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Reassessing Delivery of Community Benefits

In the third and final installment of Urban Strategies’ Morning Buzz series, we honed in on the qualitative aspects of community-building and

How strategies for securing community benefits and parkland dedication have evolved in response to the Province of Ontario’s recent planning policy and legislative reforms.

A New Approach to Securing Community Benefits

The delivery of community benefits to support new development has evolved from being a negotiated process (often referred to as “let’s make a deal planning”) to a prescribed formula that caps the maximum value of a Community Benefits Charge (CBC) at 4% of the project’s land value at the date the first building permit is issued. An applicant can either provide a cash contribution to fulfill its CBC requirement or, where a municipality has implemented a CBC Strategy, can provide an in-kind contribution that aligns with the applicable Strategy.

The panel expressed concern that in many cases the 4% CBC value will not be enough to fund the quantity and quality of community benefits needed to support new development. Moreover, because the 4% CBC is based on land value, which varies widely across Ontario, there will be significant regional variation in the effectiveness of CBC as a tool to extract community benefits.

The panel also highlighted the CBC tool’s inherent lack of flexibility. Given that the value of the CBC is capped at 4% by legislation, what happens when, say, a developer wants to provide an in-kind benefit in the form of a daycare facility that amounts to 5% of the property value? There remains debate as to whether such an overprovision is permissible or ultra vires the Planning Act with differing opinions shared on the matter.  One such opinion is that applicants can voluntarily over-provide with respect to the value of a CBC, but this cannot be secured as a condition of approval, nor would such an offer “run with the land” should the property in question change hands to a different owner.

The issue of transition was also raised as an ongoing area of uncertainty. For example, if a development approval was subject to a Section 37 agreement under the previous Planning Act provision, and an applicant comes forward for a new proposal for additional height and density, are they “topping up” their community benefits by amending the prior Section 37 agreement or by paying a 4% CBC on the incremental uplift?   

Applicants in some instances are taking to creative strategies to circumvent the limits of CBC. One example shared by the Panel is in partnerships between developer applicants and affordable housing providers and other community agencies, which allows for greater certainty in terms of who is driving the application, as well as a potential workaround to constraints that would otherwise be imposed by CBC that could limit the ability for affordable housing and other in-kind community-oriented facilities to be achieved, such as provisions in the City of Toronto Act for delivering social housing.

A common thread in the discussion was that CBC as a policy tool rests on a flawed theory that the planning process in Ontario can be reduced to a formula, whereas in reality, the planning process is iterative, and based on consensus and negotiation. What is needed, according to the panelists, is greater flexibility for municipalities to determine where a higher CBC percentage may be appropriate in order to achieve reasonable and equitable project-specific planning outcomes. Increased taxation to fund community infrastructure was also recognized as necessary, particularly where municipalities have resisted increasing taxes despite increased growth and development pressures.

Changes to Parkland Dedication

Bill 23, the More Homes Built Faster Act, 2022, introduces several changes to Section 42 of the Planning Act which deals with the conveyance of land for park purposes. Among the more significant changes with respect to parkland dedication are (1) new maximum caps on the amount of land that municipalities can require to be conveyed or paid in lieu to satisfy parkland requirements for new development; and (2) the ability for encumbered parkland, stratified parks, or privately-owned publicly accessible spaces (POPS) to fulfill parkland obligations (although the latter change has not yet been proclaimed into force).

The panel noted that in many suburban municipalities, local parkland by-laws have historically been geared more towards low-rise housing than high-density development, which would often have a proportionally larger parkland dedication requirement associated with it. In this regard, the panel recognized that the new maximum caps on parkland will help to ensure that desirable higher-density development is not stymied by outsized parkland dedication requirements.

On the other hand, there is concern that applying a more onerous cap on parkland dedication will create insufficient parkland to meet the needs of growing communities. The new parkland caps were described as a Toronto-centric approach that may not be appropriate for other jurisdictions, and it was suggested that there should be more flexibility from the Province for municipalities to justify their own local caps for parkland dedication.

On the matter of being able to fulfill parkland dedication requirements through stratified or otherwise encumbered lands, or through POPS, the panel recognized this as a positive measure that will offer greater flexibility to achieve a more diverse quantity and quality of open spaces in tandem with new development. The panel opined that this is especially true in cases where lands are encumbered by municipal infrastructure as ease of access will be preserved if and when maintenance on the infrastructure is required. In other cases, such as where lands are encumbered by private infrastructure, the panel recognized that permitting encumbered parkland dedication may not be desirable, and should be at the discretion of the municipality.

The panel expressed that there is a strong desire within the development community for the Province to implement the enabling regulations to allow encumbered and stratified parkland to be conveyed in fulfillment of parkland requirements. At this point, it is unclear when this will happen.

Other Observations

The Panel reiterated similar concerns raised by other panelists in our first two Morning Buzz series related to where discussions around community benefits and parkland fit within the planning and approvals process in the new Bill 109 world. For now, it appears that these discussions are effectively front-ended to the pre-submission review process, in advance of a formal submission, given the truncated timelines within which municipalities must render decisions on planning applications to mitigate the risk of application fee refunds.

The panel agreed that in the context of a compressed application review process.

There is a need for a “relief valve” to allow additional time for complex discussions and negotiations around development applications to take place, including in regard to community benefits and parkland dedication.

Such a relief valve could take the form of a voluntary waiver—similar to the City of Toronto’s use of heritage waivers that suspend Ontario Heritage Act timelines—to suspend the timelines associated with other Planning Act applications in order to allow more time for applicants and municipalities to work together in good faith. At present, the Planning Act does not allow for such a waiver or other voluntary means to slow the Bill 109 timelines. 

Check out our other Morning Buzz Sessions:

Responding to Bill 109

After all this, are we delivering housing faster?