Introduction
Section 34 of Ontario's Planning Act was amended two years ago to grant specific authority to local municipalities to pass zoning by-laws with conditions. The City of Toronto Act, 2006, which had been enacted shortly prior to the Planning Act amendments, contains a separate conditional zoning authority for the City of Toronto in s. 113.
Generally, this is the first time in Ontario that municipalities have been permitted to impose conditions upon a specific owner of land when passing a general zoning by-law. Notwithstanding this fact, this did not preclude some municipalities in the past from imposing conditions that landowners provide something in exchange for the passage of an amendment to a zoning by-law. Such arrangements were not, however, legislatively permitted and thus there remains some question as to the validity and enforceability of such agreements.
The authority to enact a zoning by-law with conditions expressly permits "prescribed conditions" to be contractually imposed on an owner pursuant to an agreement. The agreement can then be registered against title to the lands to be enforceable against both current and future owners of the lands. The provisions in both the Planning Act and the City of Toronto Act, 2006 contain an express statutory exception to the common law rule that positive covenants do not run with the land and cannot bind successors in title (this allows the agreements to be enforced similar to other development agreements currently authorized under the Planning Act).
Legal Implications
The conditional zoning authority, unlike a holding by-law enacted under s. 36 of the Planning Act, creates a zoning bylaw that is in full force and effect as of the date it is passed, subject to a requirement that certain conditions be fulfilled after its enactment.
Both developers/landowners and municipalities like the concept of conditional zoning, albeit for different reasons. Landowners appreciate the opportunity to obtain valid zoning amendments prior to the date that such amendments would have been effective if certain requirements were to be satisfied prior to enactment. Municipalities see the benefit of obtaining legal enforceable concessions from a landowner as a condition of seeking zoning approval.
Prescribed Conditions
The authority to use the new conditional zoning authority under the Planning Act and the City of Toronto Act, 2006 is contingent upon a regulation being made that sets out "prescribed conditions." A draft regulation for the Planning Act was originally posted on the Environmental Bill of Rights Registry over three years ago which indicated that the intent of the Ministry of Municipal Affairs and Housing was to permit only a scoped form of conditional zoning. However, to date, no decision has been made regarding the prescribed conditions that may be imposed under either statute.
While the conditional zoning provisions in the City of Toronto Act, 2006 are worded in much the same way as the corresponding provisions in the Planning Act, the fact that there are separate statutory authorities indicates that the Province is likely to permit prescribed conditions to be imposed in the City of Toronto that are different than other municipalities.
The fact that only prescribed conditions may be imposed is a limitation on the scope of the conditions that municipalities may require on zoning. A review of the draft regulation reveals that the proposed permissible conditions are very much tied to the underlying goal of the Planning Act to achieve sustainable development through the development approval process. What is even less clear is how the draft prescribed conditions relate to matters, services, facilities and things that may already be extracted from landowners and secured through various other authorities contained in the Planning Act.
Conclusion
The authority to permit conditional zoning is intended to allow a more flexible zoning process similar to the development permit authority. Landowners and developers will likely embrace this authority if the "prescribed conditions" are limited and do not permit municipalities to extract additional concessions. Municipalities and the City of Toronto, on the other hand, will likely utilize the authority to further their social, fiscal and environmental priorities in an attempt to implement sustainable development. John Mascarin is a partner and a member of the Municipal & Land Use Planning Group at Aird & Berlis LLP. He is a certified specialist in Municipal Law: Local Government and Land Use Planning & Development.
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