This proposed change to the…

This proposed change to the DC Act is important as it will determine what type of residential units will be exempt from Development Charges to be paid at the time of building permit issuance. Previously, the province was proposing to only consider "average market rent" or "average purchase price" to determine "affordable." The newly proposed definition is a better approach because it relies on household income, which is an option that is in line with current policies of the Provincial Policy Statement. From an ownership housing perspective, the proposed definition is what most municipalities in Ontario have been relying upon for many years. However, with respect to rental housing, the definition - while laudable - may still be too challenging to achieve, especially in communities where there is very little rental housing. The proposed definition speaks to a rent at or below 30% of the household income of RENTER households within the 60th percentile. Typically, renter households are those at or below the 40th percentile in household income overall, and in many cases, they are likely paying 50% or more of their income on rent. Consequently, a new rental housing development would need to ask for rents much lower than the current average market rent, which unfortunately, even with the DC exemption may still not be viable to build. Unfortunately, with such a low threshold, this exemption would not be applicable to most or all new rental housing development - meaning the objective of incentivizing new rental housing will not be met. In municipalities where the proportion of rental housing is very low, it is important to increase the supply of rental housing overall to make rental housing available to more households and temper rental prices through competition.

As such, the definition needs to be more flexible to account for different conditions around the province, especially as it relates to rental housing. The current PPS provides a municipality the discretion to use either an income base or market base to determine renter and ownership housing affordability. Perhaps the legislation could direct that municipalities apply that same discretion within their DC by-law? In other words, the legislation should more closely align with the definition of affordable in the Provincial Policy Statement, 2020 and give authority for municipalities to choose whether an income or market base should be used.