On October 25, 2022, the Ontario government introduced the More Homes Built Faster Act (the Act) in support of the Housing Supply Action Plan, which is aimed at addressing what has been referred to as Ontario’s “housing crisis.”

If passed, the Act will implement significant changes to the land use planning regime in Ontario, with the specific goal of increasing the housing supply by incentivizing the construction of 1.5 million homes over the next 10 years. Dentons reported on the provincial government’s past legislative efforts to address the housing crisis, including with respect to Bill 108, More Homes More Choice Act, the Housing Affordability Task Force Report, and Bill 109, More Homes for Everyone Act, and will continue to monitor the Act and any related changes.

An announcement from the provincial government and background information regarding the Act can be accessed on the Ministry of Municipal Affairs website. Below, we outline some of the most significant proposed changes.

1. Streamlining the red tape

We count approximately 30 different consultations that are proposed to take place between the provincial government and municipalities, other planning authorities, and various stakeholders. Among them is broad consultation focused on a policy review of the Provincial Policy Statement and A Place to Grow: the Growth Plan for the Greater Golden Horseshoe (the Growth Plan). The consultation will focus on themes related to residential land supply, growth allocation, infrastructure, streamlining processes, the environment, and natural resources.

To incentivize municipal housing targets, the provincial government will assign housing targets to 29 municipalities based on population size and growth rates with, the requirement for them to develop pledges outlining their intentions and plans to meet the targets. Municipalities are encouraged to immediately accelerate growth and identify what they will do to address the housing supply.

The provincial government is proposing to remove planning decision-making from the following upper-tier municipalities: Region of Durham, Region of Halton, Region of Peel, County of Simcoe, Region of Waterloo, Region of Niagara and Region of York, to allow lower-tier municipal councils more direct influence and discretion over decisions that impact them directly, clarify responsibilities, and improve efficiency.

2. Addressing the “missing middle” and building more homes near transit

The provincial government is proposing to amend the Planning Act to create a new provincial threshold for what is permitted to be built by strengthening the additional residential unit framework and moving toward “as-of-right” zoning to meet planned minimum density targets near major transit stations. Other amendments are aimed at ensuring complete, sustainable communities are built near and centred around transit. Key proposed changes include:

• Municipalities are required to update their zoning by-laws within one year to meet minimum density targets once key development policies for major transit stations are approved.
• Landowners can add up to three (3) residential units “as of right” for land zoned for one home in residential areas without requiring a zoning by-law amendment. The three (3) units can be within the existing residential structure or could take the form of a residence with an in-law, basement suite, and a laneway or garden homes. The zoning by-law standards respecting matters such as height will remain and continue to apply.
• New units would be exempt from development charges and parkland dedication fees.

3. Reducing costs, fees, taxes, and growth

The provincial government is proposing to amend the Planning Act, the Development Charges Act, and the Conservation Authorities Act to freeze, reduce, and exempt fees typically levied by municipalities and other authorities, which can significantly impact the cost of housing. The provincial government also plans to review other fees levied by provincial ministries, boards, agencies, and commissions to assess any impacts on housing and further reduce or eliminate these fees as a result. The Act aims to create conditions for more affordable and purpose-built rental housing across the province. Municipalities will be required to spend or allocate at least 60% of their development charge and parkland reserve balances at the start of each year. For development charges, priority services would include infrastructure-related items such as roads, water, and wastewater.

Key proposed changes include:

• Exemptions from municipal development charges, parkland dedication levies, and community benefit charges for affordable housing, non-profit housing, inclusionary zoning units, and select attainable housing units.
• Reduction of development charges for rental construction.
• Temporarily freezing conservation authority fees for development permits and proposals.
• Review of other fees charged by provincial ministries, boards, agencies, and commissions.

4. Streamlining bureaucratic processes and improving the Ontario Land Tribunal

The provincial government is proposing to streamline or eliminate certain bureaucratic/administrative approvals that are required to permit development and speed up proceedings at the Ontario Land Tribunal so that cases can be resolved more efficiently. Key proposed changes include:

• Restriction of third-party appeal rights for official plan amendment, zoning by-law amendment, consents, and minor variances, which would mirror the current appeal rights for plans of subdivision.
• Removal of public meeting requirements for draft plans of subdivision.
• Amendments to the Ontario Land Tribunal Act that permit the Tribunal to prioritize cases that meet certain criteria (i.e., those that create the most housing), provide the Tribunal with enhanced powers to dismiss certain appeals, and clarify the Tribunal’s ability to impose costs consequences on unsuccessful litigants.
• Amendments to the Planning Act to remove site plan control requirements for most projects with fewer than 10 residential units (building permits and building/fire code requirements would continue to protect public safety), reducing the number of approvals required for these projects.
• Amendments to the Conservation Authorities Act to regulate and standardize requirements of Ontario’s 36 conservation authorities.

