Parks, daycares and affordable housing may no longer receive adequate funding from developers in Toronto under changes to provincial rules proposed Friday by the Ontario government.
The new rules proposed by Premier Doug Ford’s PC government include a cap on how much the city can charge developers for “community benefits.” Those benefits have previously included a condo developer making space for a daycare in the ground floor of a building, dedicating parkland on site — or providing the equivalent cash to the city for those kinds of facilities.
The city currently has three different tools under provincial legislation it uses to collect money or direct benefits from developers. But the provincial government has proposed collapsing those tools into one new “community benefits charge” or CBC.
On Friday, the province proposed capping that new charge in Toronto at 15 per cent of a development site’s land value.
Coun. Josh Matlow, who has pushed for community benefits to keep pace with unprecedented development in his midtown ward that includes the Yonge-Eglinton area, said Friday the proposed changes appear to break the province’s promise that cities would draw the same revenues from developers as they do today.
Matlow said there is no evidence the changes would create new affordable housing despite claims to the contrary, but would reduce the municipalities’ ability to ensure “a high quality of life” in their communities.
“Communities will pay more so wealthy developers can make more under the provincial government’s community benefits charge,” he said. “The community benefits charge looks like another Doug Ford giveaway to his developer supporters, at the expense of the people of Ontario and their communities.”
City staff have previously warned that any proposal that is not revenue neutral for the city would have “negative implications for the delivery of parks and community infrastructure in all communities across Toronto.”
Toronto’s chief planner Gregg Lintern told the Star on Friday the city needs to do more analysis to know if the proposals alleviate those concerns.
“We need to do that assessment because the endgame here is building complete communities,” he said. “The principle of revenue neutrality, we feel, will allow us to have growth paying for growth.”
The alternatives, he said, are that the city would have to subsidize development to serve residents properly or cut services — “in other words, accept less.”
Julie O’Driscoll, spokesperson for Municipal Affairs and Housing Minister Steve Clark, did not directly answer the Star’s question about what calculations went into the proposed percentages to ensure cities would not lose revenue from developers. She said they hope to hear more from municipalities through a month-long consultation process that ends March 30.
“Our government believes that growth must pay for growth, and that municipalities need the flexibility and resources to support complete communities,” she said in a statement. “We also know that builders and municipalities need certainty about the costs of providing these community services.”
Meanwhile, the major associations representing Ontario developers praised the province’s proposal on Friday.
Dave Wilkes, president and CEO of the Building Industry and Land Development Association (BILD), said it accepts the idea “growth must pay for growth,” but said the new CBC introduces greater “certainty” into the planning process.
Suggesting developers are interested in contributing less than they are today, he said, is “completely unfair and it’s not supported by the facts.”
When asked whether the CBC would mean developers would pay less in Toronto and elsewhere, Wilkes said: “I can’t answer that question.”
In a statement Friday, Joe Vaccaro CEO of the Ontario Home Builder’s Association (OHBA) said his organization “continues to support the principle that growth pays for growth, but over the last decade the application has escalated beyond reasonable cost recovery.”
Vaccaro said the proposed new CBC would be more “accountable, predictable and provide more certainty” for everyone, including home buyers.
The cap on community benefits is part of sweeping changes to planning legislation first introduced last year.
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The More Homes, More Choice Act was announced in May 2019 to cut red tape and increase the supply of housing, according to the provincial government.
Part of the many changes to existing legislation included condensing the three different tools currently available to the city.
Today, the city collects set development charges to help pay the capital costs of infrastructure needed to serve Toronto’s growing neighbourhoods. Those charges pay for hard infrastructure like sewers and what’s seen as “soft” infrastructure like libraries.
The province at first proposed only hard infrastructure like pipes and sewers could be funded through development charges under the new system, but Friday’s proposals say parks development and libraries could also be paid for through development charges. But if paid for through development charges, those services could not also be funded through a CBC, the city said — potentially creating an either-or situation that could mean less money overall for the city.
The city currently has $924 million budgeted for community infrastructure projects over the next 10 years, which it expected to pay for with development charges. That includes money for 12 childcare centres representing 583 new spaces, expansion and renovation of 21 Toronto Public Library branches, 100 parks and related facilities, including two new ferry boats, 19 new and expanded recreation centres, five pools and four arenas and ice facilities, city staff previously reported.
In addition, so-called section 37 agreements — sometimes referred to as density bonusing — are currently negotiated between the city and developers on a case-by-case basis to exchange any added height and density requests for community benefits or cash in lieu of those benefits.
Under the new CBC system, though developers could opt to provide an actual on-site facility for community use — the value of which would be subtracted from whatever charge has been applied to them by the city — they do not have to enter into an agreement that guarantees its delivery to the city.
Separate sections of the Planning Act currently allow the city to demand dedicated parkland on a site or cash in lieu of that land.
The new proposal confirms that the city would no longer be able to demand a percentage of a developer’s site for parkland if they are using the CBC — a blow for communities where the soaring cost of land has prohibited the city from building any significant new green space, Matlow noted.
In a statement, Mayor John Tory’s spokesperson Don Peat said the mayor is “cautiously optimistic” the changes “will continue to ensure growth pays for growth.” He said there is an opportunity to review the charge a year after implementation to “ensure there have been no negative impacts to the city’s finances and that the needed benefits are still being achieved.”
The province is proposing that municipalities would have a year to transition to the new CBC regime once it comes into effect after the commenting period.
Officials in York and Halton regions said they needed more time to review what the changes to community benefits and development charges would mean in those areas.
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