Two recent provincial developments aimed at addressing Ontario’s growing “housing crisis” may have a significant impact on land-use planning and development in Ontario in the coming years.

First, on January 19, 2022, Premier Doug Ford and Minister of Municipal Affairs and Housing, Steve Clark, met with the mayors and regional chairs of Ontario’s 39 largest municipalities to discuss potential strategies to address Ontario’s housing supply and affordability crisis. The provincial government announced a number of initiatives that it proposes will help accelerate the construction of new housing and increase the supply and affordability of housing options in Ontario, including:

1. CA$45 million for a Streamline Development Approval Fund: the fund will assist with modernizing, streamlining, and accelerating processes for managing and approving housing applications.
2. CA$8 million for an Audit and Accountability Fund: the fund will help identify potential savings and efficiencies through third-party review, further accelerate the creation of new housing, and modernize municipal services in large urban municipalities.
3. Data standardization through the Ontario Data Authority initiative: the province will work with the municipal sector to develop a data standardization process for planning and development applications among municipalities as a means of accelerating approval timelines. The initiative was first announced in spring 2021, and is designed to accelerate Ontario’s economic and social growth through improved data sharing.

Second, on February 8, 2022, the Housing Affordability Task Force, a nine-member panel established by the provincial government on December 6, 2021 and comprised of experts in not-for-profit housing, Indigenous housing, real estate, home building, financial markets, and economics, released its much-anticipated Ontario Housing Affordability Task Force Report (the Report).

The Report provides 55 recommendations that are focused on closing the housing supply gap and improving housing affordability in Ontario. First and foremost, the Report recommends that the province set bold targets and make the construction of new housing a planning priority, specifically by (1) constructing 1.5 million new homes in the next ten years (Recommendation 1) and (2) amending the Planning Act, Provincial Policy Statement, and Growth Plans to “set growth in the full spectrum of housing supply” and “intensification within existing built-up areas” of municipalities as the most important residential housing priorities (Recommendation 2).

The Report recommends action in the five main areas described below in order to achieve these goals and increase housing supply.

1. Requirement for greater density

The Report recommends limiting exclusionary zoning through the introduction of “as of right” zoning, that would permit the development of residential housing for up to four units and up to four storeys on a single residential lot and by modernizing the Building Code and other policies which currently provide barriers to affordable construction (Recommendation 3).

In order to further increase density, the Report also recommends an “as of right” approach for:

• The conversion of underutilized commercial properties into residential or mixed uses (Recommendation 4);
• Secondary suites, garden suites, and laneway houses province-wide (Recommendation 5);
• Multi-tenant housing province-wide (Recommendation 6);
• Unlimited height and unlimited density in the immediate proximity of individual major transit stations (Recommendation 8); and
• Six to 11 storeys with no minimum parking requirements on any streets utilized by public transit (Recommendation 9).

Further, the Report recommends that all lands along transit corridors should be rezoned to mixed commercial and residential uses, with same being done for Residential Apartment zones in Toronto (Recommendation 10).

2. Reduction and streamlining of urban design rules

The Report recommends eliminating what it characterizes as “arbitrary” urban design rules that are “not supported by evidence” and that cause delays and costs that make housing either impossible or expensive to build and purchase.

Specifically, Recommendation 12 of the Report is aimed at creating a more permissive land use, planning, and approvals system by setting uniform provincial standards for urban design and:

• Eliminating policies that prioritize preservation of the existing neighbourhood character at the expense of the construction of new housing;
• Doing away with the requirement for municipal approvals of design matters (such as a building’s colour, texture, type of material, or window details);
• Removing or reducing parking requirements in cities with populations over 50,000;
• Exempting from the site plan approval and public consultation process all projects of 10 units or less which conform to the Official Plan and only require minor variances; and
• Removing floorplate restrictions to allow for larger and more efficient high-density towers.

3. Depoliticization of the housing approvals process and cutting red tape

The Report includes a number of recommendations that are aimed at “depoliticiz[ing]” the planning process and cutting red tape by discouraging or preventing NIMBYism, amending the public consultation process, and eliminating “needless bureaucracy”. Specifically, the Report recommends that municipalities limit public consultations to the maximum legislated by the Planning Act (Recommendation 13), increase digital participation opportunities (Recommendation 14), mandate the delegation of technical decisions to qualified third-party technical consultants (Recommendation 15), prohibit the bulk listing of heritage properties and introduce municipal compensation to property owners that experience financial loss from designation (Recommendations 16 and 17), restore the right of developers to appeal Official Plans and Municipal Comprehensive Reviews (Recommendation 18), and legislate timelines for each stage of the provincial and municipal review process (Recommendation 19).

