The proposed inclusionary…

The proposed inclusionary zoning content is outlined below, including staff’s comments.

1.1 Municipal Assessment Report

Any municipality interested in implementing inclusionary zoning requirements would be required to prepare a municipal assessment report prior to adopting official plan policies authorizing inclusionary zoning. The report would be required to contain certain information including information relating to current and projected trends for housing needs (e.g. municipal demographics and population, anticipated household characteristics and household income, and housing affordability analysis). The report would also be required to contain information relating to an analysis of the average market price for each proposed unit type that may be required to be provided as affordable housing units. An updated assessment report would be required every five years.

Staff Comment:

Staff have concerns surrounding the level of effort to implement inclusionary zoning due to resourcing. Some of the sought after information will be challenging to provide because it is currently not tracked (e.g. information for different geographic areas within the municipality).

1.2 Prescribed Official Plan Policies

A municipality would be required to adopt Official Plan policies authorizing inclusionary zoning and they would be required to: ● provide that implementing zoning by-laws could only apply to developments or redevelopments that propose 20 or more residential units; ● identify areas in the municipality that may be appropriate for inclusionary zoning by-laws; ● identify the range of household incomes that would be eligible for affordable housing units; and ● identify an approach to setting an average market price for each proposed unit type that may be required to be provided as affordable housing units in an inclusionary zoning by-law (the average market price could vary across different areas within the municipality and would have to be updated annually).

Staff Comment:

Staff support the Province enabling municipalities with inclusionary zoning abilities rather than prescribing them. Staff also support local municipalities being able to determine areas that are appropriate for inclusionary zoning and the approach to setting an average market price for each proposed unit type. The City of Waterloo’s population includes tens of thousands of post-secondary students and other foreign/temporary residents which results in a complex housing market, therefore, a one-size fits all approach would not be appropriate. Setting a varying average market price based on different areas within a municipality may be challenging because the information may not currently be tracked.

1.3 Provisions Required in Inclusionary Zoning By-laws

Zoning by-laws giving effect to inclusionary zoning Official Plan policies would be required to include provisions regarding the following matters:

a) Unit Set Aside

The total number of affordable housing units or the total gross floor area proposed to be occupied by the affordable housing units that could be required: i. would not exceed 5% of the total units or 5% of the total gross floor area of a proposed development or redevelopment to which the by-law applies; or ii. if a development or redevelopment is proposed to be located in a high density transit-station area identified in an official plan, would not exceed 10% of the total units or 10% of the total gross floor area of a proposed development or redevelopment to which the by-law applies.

Staff Comment:

Staff believe the unit set asides are quite low. For example, in a 20 unit building this will only result in one (1) required affordable housing unit (with a 5% unit set aside) or two (2) required affordable housing units (with a 10% unit set aside). The Province should consider setting the 5% and 10% unit set asides as minimums and then let municipalities decide if they wish to use higher ones.

b) Affordability Period

Each affordable housing unit in a proposed development or redevelopment would be required to be maintained as affordable for a period of no less than 20 years and no greater than 30 years from the date of its first occupancy (affordability period). Further, there would be a phase-out period for no greater than 10 years following the affordability period specified above, where each affordable housing unit would be maintained as affordable solely in respect of the proposed price and sale provisions set out in the proposed regulation.

Staff Comment:

Many households would likely move before the 20-30 year affordability period and this would be cumbersome and challenging for a municipality to monitor for that long of a period. A 10 year phase-out period would add to the administrative burden.

c) Measures and Incentives

The proposed regulation would require a municipality to pay a financial contribution to the development or redevelopment that an inclusionary zoning by-law applies to (municipalities with a Community Planning Permit System would not be required to provide any measures or incentives). The proposed formula would require a municipality to pay 40% of the difference between the total sum of the average market price for all of the required affordable housing units and the total sum of the affordable price for all of the required affordable housing units.

Such financial contribution could be satisfied through one or more of the following:

● a waiver or reduction in planning application fees in respect of a development or redevelopment including fees associated with Official Plan amendments, Zoning By-law amendments, Site Plan Control applications, and Plan of Subdivision approvals; ● a reduction in parking requirements for the proposed development or redevelopment; ● an exemption from the requirement for payment of all or part of the parkland cash-in-lieu applicable to the development or redevelopment; and ● an exemption from all or part of the development charges that may be applied to the development or redevelopment. It is important to note that a municipality’s financial contribution could not be satisfied through an increase in height or density for the proposed development or redevelopment.

Staff Comment:

Staff agree that municipalities have a role to play in incentivizing inclusionary zoning units, however, staff are concerned about what the 40% financial contribution might equate to and whether the proposed measures/incentives would be sufficient for municipalities to cover the required contribution. The proposed regulation would be more effective if bonusing were a permissible incentive. If the Province keeps this regulation there should be an onus on the Province and upper-tier municipalities to participate and contribute (e.g. development charge exemptions) and the regulation should recognize this. The regulation should also be amended to allow for building permit fee reductions/exemptions to be included as part of the municipal incentives.

