SmartCentres Real Estate…

SmartCentres Real Estate Investment Trust (“SmartCentres”) is one of Canada’s largest fully integrated REITs, with a best-in-class portfolio featuring 157 strategically located properties in communities across the country. SmartCentres has $9.9 billion in assets and owns over 34 million square feet of income producing value-oriented retail space with over 98% occupancy, on 3,500 acres of owned land across Canada. SmartCentres continues to focus on enhancing the lives of Canadians by planning and developing complete, connected, mixed-use communities on its existing retail properties. A publicly announced $12.1 billion intensification program ($5.5 billion at SmartCentres share) represents the REIT’s current major development focus. This intensification program consists of rental apartments, condos, seniors’ residences and hotels, to be developed under the SmartLiving banner, and retail, office, and storage facilities, to be developed under the SmartCentres banner.

SmartCentres' intensification program will produce an additional 27.3 million square feet of space; all construction commencing within the next five years, 13.3 million square feet of which is already underway. From shopping centres to city centres, SmartCentres is uniquely positioned to reshape the Canadian urban and urban-suburban landscape.

From the onset of the Royal Assent of Bill 108, More Homes, More Choice Act, on June 6th, 2019, SmartCentres has been pleased with the general provincial direction towards the goal of developing more housing in Ontario. We feel it is critical that the Province enable municipalities to enact policies that eliminate red tape and resolve ambiguity with respect to the development application process. We express the desire to work with Provincial, Regional, and Municipal Staff to advance dynamic, mixed used communities throughout our portfolio.

We have reviewed the proposed regulations pertaining to the Community Benefits Charge (CBC), as announced by the Minister of Municipal Affairs and Housing, the Honourable Steve Clark, on February 28th, 2020. As such SmartCentres is pleased to submit the following comments:

1. The overall cap of 15% is excessive in certain markets and will have a significant negative impact on the affordability of housing in the GTA. This is a result of the charge applying to the entire development (and not just from an increase in height / density) and now applies to all development across a municipality (including low-rise and mid-rise development which was not previously subject to Section 37 contributions). Furthermore, we encourage the Province to consider implementing a contribution range that would among other things, allow for the consideration of lower contributions when developments are meeting and exceeding the objectives of the relevant planning policies.

2. As the lower tier municipalities deliver the majority of the services and facilities which would be captured by this charge, the need and/or rate for the sharing of the contribution between lower and upper tier municipalities should be reviewed.

3. How will the charge interact with existing Official Plan policies which require services / facilities captured by the charge? For example, how will the charge be applied where affordable housing is required through an Inclusionary Zoning By-law in a Major Transit Station Area? Will a discount of the charge be applied to the calculation where these required services / facilities are provided?

4. Should additional direction be provided to municipalities that the provision of services / facilities by a development (where not required by policy) be automatically reduced from the charge, rather than as being discretionary (replace “may allow” with “shall allow” in the Planning Act provision 37(6)?

5. A process should be developed that allows landowners to work closely with municipalities in the allocation of funds associated with development.

6. What direction will the Province provide to municipalities to update their existing Section 37 (bonusing) policies in their Official Plans / Secondary Plans? Will a set timeframe and / or transition period be provided to update these policies, or are the policies to be considered ultra vires?

7. In order to ensure consistency amongst the municipalities in the establishment of appraisal methodologies, will the Province provide a set methodology for each municipality to follow?
a. As noted above, how will “required” services and facilities be dealt with?
b. Will the calculation be on a gross vs net basis? I.e. will roads, stormwater management facilities, natural heritage areas, private and public open space, etc. be excluded?
c. We request the province to create a standardized terms of reference for appraisals for different land typologies.
d. What is the mechanism for appeals?

8. Where a charge is being applied to a large site (i.e. over 5 ha in size), we suggest that direction be given to municipalities to provide services / facilities on these larger sites, rather than automatically being placed into a general reserve fund for spending throughout the municipality.

9. Should the Province provide direction on what classes of development should be exempted? For example, the imposition of a charge on manufacturing, warehousing / storage, resource extraction, distribution, etc. could be a disincentive to new job creation. Further it could lead to increased construction costs (i.e. a charge on aggregate resource extraction would lead to increased concrete and asphalt costs and thus increased housing costs).

10. Should existing development permissions (as-of-right) be excluded from the charge or provided a reduction in the charge?

11. Where a municipality allowed increased height and density to an established limit in their Official Plan or Zoning By-laws (i.e. in Newmarket and Oakville there are areas where heights are permitted in their policies up to X storeys through bonusing), with the introduction of a charge should the municipality be directed to modify their Official Plan or Zoning to the specified limit?

12. Should municipalities be required to establish the minimum densities in their Official Plan and Zoning By-laws where directed by the Growth Plan (i.e. Urban Growth Centres and Major Transit Station Areas) prior to or concurrently with the establishment of their CBC By-laws?

13. We believe it is critical that land valuation be calculated on the day of Zoning / Official Plan amendment approval, as opposed to the one day before building permit issuance, as stated in the proposed regulations. As you know, there is often a long time period between planning approvals and issuance of building permits, leaving purchasers to bear the majority of the costs associated with the substantial uplift in land value during this unspecified amount of time.

While we appreciate the collaborative nature of the consultation and the work completed to date by the Province, we feel that the process and the ultimate results have room for refinement to bring into force the original intent of Bill 108 and the corresponding Community Benefits Charge regulations set forth by the Province. We would therefore be pleased to meet with Provincial staff to discuss our above questions and concerns. We appreciate the work you are doing to drive the construction of more and better housing for the people of Ontario and look forward to working together.

Thank you.