The Ontario government announced in March it would bring forward inclusionary zoning legislation giving cities the power to insist that developers add affordable housing units as a condition of new construction. At the time, Minister of Municipal Affairs and Housing Ted McMeekin didn’t have details about what the government’s legislation would do, prompting TVO.org to ask five questions about the province’s inclusionary zoning plans. Now, there are at least partial answers to those questions.
1. When will the government present actual legislation?
The government presented Bill 204, the Promoting Affordable Housing Act, for first reading on May 18. The bill makes major changes to the Planning Act, the Development Charges Act, and the Residential Tenancies Act, as well as smaller changes to other legislation.
What’s still not clear is how quickly the government will be able to get it through the legislature. The house will rise for the summer break on June 9, meaning it’s unlikely Bill 204 will be called for second reading debate before then: the government is expected to focus on passage of other bills such as the Ontario Retirement Pension Plan Act (2016) in the coming weeks. That means Bill 204 is likely to be considered in the fall, with passage possibly before the new year.
2. What will developers get to sweeten a bitter pill?
This is a major issue any time the government imposes new burdens on the homebuilding industry, and inclusionary zoning promises to be a major imposition. One potential sweetener for developers can be found in Section 10 of the bill, which would add parking minimums to the list of things the province can regulate directly, instead of local government being the sole authority. Parking minimums—where a city requires a developer to provide a number of parking spaces per unit of housing or per area of commercial space—are hugely expensive for new construction. While the costs of a new parking space can vary wildly, each additional space can add tens of thousands of dollars to construction costs. The province may control the use of parking minimums in cases where a city enacts an inclusionary zoning bylaw. That would mean a kind of trade: affordable housing units in exchange for reduced (or possibly eliminated) parking minimums.
The government may also require other concessions to builders, from property tax and development charge reductions to accelerated approvals. In particular, the province wants to forbid the use of Section 37 of the Planning Act in cases where a city uses an inclusionary zoning bylaw. Section 37 lets municipalities extract other concessions from developers, so forbidding its use in conjunction with inclusionary zoning would clarify things for builders.
3. What will city councils do?
Toronto reacted positively to news of the proposed legislation, but with caution. Councillor Ana Bailão, the city’s housing advocate, said the power to use inclusionary zoning would be a useful additional tool to address the city’s housing woes, but won’t solve the problem on its own.
“We will work to implement inclusionary zoning as soon as possible – but not at the expense of not getting it right," Bailão said in a statement.
Bailão called for a “made in Toronto” housing solution that balances the needs of various parties, including tenants and developers.
In short, while municipal councils may very well make use of new inclusionary zoning powers, there’s nothing in the proposed legislation that forces them to. Councils across the province have gotten used to the leverage the status quo gives them with things like Section 37, and may be leery to give that up, even for inclusionary zoning.
An additional wrinkle at the city level will be that much of the details will be worked out in regulations the province won’t publish until after Bill 204 becomes law, leaving local politicians unsure as to how some aspects will work in the real world.
4. Will the province forbid “poor doors”?
Yes, or at least it will try. “Poor doors” refer to the separate entrances some developers have included in other cities, forcing tenants or owners of affordable units to use a different door than people who bought units at market price. There’s a specific section in Bill 204 referring to “matters relating to exterior access,” which will require that developers clearly show the entries and exits for buildings that include affordable units in the plans they file with the city, making sure there are no surprises. McMeekin confirmed to the intent of the proposed legislation—and the regulations to come—is to control or prohibit the spread of poor doors in Ontario.
However, some housing advocates have argued that rules to protect low-income residents need to go beyond the entranceway of a new condo tower: there’s the broader issue of making sure people who own or rent affordable units have the same access to amenities such as gyms or party rooms as their wealthier neighbours.
Asked about that concern, McMeekin said “I agree with those advocates,” and said he’ll work to address them in regulations.
5. What’s Ottawa going to do?
The province made its inclusionary zoning announcement shortly before its counterparts in Ottawa unveiled the 2016 federal budget, which, as predicted, also included measures to aid housing affordability. Those included $2.3 billion over two years for provinces and First Nations to build new affordable housing and improve the energy efficiency of existing units. The budget also promised $500 million yearly towards an affordable rental housing financing initiative, in which the government would provide low-interest loans to affordable housing developers during the high-risk phase of development.
The budget also promised $15 million a year for two years to continue subsidies for federally-financed co-op housing. The operating agreements that provide federal subsidies for housing co-ops are expiring in growing numbers, leading to the potential loss of as many as 175,000 units of affordable housing across the country. The feds say the $30 million will buy time while they figure out a long-term solution.
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