Item - 2019.PH6.2

The Planning and Housing Committee:  

1. Directed that the proposed Official Plan inclusionary zoning policy directions and affordable ownership housing definition, appended as Attachment 1 to the report (May 13, 2019) from the Chief Planner and Executive Director, City Planning be endorsed as the basis for public consultation.

2. Directed that the public consultations on proposed Official Plan inclusionary zoning policy directions and affordable ownership housing definition include the following: 

a. Applying Inclusionary Zoning to as-of-right and rezoned development

b. Applying Inclusionary Zoning as broadly as possible geographically

c. Applying Inclusionary Zoning at set aside rates that provide the greatest amount of affordable housing

d. Keeping the housing affordable for the greatest duration

e. Ensuring Inclusionary Zoning units reach deeper levels of rental housing affordability, wherever possible, to reflect the need for deeply affordable rental housing.

3. Directed the Chief Planner and Executive Director, City Planning and the Executive Director, Housing Secretariat to develop and include as part of the public consultations on the proposed Official Plan inclusionary zoning policy directions and affordable ownership housing definition, options and mechanisms to extend the affordability period on inclusionary units from 25 years to longer affordability, including in perpetuity, and report in the fourth quarter of 2019.

4. Directed the Chief Planner and Executive Director, City Planning, the Executive Director, Housing Secretariat and the General Manager, Shelter, Support and Housing Administration to develop and include as part of the public consultations on the proposed Official Plan inclusionary zoning policy directions, options in implementing and administering an income-based alternative to average market rate (AMR), defining affordable rent as spending a maximum of 30 percent of gross income on housing costs, and report in the fourth quarter of 2019.

5. Directed City Planning staff to undertake consultation, including open houses and meetings with key stakeholders, to obtain comments and feedback regarding the proposed Official Plan inclusionary zoning policy directions and affordable ownership housing definition contained in Attachment 1 to the report (May 13, 2019) from the Chief Planner and Executive Director, City Planning.

6. Directed the Chief Planner and Executive Director, City Planning to include in the consultation process the elements currently used in the city’s housing plan consultations to facilitate independent community groups hosting consultation events. 

7. Directed staff to report back in the fourth quarter of 2019 on the findings from the consultation, the results of any further analysis, and prepare recommended Official Plan inclusionary zoning policies and affordable ownership housing definition.

8. Requested the Chief Planner and Executive Director, City Planning in consultation with the Executive Director, Housing Secretariat and the General Manger, Shelter, Support and Housing Administration to report on program options to provide for the participation of non-profit organizations in the delivery of inclusionary zoning units, including the potential of inclusionary zoning units being provided as rental housing and at deeper affordability levels and longer affordability periods, as part of the report back on the Official Plan inclusionary zoning policy.

9. Directed the Chief Planner and Executive Director, City Planning to share the assessment report and any updates with stakeholders.

10. Requested the appropriate staff to report back on achieving at least 20 percent affordable housing on lands being surplused by city agencies and boards where the City of Toronto is sole shareholder.

The Project Manager, Strategic Initiatives, Policy and Analysis, City Planning gave a presentation on Inclusionary Zoning - Proposed Official Plan Policy Directions.

This report presents proposed inclusionary zoning policy directions for the purposes of public and stakeholder consultation and feedback. Inclusionary zoning (IZ) is a land-use planning tool that enables the City to require affordable housing units be included in new residential developments.

On April 11, 2018 the Province enacted Ontario Regulation 232/18 under the Planning Act, 1990 to give municipalities the authority to implement inclusionary zoning. The Act and regulation require that municipalities have an assessment report prepared that will be considered as part of the development and prior to the adoption of Official Plan policies. The assessment report is required to include information related to housing need and demand and the financial impacts on the housing market from inclusionary zoning. The City's assessment report has been drafted and will be utilized as part of the consultation program to provide context and rationale for the proposed policy directions. The draft assessment report is available at https://www.toronto.ca/InclusionaryZoning

A final assessment report will be considered by Council as part of the recommended Official Plan Amendment.

Issues of housing affordability have grown exponentially in recent years, impacting not only the City's most vulnerable residents, but increasingly low and moderate income households as well. The City's renters, particularly households looking for housing in today's market, have been most impacted by increasing housing affordability issues and are more and more often left with little choice but to pay more than 50 percent of their income on rent in order to live within access to transit, jobs and services. Housing affordability is also a concern for ownership households, as ownership prices have increased significantly and are out of reach of many households. Adding to these housing affordability issues, the provision of affordable housing has not kept up with the growth of the City, with only about 2 percent of new units built or approved over the last five years meeting the City's Official Plan definition of affordable housing, defined as at or below average market rent for the City of Toronto by unit type.

In 2018, City Council provided a response to the Province on a proposed version of the inclusionary zoning regulation and reiterated the City's key principles for a successful inclusionary zoning framework. The proposed inclusionary zoning policy directions builds on these key principles and have been developed through in-depth analysis of housing need and demand over the past 10 years, current trends in market pricing for ownership and rental housing, and analysis of the potential impacts of inclusionary zoning on the financial viability of market developments. The policy directions have also been informed by initial stakeholder consultations with key representatives of the development industry and housing and homelessness organizations.

Affordable housing provided through inclusionary zoning may be provided as affordable rental housing or affordable ownership housing. City staff were directed in 2016 to report on further amendments to the Official Plan affordable ownership housing definition in conjunction with inclusionary zoning. The intent of revising the definition is to better support the provision of affordable ownership housing through Official Plan policies. This report includes proposed direction on an updated definition for affordable ownership housing. The proposed definition will be consulted on along with the proposed inclusionary zoning policy directions, and is expected to be further refined based on feedback and additional market analysis.

On May 2, 2019 Bill 108 (the More Homes, More Choice Act, 2019) was introduced in the provincial legislature.  The Bill proposes to amend 13 different statutes, including the Planning Act.  Bill 108 is out for consultation until June 1, 2019.  City staff are currently reviewing Bill 108, including any implications for inclusionary zoning.