The Report also includes recommendations that are aimed at reducing the cost to build, buy and rent housing. For example, the Report recommends:

• Waiving development charges and parkland cash-in-lieu and requirement of modest connection fees for all infill residential projects up to 10 units or for any development where no new material infrastructure will be required (Recommendation 32);
• Waiving development charges on all forms of affordable housing guaranteed to be affordable for 40 years (Recommendation 33);
• Conducting an annual provincial review of cash-in-lieu of parkland, Section 37, Community Benefit Charges and development charge collections to ensure that funds are being used in a timely fashion and for their intended purpose (Recommendation 35(a)); and
• Requiring municipalities to spend funds in the neighbourhoods where they were collected, unless previously allocated towards municipality-wide infrastructure projects or neighbourhood priority areas (Recommendation 35(b)).

4. Changes to the Ontario Land Tribunal

The Report includes a number of recommendations that are aimed at “fixing” the Ontario Land Tribunal by returning decision-making powers on proposed developments back to municipalities, weeding out or preventing appeals that are aimed at delaying development, and reducing the Tribunal’s current backlog of more than 1,000 cases. These recommendations include:

• Requiring appellants to seek “leave to appeal” and demonstrate that an appeal has merit before it is accepted (Recommendation 26);
• Removing the right of appeal for projects with at least 30% affordable housing with guaranteed affordable units for at least 40 years (Recommendation 27);
• Encouraging greater use of oral decisions issued the day of the hearing and allow them to be binding on the day of issuance (Recommendation 28);
• Allowing the Tribunal to award punitive damages to municipalities that refuse applications to avoid a deemed approval for lack of decision (Recommendation 29); and
• Encouraging the Tribunal to prioritize projects that will support housing growth and intensification as well as regional water or utility infrastructure decisions (Recommendation 31).

5. Support for municipalities that provide more housing

The Report recommends rewarding municipalities that make “the difficult but necessary choices to grow housing supply” while reducing funding for municipalities that “resist new housing”.

To do so, the Report calls for the creation of an “Ontario Housing Delivery Fund” and encourages the federal government to match funding in order to reward municipalities that meet or surpass provincial housing targets for annual housing growth, reduce approval times for new housing, and remove exclusionary zoning practices (Recommendation 48).

The Report also recommends the adoption of consistent municipal e-permitting systems to standardize data (Recommendation 50), requirements for consistent reporting on housing data from municipalities (Recommendation 52), and reports on gaps between demand and supply by housing type and location at the municipal and provincial levels (Recommendation 53).

Lastly, the Report includes recommendations for matters that it suggests are “important but may take more time to resolve or may not directly increase supply”, such as improving tax and municipal financing, encouraging new pathways to home ownership, and addressing labour shortages in the construction industry (Recommendations 50-55).

Takeaways and impacts on the land development community

The impact of the increased funding from the provincial government that was announced on January 19, 2022, remains to be seen. Some municipalities have indicated that they will be using the funding to create or improve online application portals, implement e-permitting systems, and hire staff that can assist with application backlogs. These changes may allow developers to get their shovels in the ground faster, more efficiently, and for less money. We are hopeful that the funds will be allocated effectively by municipalities to cut red tape and streamline the development approval process, and not be absorbed in programs previously attempted and bogged down with no significant change being implemented.

More significantly, the Report recommends sweeping changes to land use planning law that, if implemented, will have a significant impact on land development in Ontario. Legislation aimed at increasing density through the restriction of exclusionary zoning and other measures could fundamentally change the character of neighbourhoods that are zoned exclusively for single-family homes, while province-wide urban design guidelines will impact the look, feel, and built form of Ontario’s cities and towns. In addition, cutting down on red tape and bureaucratic inefficiencies while limiting appeal rights to the Ontario Land Tribunal may result in more, faster, and less expensive housing construction.

Some critics have raised concerns about the recommendations that would limit public input in the planning process and that call for urban sprawl into nonenvironmentally protected areas, while others have criticized the lack of recommendations that are aimed at deterring investment and speculation from driving up home prices.

We understand that the Province intends to introduce legislation that will respond to the Report in upcoming parliamentary sittings with the possibility of certain reforms being enacted by the early spring.

Dentons will continue to monitor these initiatives and will report on any legislation that is implemented by the provincial government as a result of the Report. If you have any questions about how this relates to you or your business, please contact Katarzyna Sliwa or any member of our Municipal Planning, Land Use, and Development Law group.

Co-authors: Katarzyna Sliwa, Max Reedijk and Katerina Fedortsova