Item - 2019.PH10.3

The Planning and Housing Committee :

1.  Directed that the public consultation comments in Attachment 1 to the report (October 23, 2019) from the Chief Planner and Executive Director, City Planning be used to inform the development of draft Inclusionary Zoning Official Plan policies.

2. Directed City Planning staff to provide a status update to the Planning and Housing Committee, by February 2020, on Inclusionary Zoning Official Plan policies including a process for designating the required Protected Major Station Areas and that any required further analysis be completed.

3. Directed the Chief Planner and Executive Director, City Planning to report to the Planning and Housing Committee on February 12, 2020 on the potential number of units and level of affordability that may have been achieved by an Inclusionary Zoning policy based on the pre Bill 108 policy framework and the feedback received through the public consultation.

4. Directed the Chief Planner and Executive Director, City Planning in collaboration with CreateTO to report to the Planning and Housing Committee on February 12, 2020 with a list of large site or other sites where affordable housing could be created using our current and available tools.

This report presents the results of public consultations conducted over the past six months on the proposed Inclusionary Zoning policy directions considered by Planning and Housing Committee at its May 2019 meeting.

Inclusionary Zoning (IZ) is a land-use planning tool that enables the City to require that affordable housing units be included in new residential developments. Through Inclusionary Zoning, the City has the potential to increase the supply of affordable housing, continue to encourage market housing development by supporting a diverse range of housing supply, and create more inclusive, complete and equitable communities.

Staff developed proposed policy directions for Inclusionary Zoning based on initial consultations with key stakeholders as well as findings from an in-depth analysis of housing need and demand over the past 10 years, current trends in market pricing for ownership and rental housing, and potential impacts of Inclusionary Zoning on the financial viability of market developments. 

The public consultation approach on the proposed policy directions included engagement on broad options for the application of Inclusionary Zoning and facilitation of independent community groups to host their own consultation events, as directed by the Planning and Housing Committee. The consultations also asked for feedback on a proposed new definition of affordable ownership housing. Staff were previously directed by the Planning and Growth Management Committee on April 6, 2016 to report back on a new Official Plan definition of affordable ownership housing in conjunction with Inclusionary Zoning.

Overall, there was general support for Inclusionary Zoning, with many stakeholders and members of the public recommending that the official plan policies provide a clear framework for implementation and maximize opportunities for creating new units in

market developments that remain affordable over the long term. Many suggested the City move to an income-based definition of "affordable" to better reflect rent levels that are affordable to low-income households. The feedback from this first round of public consultation will help to inform further analysis on the Assessment Report and the development of a draft policy framework.

Since the background financial impact analysis work and proposed policy directions for Inclusionary Zoning were presented to the Planning and Housing Committee on May 28, 2019, the Province made changes to the Planning Act through Bill 108 to limit where municipalities can implement Inclusionary Zoning. Previously under Bill 7 (the Promoting Affordable Housing Act, 2016), municipalities were able to determine the areas where inclusionary zoning would apply. As a result of the Province's enactment of Bill 108, Inclusionary Zoning is now limited to Protected Major Transit Station Areas or areas where a Development Permit System has been ordered by the Minister. This change came into force and effect on September 3, 2019. Bill 108 also introduced changes to remove the existing Section 37 provisions in the Planning Act and replace it with a capped community benefit charge that combines development charges for growth-related parks and capital infrastructure, parkland and community benefits. Details of the new community benefits authority under the Planning Act have not yet been outlined in a provincial regulation. The new community benefits authority may impact the Inclusionary Zoning financial impact analysis findings. For example higher or lower inclusionary zoning requirements than what was outlined in the proposed policy directions may be feasible as a result of the new community benefits framework. As a result, work on the Inclusionary Zoning policy framework cannot be finalized until the provincial regulation on the new community benefits authority is issued and any required further analysis is completed to reflect the new community benefits authority in the Inclusionary Zoning Assessment Report. A further regulation related to the CBC is anticipated to be released in the fall.

Once the regulation is issued, staff will advance work on Inclusionary Zoning, including developing a draft policy framework based on work completed to date and feedback received through the public consultations. Staff will continue to request that the Province allow the City to implement Inclusionary Zoning in areas beyond Protected Major Transit Station Areas.