On February 8, 2022, the Housing Affordability Task Force reported to the Government of Ontario on the state of the housing market in Ontario. Its 33-page Report makes 55 recommendations intended to remove impediments to the construction of 1.5 million much-needed new homes in Ontario over the next decade. An Appendix to the Report considers the existing inclusionary zoning framework and makes further recommendations with respect to inclusionary zoning specifically.

Principal Recommendations

The Task Force cites a Scotiabank study showing that Canada has the fewest housing units per capita of any G7 country. In fact, to reach even the G7 average, Ontario alone would immediately require 1.2 million new units. Furthermore, in addition to its social impact, the housing shortage negatively affects the economy: as the Report notes, Toronto's two-way commute time, the longest in North America at 96 minutes, makes it difficult for many businesses to attract new employees.

The Task Force's 55 recommendations are intended to address the housing supply shortage by creating the conditions necessary to achieve a target of 1.5 million new homes within 10 years. The recommendations are divided into 5 categories:

  1. Requiring greater density – Inefficient land use, especially near transportation corridors, is a major issue in Ontario that can be addressed, in part, by limiting the authority of municipalities to engage in exclusionary zoning;

  2. Reduce and streamline urban design rules – Because inconsistent and sometimes onerous municipal design requirements can create significant impediments to the provision of new housing, the Report proposes the adoption of simplified and uniform provincial urban design standards;

  3. Depoliticize the process and cut red tape – The Task Force recommends a number of steps to reduce obstacles to approval that arise out of what the Report describes as excessive municipal consultation processes and the politicization of technical issues such as heritage designations – these steps include restoring the developer's right to appeal official plans and municipal comprehensive reviews;

  4. Fix the Ontario Land Tribunal  – Delays at the OLT are slowing the pace of approvals, with a current backlog of over 1,000 cases, so the Task Force recommends (among other steps) new powers to discourage use of the appeal process as a stalling tactic and the prioritization of cases that would increase housing supply quickly;

  5. Support municipalities that commit to transforming the system – The Report recommends financial incentives for Ontario municipalities that support growth in the supply of housing, in the form of an Ontario Housing Delivery Fund that would reward success in alleviating the housing shortage.

While Ontario is heading into a provincial election campaign, reports indicate that the Government of Ontario may attempt to pass legislation implementing at least some of these changes before the current legislative assembly is dissolved for the June 2, 2022 vote.

Inclusionary Zoning

As discussed in our November 2021 update on inclusionary zoning ("IZ"), the City of Toronto is the first Ontario municipality to adopt an IZ regime. The Report includes an Appendix that considers IZ in the context of affordable housing policy and makes a number of recommendations, including the following:

  1. Allow cash-in-lieu payments for IZ units – This is an important flexibility option that a number of municipalities recommended to the Task Force;

  2. Require municipalities to use density bonusing and other incentives for IZ –The City of Toronto's IZ regime provides no benefits, incentives or offsets for the provision of IZ units – the Task Force recommends that legislative amendments be introduced to require municipalities to utilize density bonusing or other incentives in all IZ and affordable housing policies that apply to market housing; and

  3. Permit municipalities without IZ regimes to offer incentives and bonuses – This would give a wider range of options to Ontario's municipalities as they develop their affordable housing strategies.

Another option for increasing the supply of affordable housing is the increased use of surplus government lands, an option that, while outside the Task Force's terms of reference, is included in the Report as an item worthy of further consideration.

We will be closely monitoring any legislative changes that are introduced as a result of the Report. The Government of Ontario website has information about the initiative.

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