Proposed regulations under the Planning Act

Consultation on the proposed approach to inclusionary zoning in Ontario took place through separate postings on the Environmental Registry:

• Environmental Policy Proposal Notice (012-7616)
• Environmental Registry Regulation Proposal Notice (012-7617)
• Environmental Registry Regulation Proposal Notice (013-1977)

In respect of Environmental Registry Regulation Proposal Notice 012-7617, public consultation on the proposal for this decision was provided for 90 days, from May 18, 2016 to August 16, 2016.

As a result of public consultation on proposed regulatory content, the ministry received a total of 85 comments through on-line submissions, written correspondence or Standing Committee submissions. Five of these were submissions made directly on the Environmental Registry.

Most of these submissions combined their comments for both the Act Proposal Notice (012-7616) and the Regulation Proposal Notice (012-7617).

You can obtain a copy of all comments from the Contact person listed in this notice.

In respect of Environmental Registry Regulation Proposal Notice 013-1977, public consultation on the proposal for this decision was provided for 45 days, from December 18, 2017 to February 1, 2018.

This consultation built upon the consultation for Regulation Proposal Notice 012-7617 and provided a proposed summary of regulatory content for a proposed inclusionary zoning regulation and proposed amendments to Ontario Regulation 173/16 under the Planning Act to permit inclusionary zoning in a community planning permit system.

As a result, the ministry received a total of 116 comments through on-line submissions or written correspondence. Thirty-seven of these were submissions made directly on the Environmental Registry.

Environmental Registry posting #012-7617

Some submissions supported:

• Inclusionary zoning as an optional tool
• Allowing municipalities to establish affordability periods, incentives, unit set asides, target households, threshold size, price and rent levels
• Municipal use of section 37 of the Planning Act with inclusionary zoning
• Allowing affordable housing units to be located offsite
• Basic requirements for administration and monitoring of affordable units
• Provincial establishment of minimum standards;
• Exempting inclusionary zoning policies and by-laws from appeal

Some submissions gave mixed views on:

• Whether inclusionary zoning should be optional or mandatory
• Use of section 37 of the Planning Act - should be restricted or not used with inclusionary zoning
• Affordability periods – some support for a minimum 20 year period while others suggest longer periods including perpetuity

Some submissions raised concerns regarding:

• Whether inclusionary zoning should take place in Ontario
• Whether inclusionary zoning should be a partnership model between the public and private sector
• Lack of clarity around funding and who administers the affordable housing units
• Applying the same inclusionary zoning rules to urban and rural areas
• The province’s definition of “affordable” with suggestions to review the Provincial Policy Statement, 2014 to include a “core needs” threshold
• The role that money in lieu of affordable housing units could play

This consultation informed the development of a summary of proposed regulatory content set out in Environmental Registry Posting 013-1977.

Environmental Registry posting #013-1977

The municipal and housing sectors along with interested individuals, expressed considerable concern with the proposed inclusionary zoning regulation, primarily in respect of the following proposals:

• The threshold of 20 units or greater was considered too high and overly prescriptive
• Maximum 5% general unit set aside and 10% set aside in high density transit areas were considered too low and represent a missed opportunity
• A 20 to 30 year affordability period - considered too short and would not address housing affordability for the next generation
• The 40% municipal contribution to offset the cost of affordable housing units was considered too high and the proposed measures that municipalities could use to satisfy the contribution were too restrictive
• Exemption of purpose-built rental units – the focus on ownership would make it too difficult for municipalities to identify and direct growth to meet their needs (ownership or rental)

In general most submissions from individuals, municipalities and the housing sector indicated that greater municipal flexibility was needed so that inclusionary zoning could be tailored to local needs and circumstances.

The development sector was generally supportive of the partnership approach and framework proposed for inclusionary zoning. However, the sector generally felt that a 50/50% split would have better ensured that the private sector market projects would remain economically viable.

The Inclusionary Zoning regulation (Ontario Regulation 232/18) includes revised provisions related to the following proposals:

• the requirements of an assessment report were expanded to include an analysis of the potential impacts on the housing market and on the financial viability of development or redevelopment in the municipality related to inclusionary zoning by-laws, and a written opinion of the analysis from a person independent of the municipality
• the requirements for official plan policies were revised and expanded to include the approach for authorizing inclusionary zoning, including:
  • Size of development (not fewer than 10) to which an inclusionary zoning by-law would apply
  • Unit set aside
  • Affordability period
  • Measures and incentives
  • How price or rent of affordable housing units would be determined
  • Approach to determining percentage of net proceeds to be distributed to a municipality
  • Circumstances for permitting units to be located offsite
  • Circumstances in which an offsite unit would be considered in proximity of the development from which the offsite unit was transferred
  • Procedure to monitor affordable housing units to ensure affordability over the municipally-specified affordability period
• The share of net proceeds that may be distributed to a municipality from the sale of an affordable housing unit was limited to 50%
• Offsite units are prohibited unless there are official plan policies setting out the municipal approach and subject to specific restrictions
• Municipal authority under s. 37 of the Act is restricted when used with inclusionary zoning
• Exemption of developments from the application of inclusionary zoning by-laws were clarified and not-for-profit housing developments were expanded to include specified developments where the not-for-profit housing provider was in a partnership with a for-profit development

The Community Planning Permits regulation (Ontario Regulation 173/16) allows all local municipalities to use the community planning permit system, and sets the minimum requirements for use of the system. It was amended under Ontario Regulation 234/18 to authorize municipal use of inclusionary zoning in community planning permit systems.