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City of Toronto releases draft Inclusionary Zoning policies and by-laws

Sep 23, 2020

At its meeting on 22 September 2020, the City of Toronto Planning and Housing Committee considered a report on the draft Official Plan (“OPA”) and Zoning By-law Amendments (“ZBA”) to implement Inclusionary Zoning. The report recommends that the draft OPA and ZBA attached to the report be endorsed as a basis for public and stakeholder consultation. This report will be considered by City Council on 30 September 2020. The statutory public meeting and a final report to Committee is proposed to occur in the first half of 2021.

Inclusionary zoning is a land use planning tool that enables municipalities to require new developments to include affordable housing in specific areas of the municipality. It was first introduced in 2018 through amendments to the Planning Act and Ontario Regulation 232/18.

The Inclusionary Zoning policy requirements will be implemented in Strong and Moderate Market Areas (identified on Map 37 of Attachment 1of the OPA), and are limited to Protected Major Transit Station Areas (“PMTSA”) or areas where a Development Permit System by-law is in place. PMTSAs, a subset of the 180 potential Major Transit Station Areas (“MTSA”) in the City, will be delineated before the current Municipal Comprehensive Review is concluded. The Inclusionary Zoning policies will not come into effect until after the MTSA work is completed in 2022.

If approved, these policies will require that 3-10% of the total residential gross floor area of a development be set aside for affordable housing:

  • For developments in Strong Market Areas, condominium developments will be required to set aside 10% of the total residential gross floor area, and purpose-built rental developments will be required to set aside 5% of the total residential gross floor area;
  • For developments in Moderate Market Areas, condominium developments will be required to set aside 5% of the total residential gross floor area, and purpose-built rental developments will be required to set aside 3% of the total residential gross floor area.

The recommendations from Planning and Housing Committee directs staff to conduct further analysis on options to increase these percentages to 10-30% for new condominium developments and 5-20% for new purpose-built rental developments.

The affordable housing will be secured for 99 years and will require a legal agreement be registered on title. Offsite units may be substituted at the discretion of the City, and financial incentives will only be given if the development proposes to exceed the Inclusionary Zoning requirements.

The policies include the following exemptions:

  • Development with less than 100 residential units and less than 8,000 square metres of residential gross floor area located within the City’s downtown or central waterfront areas;
  • Developments with less than 140 residential units and less than 10,000 square metres of residential gross floor area in all other areas of the City where Inclusionary Zoning will apply;
  • Residential care homes;
  • Institutional student residences; and
  • Development specified in the provincial regulation, such as non-profit developments.

The proposed ZBA includes transition provisions which exempt complete applications for a zoning by-law amendment, minor variance, or site plan approval and building permit applications filed on or before 1 January 2022 from needing to comply with inclusionary zoning.

Of note, the financial and housing data that was used to inform these draft policies were obtained before COVID-19, and data that analyzes how COVID-19 has impacted housing and finances has not yet been considered.

Affordable and Mid-Range Rent Definitions

At the same Planning and Housing Committee meeting on 22 September 2020, staff released a separate report and proposed Official Plan Amendment to change the definition of affordable housing to calculate rental affordability based on a set income percentile paying no more than 30% of income towards shelter costs, inclusive of utilities. This would shift the focus of the definition to household incomes from average market rent, which the current definition uses.  The OPA also proposes to change the definition of mid-range rent, as well as affordable ownership. These definitions are intended to be used to identify eligible incomes and maximum rents as part of the proposed Inclusionary Zoning policies.

The proposed Inclusionary Zoning Draft Official Plan Amendment and Zoning By-law Amendment and the Proposed Official Plan Amendment to the City’s Affordable and Mid-Range Rent Definitions are available at the links above.

Author(s): Monica Poremba

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