Proposed Land Needs Assessment Methodology for A Place to Grow: Growth Plan for the Greater Golden Horseshoe

Proposal Details

On May 2, 2019, the government released A Place to Grow: Growth Plan for the Greater Golden Horseshoe as part of the “More Homes, More Choice: Ontario’s Housing Supply Action Plan”. The Plan, which came into effect on May 16, 2019, addresses the needs of a growing population, the diversity of the Greater Golden Horseshoe region, the people and local priorities.

Policy 2.2.1.5 of the Plan requires upper- and single-tier municipalities to use the Methodology issued by the Minister to assess the quantity of land required to accommodate forecasted growth to the horizon of this Plan. The government is consulting on a proposed new Land Needs Assessment Methodology for the Greater Golden Horseshoe.

These changes are linked to the Proposed Amendment 1 to A Place to Grow: Growth Plan for the Greater Golden Horseshoe found at ERO Number 019-1980.

Proposed Methodology

Purpose and Objectives

The proposed Methodology outlines key steps for assessing community and employment land needs to the Plan horizon year. Municipalities must follow the steps of this methodology as part of the municipal comprehensive review to ascertain the amount of land required to accommodate the amount and type of additional housing units and jobs required to meet market demands in conformity with the Plan. The methodology is also used to determine whether there is a need for a settlement area boundary expansion for employment area or community area, which is all other settlement area land outside of employment areas.

Recognizing that local needs are diverse, the proposed new Methodology aims to provide the key factors to be considered as municipalities plan to ensure that a sufficient and appropriate mix of land is available to: accommodate all housing market segments; avoid housing shortages; consider market demand; accommodate all employment types, including those that are evolving; and plan for all infrastructure services that are needed to meet complete communities objectives to the horizon of the Plan.

It will do so by presenting a simplified approach to land needs assessment that reduces the overall complexity of implementation of the Plan. The proposed Methodology will provide more flexibility to municipalities. It will also be forward-looking and account for demographics, employment trends, market demand, and concerns related to housing affordability in the Greater Golden Horseshoe.

Schedule 3 is the baseline to be used by municipalities. Lower forecasts for population, dwellings by type or employment are not permitted as this would lead to land supply issues which would lead to housing affordability issues and land shortages. Municipalities may develop alternative assumptions about growth to the horizon of the Plan if they demonstrate they can provide a range of housing to achieve market-based demand. This includes meeting the projected needs of current and future residents and providing the basis for realizing employment opportunities in labour markets of the Greater Golden Horseshoe.

Implementation and Conformity

The proposed Methodology does not preclude municipalities from considering alternate assumptions about population and employment growth to the horizon of the Plan. A municipality may test alterative growth assumptions to establish the case for a higher density target. Assumptions that include density targets lower than those required in the Plan would require Minister’s approval.

Land needs assessment is an iterative process involving dialogue between upper-tier and lower-tier municipalities, stakeholders, the public and the Province. The proposed Methodology will continue to be implemented through a new upper- or single-tier official plan or an official plan amendment that is subject to approval by the Minister of Municipal Affairs and Housing. Municipalities have the choice of phasing their municipal comprehensive review or achieving conformity as part of one single new official plan or a plan amendment.

Timeframes

Municipalities must plan to accommodate forecasted growth to the horizon of A Place to Grow. Land supply to meet the full horizon of a Place to Grow is essential to ensuring consistency with the Provincial Policy Statement (PPS). Planning authorities need to ensure an appropriate range and mix of housing options and densities are provided to meet projected requirements of current and future residents of the regional market area. This means:

• Municipalities must, at all times, have enough land with servicing capacity to provide at least a three-year supply of residential units available through lands suitably zoned in lower-tier municipalities.
• Municipalities shall also plan to maintain the ability to accommodate residential growth for a minimum of 15 years.

Testing Alternate Growth Assumptions

This methodology does not preclude municipalities from considering future economic, social and policy directions where these are known, particularly in between Censuses or mandatory reviews of A Place to Grow.

Municipalities may develop alternate growth assumptions provided the population and employment forecasts of A Place to Grow are implemented in municipal official plans. Municipalities must be able to demonstrate that assumptions utilized in their land needs assessment conform with the Plan and are justifiable in light of both general trends in the province and specific conditions in the municipality.

Components

The Methodology has various components that need to be considered when assessing local land needs. The first is the community area land needs assessment used for housing, population-related jobs and office jobs. The second is the employment area land need assessment for all various types of employment.

Community Area Land Needs Assessment

The community area land needs assessment is based on the population forecasts from A Place to Grow – from which, upper and single-tier municipalities shall estimate households by type and housing need, then allocate the projected need among lower-tier municipalities, where appropriate. The projected need for each local municipality is translated into applicable densities and separated into housing within the delineated built-up area and designated greenfield area.

The community area lands are where most housing required to accommodate forecasted population will be located. It also includes most population-related jobs, office jobs and some employment lands jobs. The result of the assessment is the amount of additional land required for new community area land to accommodate these homes and jobs to the horizon of A Place to Grow.

This part of the Methodology involves components such as population forecasts, housing needs analysis, housing allocation and supply inventory and community area jobs analysis and reconciliation. These components are used to determine where and how the forecasted community area people and jobs growth will be accommodated within the upper- or single-tier municipality to meet the intensification and density targets in the Plan and the amount of community area land needed (in hectares) to accommodate that growth.

