As a Toronto-based…

As a Toronto-based researcher active in a number of affordable housing advocacy networks, I’m all too familiar with the mounting affordability challenges facing a significant and growing portion of Toronto’s residents. I write to you from the depths of a housing crisis in which, paradoxically, new housing units are approved and completed at an increasing and unprecedented pace, while the numbers of units affordable to low and moderate income residents are rapidly dwindling. I write to you from a city whose child care services have long ranked among the least affordable in the country. I write to you as the skyrocketing costs of acquiring parkland has made providing Toronto's rapidly growing population with green sanctuary a formidable challenge.

Faced with these challenges, I am glad to see the Province initiating reforms to the Planning Act and Development Charges Act. I believe that intelligent reforms to these Acts could provide developers, municipalities, and Ontario’s existing and future residents with a more predictable growth-related revenue stream, and with certainty that their growing needs for services will be served. My submission builds on the Province’s proposals, offering a framework I believe will help advance the Province’s goal of creating an Ontario in which more people are provided with opportunities to afford housing in complete, vibrant communities, close to their work.

I am deeply concerned that, as currently proposed, the Community Benefits Authority would significantly reduce the capacity of municipalities to achieve these goals — undermining their ability to pay for acquiring parkland, subsidized housing, and childcare facilities.

The City of Toronto’s submission to the Province includes a study of a broad cross-section of developments approved over the past four years. They conclude that the revenue that would be collected through Community Benefits Charges, and allocated to eligible services (notably: parkland acquisition, subsidized housing, and child care) would be significantly less than the revenue that had been collected and allocated to these services historically through development charges, parkland dedication, and Section 37. Even if Toronto was able to charge the proposed maximum rate for each of these sites — 15% of the site’s value, appraised the day before the building permit is issued — the overall revenue for these services would be reduced by 25-30%.

I urge the Province to abolish this prescriptive cap (15% of the site's value), and give municipalities the flexibility to establish an area-specific, standardized percentage of site value, as part of their Community Benefits Strategy.

Why require municipalities to periodically prepare a Community Benefits Strategy — painstakingly calculating the amount of revenue necessary to provide these services — only to arbitrarily insert a prohibitively low ceiling? As with the periodic Development Charges bylaw reviews, the Province should empower municipalities to establish their own, standardized percentages of site-value to be recovered, in consultation with the development industry and other community representatives, as part of a periodic, evidence-based, municipally-facilitated process. And as with the periodic reviews of Inclusionary Zoning bylaws recently mandated by the Province, this process could be strengthened by requiring area-specific feasibility studies. Ontario was built on these tried and trued, municipally facilitated, consultative processes. Such a process will surely result in a great deal more certainty and buy in from all actors involved than an arbitrary Province-wide ceiling on recoverable costs, unilaterally imposed in advance of all area-specific studies and consultations.

Furthermore, I fear that unless the Province removes this recklessly low cap, the predicted 25-30% reductions in revenue would have a devastating effect on already strained and underdeveloped services. It would also pose a massive blow to the municipalities’ fiscal sustainability, forcing them to make an array of cruel and self-destructive decisions.

In Toronto alone, the revenue streams the Province is proposing to abolish are currently being relied on to recover between $952 million and $1.45 billion over the coming decade. These include:

• $479 million in ineligible development charges: In its 2019-2028 Capital Budget, Toronto budgeted that $479 million of the capital costs of subsidized housing ($349M), shelter ($53M), childcare ($53M), and Development-related studies ($31M), would be eligible for recovery through DC’s. Should the Province’s proposal be legislated, almost half a billion dollars in DC’s would suddenly be rendered ineligible for recovery. That’s about 10% of the total costs currently eligible for recovery through DC’s over the coming decade.

• $369 million in Parkland Acquisition revenues abolished: In its 2019-2028 Capital Budget, Toronto budgeted that $369 million of the costs of acquiring parkland would be eligible for recovery through charges to developers under Section 41 and Section 51. Should this proposal be legislated, this entire amount will suddenly be rendered ineligible for recovery.

• $200 million to $600 million to be secured through Section 37 abolished: In its 2019-2028 Capital Budget, Toronto budgeted that $104 million in capital costs would be eligible for recovery through charges to developers under Section 37. But this is likely a very conservative estimate, seeing as the city has cumulatively secured $92 million over the course of 2016, 2017, and 2018 alone. Indeed, if this rate was maintained over the coming decade, Toronto could expect to recover $300 million in capital costs. Not included in this estimate is the value of in-kind services secured through Section 37, which have never been comprehensively calculated, but are frequently estimated as at least half the total value secured through Section 37. This could leave the total value of Section 37 over the coming decade at well over half a billion dollars, all of which would rendered ineligible for recovery should the Province’s legislate this proposal.

In conclusion, I want to remind the Province of the assurances provided to municipalities by Minister Clark in his June 7, 2019 Letter to Council. He explained that in rolling together existing revenue streams into a new Community Benefits Authority, he had two clear goals:

(1) To create more certainty for developers, municipalities, and residents as to how much developments would be charged to fund growth-related services.

(2) To ensure that municipal revenues historically collected from development charges, parkland dedication including the alternative rate, and density bonusing are maintained.

I remain deeply concerned that contrary to these assurances, the Province’s proposal to impose a cap on costs recoverable through the Community Benefits Authority would create:

(1) short-term certainty that developers would be charged less, and that municipal revenues would be drastically reduced in comparison to the amount historically collected through development charges, parkland dedication including the alternative rate, and density bonusing.

(2) long-term uncertainty to municipalities, developers, and existing and future residents that historic service levels and social and economic well being would be sustained at the rate enjoyed today.

I urge you to empower municipalities to establish their own area-specific Community Benefits Strategy, which will determine appropriate, workable, standardized percentages of appraised site value, to be recovered from new developments to pay the full growth-related capital costs of all services eligible to be recovered through Community Benefits Charges.

Unless this change is made, I assure you the Community Benefits Strategy will become little more than a perennially frustrating exercise in calculating the mounting gap between residents’ needs and the growth-related revenue available to provide for them.