Introduction

In June 2016, we provided an overview of the Province’s proposed inclusionary zoning legislation titled "Will Ontario green light mandatory inclusionary zoning?"

The answer to the question we posed in that article is yes. On December 8, 2016, Bill 7, the Promoting Affordable Housing Act, 2016 (the Act) received Royal Assent and proposed regulations are expected to be posted for public consultation in early 2017. In fact, we are told to expect the regulations any day now.

The Act is aimed at increasing access to affordable housing by making it mandatory for some municipalities to implement inclusionary zoning. We wait for the regulations to find out which municipalities will be deemed mandatory, which residential developments will trigger the inclusionary zoning requirement and essentially all of the other details as to how this will work.

Inclusionary zoning refers to policies, by-laws and programs that require development proposals with residential units to include affordable housing units and provide for those units to be maintained as affordable over a period of time. The approach combines housing policy and land-use planning approvals to require private-market development to include below market-rate rental and/or ownership housing as part of development proposals.

Proposed changes in Bill 7

The Act is part of Ontario’s Long-Term Affordable Housing Strategy, which focuses on increasing the supply of affordable housing and helps enable a framework for inclusionary zoning, by modifying legislation including the Planning Act. Bill 7 builds on its predecessor, Bill 204, and includes the below additional changes.

Municipalities must have an assessment report prepared before an official plan is adopted authorizing inclusionary zoning. The assessment report must be made available to the public prior to the adoption of incursionary zoning policies. It must also be updated every five years and within five years of a previous report, and must include the information and documents specified in the forthcoming regulations.

Appeals of inclusionary zoning official plan policies and zoning by-law amendment standards to the Ontario Municipal Board will not be permitted, except by the Minister. However, appeals are permitted with respect to any measures and incentives that a municipality may include in a by-law to support inclusionary zoning policies.

By-laws giving effect to inclusionary zoning policies must include the number of affordable housing units determined under the regulations or, in the absence of such regulations, the number of affordable housing units determined under the by-law. The by-law may include the gross floor area for the affordable housing units instead of the unit count.

A key amendment is that section 37 agreements can to be used to secure affordable housing requirements where inclusionary zoning is required, up to the provisions outlined in the forthcoming regulation.

Also, the Province adopted an Ontario Home Builders Association recommendation to allow "off-site" affordable units to be counted. However, municipalities remain precluded from authorizing the payment of money in lieu of the provision of any or all of the required affordable housing units.

The Minister may make regulations specifying that an inclusionary zoning by-law does not apply to development or classes of development specified in the regulation and specifying the circumstances in which the by-law does not apply.

Conclusion

The Bill 7 changes are welcome by affordable housing advocates. The development industry is largely supportive of these changes as well but is asking for a partnership model with the public sector; one which includes measures and incentives. Much remains to be seen in terms of the implications and impact of the changes as the implementation matters are largely left to the regulations.

For more information, please contact Katarzyna Sliwa of our Municipal, Land Use Planning and Development group.

This article was co-authored by Josh Shneer an articling student in Dentons' Toronto office.