Planning and Development Overhaul in Ontario: What it Means for Developers

Since October 25, 2022, when the Government of Ontario introduced Bill 23, the More Homes Built Faster Act, there has been much anticipation about the potential impacts on land use planning and development in the province. On November 28, 2022, Bill 23 received royal assent and was passed into law. Its amendments to numerous pieces of legislation are extensive and intended to help achieve the government’s objective of building 1.5-million homes over the next 10 years. Most changes came into force upon royal assent; here is an overview of some of the most impactful ones.

CITY OF TORONTO ACT AND MUNICIPAL ACT

Rental Housing Replacement

The Minister of Municipal Affairs and Housing (the Minister) may limit a municipality’s power to prohibit and regulate the demolition and conversion of rental units, a broad power intended to preserve a municipality’s existing rental stock. Just how broad that power will remain is now up to the Minister and there may be less onerous rental replacement requirements going forward.

Site Plan Control

Buildings that contain fewer than 10 are to be exempt from site plan control.

Moreover, matters relating to exterior design, such as the character, scale, appearance and design features of buildings, and their sustainable design, are no longer subject to site plan control, except to the extent that it is a matter relating to exterior access to a building that will contain affordable housing units or relating to green roofs or similar alternative roof structures, which a municipality may continue to require. Additionally, the appearance of the elements, facilities and works on the land or any adjoining highway under a municipality’s jurisdiction is not subject to site plan control, except to the extent that the appearance impacts matters of health, safety, accessibility, sustainable design or the protection of adjoining lands. These amendments cast doubt on the ability of municipalities to impose green building standards.

CONSERVATION AUTHORITIES ACT

At a date to be determined, conservation authorities will no longer be permitted to comment on development applications made pursuant to the Planning Act. Moreover, certain activities once prohibited within the jurisdiction of a conservation authority without a permit, such as interfering with a waterway or wetlands or development within protected areas, will no longer be prohibited nor will a permit be required if the activity is part of a development authorized under the Planning Act.

In issuing permits and reviewing decisions to grant permission for development projects, conservation authorities are now unable to attach conditions that aim to mitigate the effects the project is likely to have on pollution or the conservation of land. In a similar vein, conservation authorities can no longer refuse to issue a permit to engage in developments related to renewable energy projects on the basis that the refusal is necessary to control pollution.

ONTARIO HERITAGE ACT

The process of listing properties on a municipal heritage register will be subject to additional regulatory requirements and time limitations. In what the government calls a “use it or lose it” approach, properties cannot remain listed indefinitely. If they are not designated within two years, they must be delisted. Listed properties that are delisted must remain so for five years.

Recent amendments to the Ontario Heritage Act also prevent a municipality from designating a property after 90 days have elapsed from the filing of an official plan, zoning by-law or subdivision application. That restriction is re-enacted to provide that the municipality may only give a notice of intention to designate if the property is already listed.

ONTARIO LAND TRIBUNAL ACT

Amendments to the Ontario Land Tribunal Act allow the Ontario Land Tribunal (OLT) to prioritize certain appeals but also dismiss an appeal if an appellant has contributed to undue delay of the proceeding. The OLT may also now award costs against unsuccessful parties.

PLANNING ACT

Upper Tier Municipalities Without Planning Responsibilities

On a date to be fixed by an order of the Governor in Council, the County of Simcoe, and the Regional Municipalities of Durham, Halton, Niagara, Peel, Waterloo and York will be “upper-tier municipalities without planning responsibilities”. This means that such upper-tier municipalities will no longer have planning policy responsibilities and will no longer be approval authorities for applications for draft plan of subdivision, official plan amendments, zoning by-law amendments, consents or minor variances.

Updating Zoning By-laws Around Transit

Where a municipality adopts amendments to its official plan respecting Protected Major Transit Station Areas, it will have one year following adoption of such amendments to update its zoning by-laws to conform with those policies. While appeals of such zoning by-law amendments are limited, they will be permitted if the zoning by-laws are not amended within that one year period.

As-of-Right Apartment Units

A new definition for a “parcel of urban residential land” has been added to the Planning Act, being land zoned residential within a settlement area that is served by sewage works and municipal drinking water systems. On such land, one can build up to three residential units as-of-right in an existing or new detached house, semi-detached house or rowhouse without paying development charges or being subject to parkland dedication requirements, as noted below. Official plan policies and by-laws may not prohibit such uses and official plan policies and by-law provisions which allow such uses are not appealable to the OLT.