The proposed regulations exempt municipalities with a Community Planning Permit System from providing any measures or incentives. Implementing a Community Planning Permit System solely for the purposes of affordable housing to avoid financial measures and incentives would be cumbersome and may make municipalities hesitant about implementing inclusionary zoning, particularly when municipalities currently have the ability to get affordable housing or monies through density bonusing.

Regarding the reduced parking requirements incentive, staff note that many transit station areas have or will have reduced parking rates. Staff also question who will determine the value of the parking? The regulations should clarify this.

Providing incentives solely for affordable ownership housing units is problematic when there is a demonstrated need in our community for affordable rental housing units. The regulations may push some municipalities to focus their limited opportunities for incentivizing affordable housing to rental units outside of inclusionary zoning.

d) Price

The proposed regulation contains provisions surrounding the sale price of an affordable housing unit as follows: i. during the affordability period (i.e. no less than 20 years and no greater than 30 years), the price of an affordable housing unit at which the unit may be sold would be determined by the by-law; and ii. for the phase-out period (i.e. for a period of no greater than 10 years following the affordability period), the sale price of an affordable housing unit would be at market rate.

Staff Comment:

According to the proposed regulation, an owner would have the ability to sell their housing unit(s) but within the affordability period it would have to be sold at the affordable price. Staff are supportive of this approach to have the unit maintained as affordable. However, during the phase-out period the sale price would be at market rate and a person could decide to sell in the first of a potential 10 year phase-out period.

1.4 Inclusionary Zoning Agreements – Share of Proceeds Related to Equity

An agreement would be required between a municipality and an owner of a development or redevelopment outlining how the proceeds related to the equity of an affordable housing unit would be shared from the sale of an affordable housing unit during the affordability period as well as during the phase-out period. Further, the proposed regulatory content sets out the percentage share that would be paid to a municipality and the owner from the first sale within the 10 year phase-out period, with the percentage paid to the municipality decreasing according to the number of years of ownership. After the first sale, the equity share would no longer apply.

Staff Comment:

Equity sharing will increase the administrative burden on municipalities. Staff also

question how households would be selected to live in inclusionary zoning units, would it

be based on household income limits or some other requirement(s)? The regulations should clarify this.

1.5 Reporting By Council of a Municipality

A report documenting the status of the affordable housing units would be required every two (2) years from the date of passing of the first inclusionary zoning by-law and such report would be required to include the following information: ● the number of affordable housing units secured in relation to the income of the households; ● the types of affordable housing units secured (e.g., studio, 1-bedroom, 2-bedroom); ● the location of the units;

● the number of affordable units that returned to market units; and

● the total amount of the share of proceeds related to equity received by the municipality from the sale of affordable housing units.

Staff Comment:

Staff recognize the importance of tracking the effectiveness of an initiative, however this reporting requirement will add to the administrative burden on municipalities.

1.6 Restrictions on Off-site Units

The authority to permit the inclusionary zoning units off-site would be subject to the following restrictions: ● the offsite units must be located in proximity to the development from which the units are being transferred; ● the land on which the offsite units would be situated must be zoned for inclusionary zoning unless the development or redevelopment is proposed by a non-profit housing provider; ● the offsite units shall be ready for occupancy no later than 36 months after the transfer of the affordable units from the proposed principal development; ● the offsite units cannot count towards the satisfaction of any inclusionary zoning requirements to which the offsite development would otherwise be subject; and ● no more than 50% of the units in the offsite development may be inclusionary zoning units.

Staff Comment:

The 50% maximum appears quite large, however, staff recognize that this is a maximum and that a municipality could use a smaller percentage. The regulations need to provide municipalities with strong tools to ensure off-site units are delivered and a penalty regime to support their delivery.

1.7 Restriction on Use of s.37 (Height and Density Bonusing)

The affordable housing units or the gross floor area proposed to be occupied by the required affordable housing could not be used to determine community benefits under s. 37 of the Planning Act.

Staff Comment:

Municipalities should be permitted to use s.37 as a contribution.

1.8 Exempted Developments or Redevelopments

Developments or redevelopments would be exempted from the application of an inclusionary zoning by-law where: ● they are proposed to be built for the purposes of residential rental units; ● an application was made under the Planning Act by a non-profit housing provider; ● an application for a building permit or site plan approval for a development or redevelopment was made before the day that an inclusionary zoning by-law was passed; and ● applications for approval of an official plan amendment, a zoning by-law amendment, and either a site plan, a plan of subdivision, or a description under s. 9 of the Condominium Act, 1998 were accepted by a municipality before the day that an official plan policy authorizing inclusionary zoning was adopted by council.

Staff Comment:

Staff question why the proposed regulation only applies to affordable housing ownership units and not rental units. This is an important missing element from the proposed regulatory content. Affordable rental housing is a greater need in our community.

Staff also note that there are no proposed regulations that directly address condominium conversions from rental buildings. Any proposed inclusionary zoning regulations should apply to condominium conversions regardless of when the conversion occurs.

Staff agree with the grandfathering of applications however there should be a time limit that is imposed as to when the application(s) must receive approval, for example one year.

[Original Comment ID: 212317]