Submission on Bill 7, The Promoting Affordable Housing Act Standing Committee on Social Policy Legislative Assembly of Ontario November 22, 2016
For more information contact: Harvey Cooper Managing Director CHF Canada, Ontario Region 416-366-1711, extension 237 hcooper@chfcanada.coop Douglas Wong Program Manager, Government Relations CHF Canada, Ontario Region 416-366-1711, extension 801 dwong@chfcanada.coop Simone Swail Program Manager, Government Relations CHF Canada, Ontario Region 416-366-1711, extension 223 sswail@chfcanada.coop CHF Canada is the national voice of the Canadian co-operative housing movement. Its members include nearly 900 non-profit housing co-operatives and other organizations across Canada. More than a quarter of a million Canadians live in housing co-ops, in every province and territory.
Introductory remarks The Co-operative Housing Federation of Canada (CHF Canada) Ontario Region is pleased to speak to Bill 7, Promoting Affordable Housing Act today. While there are a number of changes to legislation proposed by the Bill, we have focused our submission on the sections of the Act that address inclusionary zoning. We are generally supportive of the other components of the Bill. CHF Canada Ontario Region is the umbrella organization for the 550 independent housing co-operatives in Ontario, home to some 125,000 Ontarians. Housing co-ops are found in nearly every riding in the province, but are concentrated in the urban centres. As housing providers, our members see every day the impact an affordable home can have on the lives of those in need. A safe, secure home is the foundation on which we build our lives. With an affordable home we can raise a family, find and keep work, invest in training, and have enough money left over to put healthy food on the table. CHF Canada has long advocated for the Province to give municipalities the right to enact inclusionary zoning by-laws in their communities. We support inclusionary zoning for three reasons: it is a proven tool that has increased the availability of affordable housing for low- and moderate-income households in hundreds of communities worldwide 1 ; it supports healthier, more inclusive communities; and we see the potential for it to help build new affordable co-op and non-profit homes. For too many families, finding an affordable home has become next to impossible. The growing cost of housing has disproportionately affected the one-third of Ontarians that rent. Current estimates show that 273,000 Ontario households pay more than half of their income on rent and 42% of renters are in core housing need. Notwithstanding the years-long municipal social housing waitlists, many of our housing co-ops report that their individual waitlists for market units are over five years long; in some cases they have given up on maintaining lists because the wait is over ten years. It is for this reason that we urge the province to give municipalities the flexibility to create rules that support the development of new affordable rental housing, specifically through inclusionary zoning. In Toronto, the province s largest city, the increase in housing costs over the past 30 years has pushed low-income households to margins of the city, where they have poor access to transit and other public services. As a sector, we are disturbed by this trend. A central value of Ontario s not-for-profit housing co-ops is our commitment to being inclusive, mixed-income communities. The first not-for-profit housing co-ops in Ontario were developed as an alternative to traditional social housing, and in recognition that healthy communities bring people together. 1 Inclusionary zoning is currently being used in large urban centres including London, England; New York City; Boston; Chicago and San Francisco, as well as hundreds of smaller communities in the United States including Fairfax County, Virginia; Montgomery County, Maryland and Palm Beach County, Florida to name a few. CHF Canada s Submission on Bill 7, the Promoting Affordable Housing Act 3
Inclusionary zoning on its own will not fix the affordable housing shortage in the province. That said, CHF Canada strongly believes that government, the private sector and non-profits all have a role to play in providing new affordable housing. If implemented properly, inclusionary zoning has the potential to increase the availability of below-market-rate rental and affordable ownership housing options in some of the most expensive, high-growth areas, where it is particularly challenging to build new affordable housing. It will also give low- and moderate-income households more equitable access to significant public resources such as good quality public transit. While we strongly support inclusionary zoning, we recommend that all parties support amendments to Bill 7 to ensure its success. In particular, we recommend amendments to Schedule 4 of the Bill such that, 1. Offsite development of the affordable housing units and money in lieu of affordable housing units are allowed at the discretion of the municipality where a net social benefit can be identified. 2. All reference to Section 37 of the Planning Act be removed. 1. Offsite development and money in lieu of affordable housing units The intention of inclusionary zoning is to create inclusive communities and neighbourhoods. In most cases, this can be best achieved by including the units in a new building under development or redevelopment. There will be cases, however, where the ongoing costs of providing affordable housing in a particularly expensive new development are prohibitive and would significantly limit the affordability of the units. In these cases, we feel the public good would be better served if, at the discretion of the municipality, the inclusionary zoning units were developed as a standalone building offsite but within a reasonable distance from the original project. The standalone building should then be able to offer either more units of affordable housing, or units that are more deeply affordable than what would have been possible onsite. For co-operative housing providers, an offsite standalone building in many cases would be preferable to units scattered within a larger development. The foundation of our communities is the sense of community that is built among neighbours as they work together for the success of the co-op. There are a few examples of standalone housing co-operatives that were developed in the 1980s that can be instructive to the discussion of inclusionary zoning. Charles Hastings Housing Co-operative is a 91-unit co-op in the downtown core, built in 1983 by a private developer in conjunction with the Cooperative Housing Federation of Toronto. Building the co-op was part of the developer s Section 37 requirement for building an adjacent condominium, with additional funding coming from CMHC. From the outside, the co-op closely mirrors the original condo, but on the inside the co-op was able to specify unit layouts and fittings that were more appropriate for their community. For the past 33 years, the 4 CHF Canada s Submission on Bill 7, the Promoting Affordable Housing Act
