As municipalities desperately look for new sources of revenue,
section 37 of the Planning Act has received more
attention. That section provides that in exchange for facilities or
services (such as public art or community benefits), municipalities
may allow developments to exceed the maximum height and density
standards permitted by the applicable zoning bylaw. To exercise
this authority, the municipality's official plan must include
provisions which permit height and density increases.
In the recent decision of 1477677 Ontario Ltd. (Baywood
Homes) v. Toronto (City), the Ontario Municipal Board (the
"Board") refused to impose a section 37 contribution in
the amount of $260,000 in exchange for a development of
approximately 3,858 square meters over and above the as-of-right
zoning permissions. In doing so, the Board confirmed that section
37 benefits must be grounded in fair, clear, transparent,
predictable and specific requirements that are set out in the
municipality's official plan and which are not arbitrary in
their application. A developer of land should, therefore, know in
advance what will be expected by way of section 37 benefits if
increases in height and density are approved.
In this case, the Board found that there was no framework set
out in the municipality's official plan or in any other
planning documents or reports to municipal council to explain how
the requested $260,000 amount was calculated. Therefore, the Board
was not satisfied that the municipality had set out "specific,
fair, transparent and predictable requirements in its Official Plan
as to when, where or how much and for what purpose a contribution
will be required under section 37 by a developer of land".
Also of note, in holding that no section 37 payment would be
imposed, the Board found that the subject lands were situated in an
area where additional density was expected.
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