5. Inclusionary zoning

The provincial government is proposing to prescribe a maximum affordability period of 25 years for areas that are subject to inclusionary zoning and an approach to determining the lowest price or rent required for inclusionary zoning units. For ownership units, this would translate to 80% of the average resale purchase price and 80% of the average market rent for rental units. It is proposed that set-aside rates will be capped at 5% per unit. Also, parkland dedication charges, development charges, and community benefit charges would be exempt for inclusionary zoning units (as well as affordable housing units and non-profit housing), with certain exemptions.

6. Measures to help homebuyers and renters

The provincial government is proposing a number of changes to address challenges faced by homebuyers and renters. These changes are consumer-driven and intended to address bad actors and unethical behaviours and help protect consumers. Key proposed changes include:

• Creation of a new attainable housing program for Ontarians that aims to rapidly build attainable homes in mixed-income communities accessible to all in order to help families build portable equity.
• Amendments to the New Home Construction Licensing Act to increase existing maximum financial penalties from CA$25,000 to CA$50,000 per infraction, with no limit to additional monetary benefit penalties, and retroactively imposed for contraventions occurring on or after April 14, 2022. In addition, the changes would enable the Home Construction Regulatory Authority to use funds from these penalties to provide money back to affected consumers, the first province in Canada to provide such funds to consumers. Such amendments would come into force in early 2023.
• Increases to the Non-Resident Speculation Tax in order to further discourage speculative foreign investment.
• Refinements to assessment methodology used to assess affordable rental housing to better reflect reduced rents received by these housing providers. Ontario will also consult with municipalities on potential approaches to reduce the current property tax burden on multi-residential apartment buildings in the province. Other measures being explored include freeing up surplus provincial and conservation authority property for housing, land lease options, and providing for modular construction.
• Eliminating the freeze on Official Plan amendments for aggregates and streamlining the approval process for aggregates to ensure these critical building materials are available.

7. Other measures

A series of other measures also form part of the provincial government’s proposal, including:

• Amendments to the Ontario Heritage Act to renew and update Ontario’s heritage policies, strengthen criteria for heritage designation, and update guidelines, promoting sustainable development and providing clarity and flexibility to municipalities to move forward with priority projects. Consultations and input on streamlining overlapping planning policies that negatively impact precision in mapping and municipal planning are also proposed.
• Consultation between the provincial government and industry partners to consider the impact of land use speculation on the provincial government’s housing supply goals and to consider whether proposed regulatory changes may be needed under the New Home Construction Licensing Act.
• Consultation with various stakeholders on potential regulations to enable greater standardization of municipal by-laws regulating the demolition or conversion of multi-unit residential rental properties of six units or more for greater standardization of municipal by-laws.
• Creation of a working group to examine innovative approaches to building schools in high-density communities.

Next steps

The Act proposes significant changes to Ontario’s land use planning regime in order to achieve the Province’s objective to build 1.5 million more homes. Other legislative amendments are expected to follow with a number of matters where more consultation is required. Further provincial review is expected to bring more opportunities for streamlining the development process in ways that may extend beyond housing. Some of the matters under review include merging the Provincial Policy Statement and Growth Plan, supporting greater digitization, and considering ways to address the impact of housing growth and population movement on the public school system.

Over the coming weeks, the Act will be the subject of Standing Committee hearings and is ultimately expected to receive Royal Assent in early December, before the House rises. The Province is committed to a housekeeping Bill, expected in the Spring.

Dentons will continue to review the legislation and related policy updates as they unfold and provide updates on any relevant developments. In the meantime, should you have any questions about Ontario’s proposed plan and related legislative and regulatory proposals or require assistance in providing comments to the Ministry on any of the various consultation items, please do not hesitate to contact Kat Sliwa or any member of Dentons’ Municipal, Land Use Planning and Development Law team.