Gordon

While it may be too early to assess the impact the province’s inclusionary zoning legislation will have on the provision of affordable housing, the draft legislation suggests the province is taking a hands on approach.

Bill 204, Promoting Affordable Housing Act, 2016, which received its first reading May 18, incorporates changes to six acts, including the Planning Act and the Development Charges Act.
Borden Ladner Gervais associate Isaac Tang told NRU that it is clear that the province is wants inclusionary zoning to be a distinct category in municipal official plans, separate from other goals, policies and objectives.

“It’s almost a stand-alone section ... there can’t be appeals to any of the policies or zoning by-laws, except by the minister; that’s very unique to inclusionary zoning,” he said. “The province ... is saying ‘this is really important to us, and so we’re going to provide more direction and more regulation as to where we want to see this planning issue being addressed by municipalities.”
Among the most significant changes set out in the bill is the requirement for prescribed municipalities-yet to be identified by regulation-to amend their official plans to include policies that permit inclusionary zoning and zoning by-laws that put those policies into effect.

Tang said that it is likely that Toronto will be on the list of municipalities required to adopt official plan policies to permit inclusionary zoning.

“Given the city’s support for [and] repeated asks for inclusionary zoning policies ... I wouldn’t be surprised if the City of Toronto is one of them, but the other ones are still to come.”

Tang speculated that other municipalities might be included on the prescribed list based on an affordability index that takes into account areas where the housing prices have risen far faster than median income.

“I think that’s the whole purpose behind this framework, how can [the government] start to regulate housing affordability in areas where the market itself can’t control those forces,” he said.

Wellesley Institute housing researcher Greg Suttor says that the legislation is a positive step forward, but it is not a “golden bullet.” It won’t provide much low-income housing. For example, it won’t result in accommodation for those at the low end of the income spectrum, such as tenants who can only afford $500 per month.

“It’s not a substitute for housing that is targeted to low incomes, but it will tend to push in the direction of [a] wider range of price and income in housing development. The housing development system in Ontario, and the Toronto area, is by and large affordable to the upper-income half of society, so we need to do a bit better than that,” he told NRU.

Suttor says that there are still a number of question marks concerning the legislation, and there are a few aspects of the bill that could reduce its impact. For example, the bill does not allow a municipality to apply both inclusionary zoning provisions and section 37 benefits, inclusionary housing cannot be provided off -site, and a municipality cannot receive cash-in-lieu for inclusionary housing.

“I don’t think that these three provisions are very well advised,” he said.

The average councillor is not keen on prioritizing housing above other community needs, such as a day care or park improvement, and setting up an either-or decision between housing and section 37 might not help the housing cause, Suttor says. He suggested the province would be better advised to permit some combination of the two, while still meeting the financial realities of the development proposal. Suttor did point out that there is a provision in the bill where the minister can prescribe exceptions, and speculated that further direction could be set out in the regulations.

The inability of municipalities to negotiate housing off -site, or through cash-in-lieu, would likely have an impact on smaller sites, Suttor said. If the number of units that are secured on site is too low, it could create administrative issues for managing the units, by a non-profit, for example.

“It may actually be more effective, if you have over a period of a year or two a dozen of those little projects, if you aggregate the money involved and you do one good affordable ownership project,” he said.

The deadline to submit comments on Bill 204 is August 16. The province has released the Inclusionary Zoning Consultation Discussion Guide, which among other things lists the matters the province intends to address by regulation.