Item - 2020.PH16.7

The Planning and Housing Committee:

1. Endorsed the draft Official Plan Amendment and Zoning By-law Amendment for Inclusionary Zoning, appended as Attachment 1 and Attachment 2 to the report (September 4, 2020) from the Chief Planner and Executive Director, City Planning, as the basis for public consultation.

2. Directed City Planning staff to conduct further analysis, consultations and meet with key stakeholders including housing advocates and the development community to obtain comments and feedback on the draft policies and Zoning By-law for Inclusionary Zoning contained in Attachment 1 and Attachment 2 to the report (September 4, 2020) from the Chief Planner and Executive Director, City Planning, including options to increase the percentage of housing that would be secured as affordable rental or affordable ownership housing with options that would achieve a range of 10-30 percent of residential gross floor area for new condominium developments and 5-20 percent of residential gross floor area for new purpose-built rental developments.

3. Requested the Chief Planner and Executive Director, City Planning to prepare a Final Recommendation Report with a recommended Official Plan Amendment and Zoning By-law Amendment for Inclusionary Zoning for consideration at a statutory public meeting held by the Planning and Housing Committee in the first half of 2021.

The Planner, Strategic Policy, Planning and Analysis, City Planning gave a presentation on Inclusionary Zoning Draft Official Plan Amendment and Zoning By-law Amendment.

This report presents draft Inclusionary Zoning Official Plan and Zoning By-law amendments for the purpose of public consultation. Inclusionary Zoning is a land use planning tool that enables municipalities to require new development to include affordable housing. Inclusionary Zoning will be a key policy tool to help the City achieve its target of approving 40,000 affordable rental homes and 4,000 new affordable ownership homes by 2030. Key components of the draft policies and zoning include requirements for 5-10 percent of the total residential gross floor area in a development to be secured as affordable housing for 99 years. Lower requirements would apply to purpose-built rental housing projects. The Inclusionary Zoning policy requirements would be implemented within strong and moderate market areas identified in Attachment 1 and, in accordance with provincial requirements, would be limited to Protected Major Transit Station Areas (PMTSAs).

The draft amendments have been informed by feedback received through public and stakeholder consultation undertaken in 2019. This feedback included strong support for a 99 year or permanent affordability period and options to require more deeply affordable units.

Affordable units created through Inclusionary Zoning would be secured at rents or prices based on the Official Plan definitions of affordable rental housing and affordable ownership housing. A proposed updated definition of affordable rental housing and affordable rents is targeted to be presented to the September meeting of the Planning and Housing Committee in a separate report. This proposed updated definition would support Action 52 of the HousingTO 2020-2030 Action Plan to review options for a revised definition of affordable housing by adding an income-based approach to the definition. A proposed draft revised definition of affordable ownership was consulted on in 2019 along with the proposed Inclusionary Zoning policy directions. 

This report also presents results of the updated Inclusionary Zoning Assessment Report, which provides an in-depth analysis of housing need and demand and the potential impacts of Inclusionary Zoning on the financial viability of development. While the expectation was to advance this in early 2020, further analysis was required to consider provincial changes to the land use planning framework, including understanding the impact of the proposed community benefits charge (CBC) approach. Updates to the draft Inclusionary Zoning Assessment Report have been made to factor in the latest market data, comments received through consultation and changes to the planning framework introduced through Bill 108. Additional analysis undertaken as a result of public and stakeholder feedback indicates long term and deeper affordability requirements could be supported if the percentage of units secured is adjusted to ensure continued viability. Further analysis will be undertaken to inform the final recommended Inclusionary Zoning policy approach based on feedback obtained through the recommended consultations, including consideration of the proposed definitions of affordable housing as they are refined based on public and stakeholder feedback.

The proposed draft amendments reinforce the City’s policy objectives for providing a full range of housing across the city and supports Action 53 of the HousingTO 2020-2030 Action Plan to ensure new housing opportunities are targeted to low and moderate-income households and affordability is provided long-term.

This report recommends that planning staff undertake public and stakeholder consultation on the draft Official Plan Amendment and Zoning By-law Amendment. Joint consultations are proposed for Inclusionary Zoning and the proposed draft affordable rental definitions. The results of this consultation along with the final recommended Inclusionary Zoning Official Plan and Zoning By-law Amendments are targeted to be brought to Planning and Housing Committee in the first half of 2021. The Official Plan Amendment and Zoning By-law Amendment do not require Ministerial approval and may only be appealed to the Local Planning Appeal Tribunal by the Minister of Municipal Affairs and Housing. A key component to be advanced to support the policies is the development of Implementation Guidelines. These guidelines will be developed to support the final recommended policies and zoning, to ensure clarity and transparency with respect to the City's implementation of the policies.