Toronto City Hall

100 Queen Street West

Toronto, Ontario

Canada M5H 2N2

www.city.toronto.on.ca

Tel: 416-392-8148

Fax: 416-392-3821

File No./798008

Urban Planning and Development Services

November 23, 1998

To:Urban Environment and Development Committee

From:Commissioner of Urban Planning and Development Services

Subject:Further Report on New Official Plan Policies and Related By-Laws Regarding the Conversion to Condominium and Demolition of Rental Housing

Purpose:

To respond to the deputations and motions made at the Urban Environment and Development Committee and the Community Councils concerning the planning report on new condominium conversion and demolition control policies (October 15, 1998).

Funding Sources, Financial Implications and Impact Statement:

There are no additional funding or financial implications associated with this follow-up report.

Recommendations:

It is recommended that the following consolidated list of revised recommendations be adopted:

(1)Council adopt new official plan policies to regulate the conversion to condominium and demolition of rental housing by:

(a)adding the following new sections to the Metropolitan Toronto Official Plan:

Section 3.2.3 Conversion and Demolition of Rental Housing

It is the policy of Council:

135.1to preserve, maintain and replenish the supply of residential buildings, and particularly rental buildings, across the City of Toronto by restricting the demolition of residential property and the conversion of rental units to condominium, by discouraging the conversion of rental units to equity co-operative, and by encouraging new rental housing production.

135.2to restrict the conversion to condominium of any building, or any related group of buildings, including equity co-operatives, containing six or more rented residential units as it would be premature and not in the public interest, unless the vacancy rate in the City of Toronto, as reported by Canada Mortgage and Housing Corporation, for private rental apartments and townhouses, respectively, has been at or above 2.5% for the preceding two year reporting period.

135.3despite Policy 135.2, to consider allowing the conversion of buildings containing six or more rented residential units only where the rents that were charged for each unit in the building or related group of buildings one year prior to the application, were at or above the average high-end rent level by unit type as prescribed by Council from time to time, and based on Canada Mortgage and Housing Corporation reports.

135.4to seek the retention of rented residential units, except where the whole or part of a building which contains such units is in the opinion of the Chief Building Official structurally unsound, and to consider, where appropriate, acquiring or leasing a property where such units are at risk of being demolished.

135.5a)when considering redevelopment applications involving the demolition of rented residential units, to seek the replacement of the demolished rental units with rental units of a similar number, type, size, and level of affordability in the new development, and/or alternative arrangements, which in the opinion of Council are consistent with the intent of this policy; and

b)when considering such applications in the context of an increase in height and/or density, to secure such replacement units and/or alternative arrangements through an appropriate legal agreement under Section 37 of the Planning Act.

(b)adding the following definitions under the Glossary of Terms, Section 1.4.4 of the Metropolitan Toronto Official Plan:

"related group of buildings"

buildings that are under the same ownership and on the same parcel of land as defined in the Planning Act.

"rented residential units"

means premises used for rented residential purposes, and includes premises that have been used for rented residential purposes and are vacant.

(c)deleting the following sections dealing with conversions:

sections 2.5.6, 4.5.3, 4.5.4 and 4.5.5 in the East York Official Plan;

sections 2.2.13 and 11.15.2 and the words "or conversion of existing rental accommodation" in sections 11.15.3 and 11.15.4 in the Etobicoke Official Plan;

sections 2.6.2 and 2.6.3 in Part C.4 of the North York Official Plan;

section 6.18 in the Toronto Official Plan; and

section 9.7(b) and item 6. in Part (B) in Appendix I of the York Official Plan;

(d) deleting the following sections dealing with demolitions:

section 2.6.3 in Part C.4 of the North York Official Plan;

section 2.2.15 in the Etobicoke Official Plan;

section 9.8 in the York Official Plan;

section 6.19 in the City of Toronto Official Plan; and

sections 4.10 and 4.10.1 in the East York Official Plan;

(e)deleting the following sections dealing with the replacement of housing:

section 2.6.4 in Part C.4 of the North York Official Plan; and

section 2.2.16 in the Etobicoke Official Plan; and

(f)making any related technical amendments to the Official plans listed in Recommendations Nos, (1)(a), (b), (c), (d) and (e) to reflect the amendment and deletion of the sections.

(2)upon adoption of the Official Plan policies outlined in Recommendation No. (1), Council delegate the responsibility for hearing deputations on condominium conversion applications to meetings of the respective Community Councils and authorize the amendment of the Procedural By-law as necessary, and repeal the interim policies and procedures that Council adopted in Clause no. 4 of Report no. 7 of the UEDC on June 3, 4 and 5, 1998;

(3)Council adopt the application, notice and meeting requirements for condominium conversion and demolition applications detailed in Appendix A;

(4)Council resolve that for the purposes of defining "high-end rental units" in accordance with Policy No. 135.3 (refer to Recommendation No. (1)(a)) the factor of 1.5 times the City's average rent (by bedroom size) as detailed in Appendix B shall be used.

(5) Urban Planning and Development Services staff be requested to review the demolition control by-laws of the former municipalities with respect to, among other matters, the scope and coverage of the various by-laws, as well as the delegation procedures, conditions, penalties and enforcement issues, and report back to the Committee on harmonizing the by-laws;

(6)as an interim measure, Council enact a by-law in the form of the attached draft Bill (Appendix C) which designates the former City of Scarborough as a demolition control area pursuant to section 33 of the Planning Act, requires Council to approve the issuance of demolition permits for residential properties containing six or more units, and delegates to the Chief Building Official the authority to issue demolition permits for residential properties containing five or fewer dwelling units;

(7)authority be granted to apply to the Province for special legislation on demolition control substantially in the form of the draft Private Bill contained in Schedule A of Appendix D which would extend the former City of Toronto's special legislation to all of the new City;

(8)The appropriate City officials be authorized to undertake any necessary action to give effect thereto, including preparing and introducing any necessary bills and giving notice of the public meeting.