When planning for community areas, municipalities will address policy requirements of A Place to Grow to:

• Use the population and employment forecast contained in Schedule 3 for planning and managing growth, as a minimum;
• Direct development to settlement areas, except where the policies permit otherwise;
• Plan to achieve minimum intensification and designated greenfield area density targets;
• Support the achievement of complete communities that offer and support opportunities for people of all ages and abilities to conveniently access most of the necessities for daily living, including an appropriate mix of jobs, local stores, and services, a full range of housing, transportation options and public service facilities;
• Consider the range and mix of housing options and densities of the existing housing stock and plan to diversify housing options in the future, including additional residential units and affordable housing, to serve all sizes, incomes and ages of households; and
• Plan for a more compact built form that reduces the rate at which land is consumed and supports the integration and sustained viability of transit services.

A Place to Grow requires that upper-tier municipalities, through a municipal comprehensive review, identify minimum intensification and designated greenfield area density targets for lower-tier municipalities and allocate the Schedule 3 forecasts to lower-tier municipalities. The PPS requires upper-tier municipalities to allocate the land and housing unit supply to be maintained by lower tier municipalities. In practice, the assessment will entail consultation between different tiers of government, including public consultation.

As part of the land needs assessment process, the four components identified below provide minimum requirements to be considered when completing local land budgeting processes as part of the municipal comprehensive review.

Population Forecasts

Using population forecast by age group for the housing market area, municipalities may calculate how many additional people a municipality needs to house to the Plan horizon. This involves an examination of the minimum forecasts in Schedule 3 in terms of total population, Census population and household population.

Housing Needs Analysis

Housing need can be broken down by type of dwelling to include age-specific household formation rates in order to forecast growth in the number of households to the Plan horizon, categorized by dwelling type (i.e. ground-related versus high-rise). It should consider both historical and future trends for household growth by units by type.

Municipalities may refer to background information on housing growth by type prepared as part of the review and update of A Place to Grow’s population and employment forecasts.

Household demand can be adjusted for factors such as changes in vacancy rates, market contingencies, additional housing needs for post-secondary students, temporary workers, or units that will be lost over time for various reasons.

Housing Allocation and Supply Inventory

Municipalities, in consultation with the public, allocate the forecasted housing need for the housing market area using factors such as past and future market shares, planned urban structure, housing affordability, and a mix of housing forms and intensification. This includes preparing an inventory of housing in the delineated built-up area, designated greenfield area, and other areas including rural settlements and rural area outside of settlement areas.

Community Area Jobs Analysis and Reconciliation

In addition to the housing units that need to be accommodated, municipalities will need to assess the community area jobs to be allocated to the designated greenfield area to determine density targets. Estimations of persons per unit for the different housing types coupled with the projected housing units needed to accommodate growth will provide, along with the community area jobs, the amount of land needed in this area to the Plan horizon.

Employment Area Land Needs Assessment

This part of the Methodology involves components such as employment forecasts, employment categorization and needs analysis, and employment allocation and reconciliation, to determine where and how much land is needed to accommodate the forecasted growth in jobs in both the employment areas and the community areas.

When planning locations for employment, municipalities will address the following Plan requirements:

• Within settlement areas, make more efficient use of existing employment areas, vacant and underutilized employment lands, and increase employment densities;
• Direct major office and appropriate institutional development to urban growth centres, major transit station areas and other strategic growth areas with existing or planned frequent transit service;
• Direct retail and office uses to locations that support active transportation and have existing or planned transit;
• Prohibit or establish a size and scale threshold to prohibit any major retail exceeding this threshold in employment areas; and
• Provide for economic activity on rural lands that is appropriate in scale and type to the rural context.

As part of the land needs assessment process, these three components provide the minimum requirements to be considered in completing local land budgeting processes as part of the municipal comprehensive review.

Employment Forecasts

Using the minimum employment forecast in Schedule 3, municipalities may establish the employment growth rate from the base year to the Plan horizon. This can involve an examination of other data sources as well such as Statistics Canada’s labour force surveys, local employment surveys, and provincial fiscal updates.

Employment Categorization and Needs Analysis

Municipalities should categorize the total forecasted jobs in four types based on the primary land use: employment lands, population related, major office, and agricultural/rural, which are outside the settlement area. It should consider both historical and future trends for employment growth by type.

As part of the needs analysis, employment growth by type can be adjusted for factors such as changes in economic activity, market disruptors, infrastructure and investment strategies, and other business environment impacts.

Employment Allocation and Reconciliation

Municipalities can allocate the categorized forecasted jobs with the understanding that community area jobs are to be located within settlement areas but outside employment areas while employment area jobs are located in the employment areas. In addition, community area jobs in the designated greenfield area may be counted towards the minimum density target.

Through allocations municipalities can determine whether there are sufficient employment area lands in the municipality to accommodate the employment growth established.

Seeking Feedback

The Ministry of Municipal Affairs and Housing is seeking feedback on the proposed land needs assessment methodology for the Greater Golden Horseshoe. After considering submissions and comments received, the Minister may modify the approach and formally issue a final revised Methodology in accordance with policy 5.2.2.1(c) of A Place to Grow.

The purpose of this policy proposal notice is to inform the public of Ontario that the Province is:

• Proposing a new Methodology for upper- and single-tier municipalities in the Greater Golden Horseshoe to use in assessing their future land needs in a consistent way.
• Seeking comments on how the Province could improve or refine the approach to the proposed Methodology.