Third-Party Appeals

With the exception of appeals by public bodies (provided it made oral submissions at a public meeting or written submissions to the council when the application was being considered) and the Minister, third-party appeals to the OLT of consent or minor variance applications have been eliminated. Upon Bill 23 coming into force, all third-party appeals will be dismissed unless a hearing on the merits of the appeal was scheduled before October 25, 2022. Third parties will still be entitled to seek party status to OLT hearings. Conservation authorities are specifically identified to not fall within the definition of a “public body” for the purpose of appealing official plans, unless the appeal relates to a natural hazard policy, except for hazardous forest types for wildland fire.

Appeals Following Enactments of Official Plans and Zoning By-laws

There will no longer be a two-year waiting period following the enactment of a new official plan or secondary plan to seek an amendment to such plans. Similarly, Bill 23 repeals the two-year waiting period to seek an amendment to a city-wide zoning by-law following enactment, and the two-year waiting period to seek a minor variance to a site-specific zoning by-law amendment.

Draft Plans of Subdivision

There is no longer a requirement to hold a public meeting for draft plan of subdivision meetings.

Ministerial Enacted Official Plan Amendments

Previously, where the Minister believed a matter of provincial interest was affected by an official plan, the Minister could require the municipality to amend the plan. However, any person or municipality could request a hearing of the Minister’s decision before the OLT. Now, other procedural steps and the ability for an OLT hearing on the matter are to be removed.

Inclusionary Zoning

Regulations under the Planning Act will limit the percentage of inclusionary zoning units required as part of any development to 5% of the total number of units, or 5% of the total gross floor area of residential units. The duration for which such units must remain affordable is 25 years and the lowest purchase price or rent that may be imposed is 80% of the average resale purchase price of ownerships units, or 80% of the average market rent for rental units.

Community Benefits Charges

Regulations under the Planning Act already limit Community Benefits Charges (CBCs) to 4% of the value of the land. A new formula has been introduced to limit the CBCs payable to the total floor area of the new development, excluding the floor area that already exists and will be retained. A formula has also been introduced to exclude affordable residential units and “attainable residential units” (the meaning of which will be prescribed through regulations to the Development Charges Act), and inclusionary zoning residential units.

Parkland

New maximums and reductions are imposed (see below) where parkland is required to be dedicated to a municipality. Additionally, existing residential units will be reduced from the total unit count for the purposes of determining the alternative rate noted below and parkland dedication requirements are determined as of the date a site plan application is made, or where not required, the date the zoning by-law amendment application is made, so long as a building permit is issued within two years of that date.

Where development or redevelopment will include affordable residential units, attainable residential units, or inclusionary zoning units, the maximum parkland dedication cannot exceed 5% of the land multiplied by the ratio of the number of residential units that are not affordable/attainable/inclusionary zoning units by the total number of residential units comprising the development. Non-profit development is exempt from parkland dedication requirements as are the addition of up to three residential units in an existing or new detached house, semi-detached house or rowhouse on a single residential parcel of land.

The maximum alternative rate of parkland dedication for the conveyance of land is reduced from one hectare per 300 units to one hectare per 600 units, and for cash in lieu from one hectare per 500 units to one hectare per 1,000 units. These dedications are capped at 10% of the value of the land for sites five hectares or less and 15% of the value of the land for sites greater than five hectares.

Landowners will also be able to convey parkland that is encumbered and privately owned publicly accessible spaces, or POPS, will be eligible as parkland contribution. Finally, should a landowner propose a conveyance (as opposed to cash in lieu) and the municipality not accept it, the decision may be appealed to the OLT.

DEVELOPMENT CHARGES ACT

Reduced Fees

More relief is provided from development charges for certain types of development. Affordable residential units and attainable residential units, non-profit housing developments and inclusionary zoning residential units are exempt from development charges. Development charges in the case of purpose-built rental housing development are reduced by a percentage based on the number of bedrooms, specifically, 25% for three or more bedroom units, 20% for two-bedroom units, and 15% for everything else. This does not apply to development charges where a building permit was issued prior to Bill 23 coming into force, but it will apply to any remaining payments under a development charge deferral agreement that has already been entered into.

Moreover, in an existing rental building containing four or more units, the addition of the greater of one residential unit or 1% of the existing residential units are now exempt from development charges. Up to three additional residential units in an existing or new detached house, semi-detached house or rowhouse on a single residential parcel of land are also exempt.

Phased in Charges

For all development charge by-laws passed on or after January 1, 2022, the development charges that would otherwise be imposed during the first through fourth years that such by-laws are in force shall be reduced by 80, 85, 90 and 95%, respectively. As an example, on a C$100,000 charge, no more than C$80,000 can be charged during the first year that by-law is passed. Development charge by-laws will also now expire 10 years after coming into force, up from five years previously.

Interest on Deferred Charges

Finally, interest charges on deferred development charges will be capped at prime plus 1%.

For more information, please contact:

Michael Cook  +1-416-863-2428

or any other member of our Commercial Real Estate group.