co-op has helped create a more inclusive community in the neighbourhood, even though the affordable units are not inside the condominium. Allowing offsite development where a few developers can contribute, either by allowing money in lieu of onsite development or flexible offsite rules, would be particularly beneficial if it allowed co-ops and non-profits to build larger communities. CHF Canada is concerned that rental housing units developed through inclusionary zoning may be of too small a scale to make them financially sustainable. Ontario s Long-Term Affordable Housing Strategy Update released this spring, highlighted some of the problems encountered by small affordable housing providers. Providers that are too small are more vulnerable to cash flow issues if there is vacancy loss, can struggle to afford proper management, and can be less able to withstand the cost of unforeseen expenses such as a building component failure. In our sector, there is an emergent trend of our smallest providers merging with larger co-ops to help them find economies of scale. This is a difficult and timeconsuming process for all involved. We encourage the Province to enable municipalities to learn from our past experience and to find ways to increase the scale of affordable rental communities built through inclusionary zoning. Allowing money in lieu or flexible offsite development can also help counteract the skewing of the housing market which can accompany inclusionary zoning rules. These modifications could broaden the developments that are subject to inclusionary zoning, and protect against an unintended incentive to build smaller developments. 2. Remove references to Section 37 of the Planning Act CHF Canada would urge the Province to remove all reference to Section 37 of the Planning Act from Schedule 4 of Bill 7. Section 37 allows the local community to benefit from a new development and is an important part of making new residential developments that break from the traditional height and density in a community more desirable to their existing neighbours. While inclusionary zoning units are a significant public benefit, they may not offer the same tangible benefit to neighbours; the existing voters are already well-housed and will be disrupted by construction and increased density. We are concerned that the Bill, as it is currently written, is putting inclusionary zoning in competition with Section 37 and may prevent some municipalities from adopting inclusionary zoning. Our experience at the municipal level is that in a battle between parks and housing, housing rarely wins. We understand that the Section 37 restriction in Bill 7 is to prevent municipalities using increased density to offset a developer s inclusionary zoning requirements, and then going back to the developer to seek additional benefits through Section 37, or double dipping as it has been called. This restriction, however, unfairly targets Section 37. There are a number of ways a municipality may choose to make units provided through inclusionary zoning more affordable, including waiving development fees, or CHF Canada s Submission on Bill 7, the Promoting Affordable Housing Act 5
reducing regulatory requirements. Section 37 is just one of any number of these potential offsets. It should be up to the municipality to determine which offsets may be appropriate in their community. Advice on regulation A great deal of the nuance of this inclusionary zoning legislation will be decided in regulation. We feel this is appropriate. In the United States it is common for the rules around inclusionary zoning to be adjusted a few years after they are introduced to reflect the changing housing market and experience. Regulation is far easier to change than legislation, so we are encouraged by the Province s approach. However, we have some recommendations we would offer the Province on the regulations developed. They should: 1. Support the principle of municipal discretion; 2. Set at least a 30-year affordability requirement; 3. Allow non-profits, including non-profit housing co-ops to be exempt from inclusionary zoning provisions. CHF Canada believes a guiding principle for the enactment of inclusionary zoning in Ontario should be to enable municipalities to develop a program that reflects the local housing market and local need. The difference in housing markets in this province cannot be overstated and is constantly shifting. To be an effective public policy initiative, municipalities need the flexibility to react to the circumstances in their local housing market. Notwithstanding municipal discretion, the Province should set a minimum affordability period for inclusionary zoning units of 30 years, but leave it to the discretion of the municipality to set a maximum. By setting a minimum, the Province can ensure that inclusionary zoning is meeting its public policy goal by developing inclusive housing that is affordable for a significant period of time, without limiting the potential of the program with a maximum. Ideally, affordable rental units would be affordable in perpetuity by providing them to a non-profit or co-operative entity. The Province should also provide clarity in regulation to what types of entities are exempt from inclusionary zoning. New developments by non-profits, including housing co-ops, should be exempt from any inclusionary zoning provisions. Our organizations already have a commitment to provide a public service in the form of affordable housing in perpetuity. Some non-profits are experimenting with developing market housing to offset the affordability in other units and communities. These entrepreneurial activities make up for shortfalls in government funding for affordable housing and social services. They should not be further complicated by trying to fit them into the inclusionary zoning rules developed for the private market. 6 CHF Canada s Submission on Bill 7, the Promoting Affordable Housing Act
Closing remarks CHF Canada sincerely appreciates the opportunity to comment on the proposed inclusionary zoning legislation and regulations. Ontario s housing co-ops are keen to see inclusionary zoning passed and will be a willing partner with governments and the private sector in the implementation in communities across the province. CHF Canada s Submission on Bill 7, the Promoting Affordable Housing Act 7