The City of Kitchener’s…

The City of Kitchener’s submission addresses three components of the ERO Posting with respect to how MZOs should be used as a planning instrument; the application of MZOs on the site plan review process and the implications of MZOs as a tool to implement Inclusionary Zoning (IZ).

MZO as a Planning Instrument

MZOs have the ability to provide important benefits to local communities and advance strategic priorities. However, to ensure this is a beneficial approach, there must be municipal support and involvement to make sure developments represent good planning and work with existing municipal processes. Municipal collaboration should underlie the use of MZOs, whether it is for affordable housing, economic development or other key areas of provincial interest.

City of Kitchener Recommendation:

MZOs should be used in extremely limited circumstances for projects under urgent timelines and that have high-level strategic importance and address key matters of Provincial interest (e.g. affordable housing projects where funding is contingent upon a construction start deadline or accommodating major employers with tight deadlines). In staff’s opinion, most residential, commercial or industrial proposals, including the subjects of many recent MZOs do not rise to this level of strategic importance. The City of Kitchener builds community through collaboration and effective communication. MZOs, unless properly scoped, will have a negative impact on the relationships that local government has been building with citizens of the community. The use of MZOs has been too common in recent years and has the potential to undermine the role of councils in planning decisions.

MMAH should consider setting quantitative criteria or thresholds for the use of MZOs, for example, the number and quality of jobs, the number of affordable units or level of affordability. These criteria should be robust, but flexible and reflect the diversity and varied sizes and needs of communities across Ontario. Kitchener is a progressive municipality that supports new development and works collaboratively with development industry partners to advance our shared city-building objectives. MZOs should only be undertaken at the request of Council.

Municipal staff should be heavily involved in the development of MZOs and the precise wording of planning instruments to ensure it aligns with the details of zoning by-laws and other local circumstances to ensure decisions can be implemented effectively and without delay.

Site Plan Review
Site plan review is a complex multidisciplinary exercise that requires detailed knowledge of matters such as urban design, servicing, engineering, site function, environmental planning and stormwater management as well as legal and financial processes. The City has specific criteria (e.g. stormwater management) that are location-specific that may not be known to provincial staff.

Given the high-level policy mandate of the Ministry, it is staff’s opinion that provincial staff do not have the detailed local knowledge required to address all of the complex and nuanced decisions that are required to manage these intricacies. Because only applicants have the right of appeal to LPAT, Ministerial site plan involvement is unlikely to reduce appeals-related delays. In this way, any accelerated approvals by the Minister could only be at the expense of fulsome site plan review.

The City has developed standard site plan agreement conditions that reflect our Corporate structure, two-tiered approval of Regional and City (and external) conditions, Letter of Credits that are acceptable to the City, etc. Deviation from these standard agreements would likely lead to implementation challenges and delay. At minimum, municipalities should prepare development agreements, their conditions and final wording.
City of Kitchener Recommendation:
The City recommends that the minister’s site plan approval power be repealed. It is our interpretation and expectation that the recent Planning Act amendments allow the Minster to provide binding direction to the municipality, and that the municipality continues to be the approval authority and implementing agency, however this is not entirely clear to us. If the government decides to retain the site plan approval power, the Minister should provide tightly-scoped direction on key matters to be implemented by the municipality – the Minister should not be the site plan approval authority. Key directions should be developed in consultation with the municipality and applicants and supported by impartial subject matter expertise. The Ministry could be consulted to decide points of disagreement between the applicant and municipalities. This would be similar to the current ability to seek supplemental direction from LPAT.

Inclusionary Zoning

Although Kitchener and many other municipalities are still studying inclusionary zoning, it has yet to be implemented anywhere in Ontario. Accordingly, we are not able to give detailed advice on how this tool should be used, however, there are several issues to be considered in implementing IZ. Any approval authority should consult with affected parties regarding the site or area specific impact on the viability of development when applying IZ requirements; and the specific housing needs in the community when determining the set aside rate (percentage of affordable units), type of units (e.g. bachelors vs two-bedrooms), tenure, level of affordability and period of affordability.

There are a broad range of program considerations that must be developed to support the success of IZ units long term, including:
• managing the sale and net proceeds of the sale of affordable ownership units;
• if off-site units are allowed in lieu of on-site units, and under what criteria;
• standards for affordable units regarding size, location, quality etc;
• who will be responsible for ongoing operation and maintenance of the affordable units (e.g. developer, lower tier municipality, service manager, non-profit.) and how ongoing administrative costs will be covered;
• eligibility requirements for occupants and any ‘move out’ requirements if occupant incomes increase or housing needs change, and who makes and enforces these decisions;
• rent increase policies (according to the provincial rent guideline or some other way); and
• drafting and executing all the implementing agreements. Parties could include the landowner, developer, municipality or province and should reflect the ongoing responsibility for the affordable units.

City of Kitchener Recommendation:

Staff are supportive of implementing IZ through an MZO. On October 5, 2020 Kitchener Council asked the Province to allow IZ city-wide and not be limited to Protected Major Transit Station Areas (PMTSAs). The Minister should not limit its application of IZ via MZOs to PMTSAs either. The Minister should engage with and support municipalities, service managers, developers, and non-profits in establishing policy and program frameworks if they have not been developed already. The MMAH would bring significant value to this conversation considering its considerable experience in affordable housing programs.

Thank you for your consideration of our comments. City staff are available to discuss this submission at your convenience.