1.0Background and Context

At its meeting on November 2, 1998, the Urban Environment and Development Committee (UEDC) made several motions concerning the planning report of October 15, 1998. These motions were referred to the Community Councils and the Commissioner of Urban Planning and Development Services, with a request that their comments be forwarded back to the UEDC for consideration at the meeting on November 30, 1998. This report has been prepared in response to the UEDC's request.

Specifically, this report addresses a number of issues that have been raised by the UEDC, the Community Councils, and deputants to the UEDC. These issues include: general revisions to the wording of the proposed policies; notification and application fees; outstanding work orders; political party commitment to rental preservation; acquisition of rental property; coverage of equity co-operatives; an exemption for specific sites, and coverage of vacant units. Each issue will be discussed in turn in the sections below.

2.0Deputations at the UEDC

The need for the City to bring forward a package of initiatives to address the broader housing situation, inclusive of preservation policies, was raised by Ms. Jane Pepino, a deputant at the November 2, 1998 UEDC meeting, acting on behalf of Goldlist Properties Inc. (see Appendix F). I would like to take this opportunity to emphasize that the proposed condominium conversion and demolition policies and by-laws are, in fact, a part of a larger Municipal Housing Strategy that is being jointly developed by housing and planning staff. The framework for the strategy was adopted by Council on July 29, 30 and 31, 1998. It identifies a number of ways that the City can influence the development of affordable housing, such as providing a leadership or advocacy role, offering land or buildings, financing or funding development, assisting with community supports, reviewing taxation and fees, or supporting the creation and preservation of housing through the land use planning process.

To begin implementing the multiple initiatives required to realize the production of affordable housing, Council has subsequently approved the report on the new multi-residential property tax rate, and endorsed affordable housing demonstration projects for two City owned sites. While the production of new affordable housing is an important goal, equally important is the retention of the current affordable housing stock. Given the recent repeal of the Rental Housing Protection Act (RHPA) and the vulnerability of the rental stock, the proposed set of condominium conversion and demolition policies is a critical initiative that must be implemented as soon as possible.

In response to the deputant's suggestion, and in recognition of the municipal housing strategy being developed, I recommend that policy 135.1 be amended by adding the words "and by encouraging new rental housing production."

3.0Motions made by the UEDC

a) General Revisions to Wording of the Proposed Policies

At its meeting on November 2, 1998, the UEDC made a number of motions in an effort to clarify and strengthen the intent of the proposed policies contained in the report of October 15, 1998. Specifically, it was moved that Policy 135.1 be amended by deleting the words "where appropriate". This appears acceptable and is recommended for adoption by Council.

It was further suggested that this policy be changed by inserting the word "prohibiting" in place of the word "discouraging", as it was considered that this would provide a stronger position against the conversion of rental units to equity co-operative. However, the proposed change could pose some legal problems, as the City cannot prohibit something (i.e. equity co-operatives) that it does not have the authority to regulate. At present, new equity co-operatives are simply registered with the Province under the Co-operative Corporations Act. No municipal approvals are required to create this form of housing.

Also it was suggested that Policy 135.3 be amended by adding the word "only" in an attempt to limit the situations where conversions would be allowed. Again this change would be appropriate.

The UEDC, also in an attempt to strengthen the wording of the policies, requested that Policy 135.4 be changed to delete the words "whenever possible" and "wherever appropriate". While I consider the deletion of "whenever possible" to be beneficial, I believe that the words "wherever appropriate" should remain. As discussed later in this report, one Community Council expressed concern over this policy as it requests Council to consider acquiring or leasing a rental property where such units are at risk of being demolished. The words "wherever appropriate" should offer Council full discretion, and make it clear that the acquisition or leasing option would only be considered in very unique circumstances.

With respect to Policy 135.5(a), the UEDC recommended that the existing policy be replaced by:

"(a)to prohibit redevelopment applications which involve the demolition of rental units without replacement of those rental units with an equivalent number of rental units of a similar number, type, size, and level of affordability in the new development, or the equivalent number of such units which, in the opinion of City Council, is consistent with the intent of this policy"

The key proposed change is the use of the words "to prohibit redevelopment applications...without replacement...of rental units", instead of the words "to seek the replacement of rental units...when considering redevelopment applications". Again, while the suggested change is intended to improve the City's ability to replace rental units, the City cannot prohibit the submission of a redevelopment application (e.g. official plan amendment, rezoning, plans of subdivision and condominium) that does not provide for rental housing. In addition, a refusal to approve a redevelopment application, based solely on the applicant not providing rental units would likely not be sustainable, if challenged.

We recognize the weaknesses in the Province's Tenant Protection Act (TPA) and reduced tools available to the City. However, through the proposed policy (135.5), we are attempting to exercise the City's ability to lawfully secure replacement units as part of a Section 37 agreement, where the owner agrees to provide such housing when seeking additional height and/or density in a redevelopment project.

b)Notification and Application Fees

The UEDC also requested that the following recommendation be added to the October 15, 1998 report:

"(12)notification of applications involving the demolition of rental units be extended to all tenants, and the application fees be adjusted to cover the costs thereof.

The TPA requires landlords to give tenants, in a building proposed to be demolished, at least 120 days notice before the tenancy will be terminated.

The recommended notice and meeting requirements for demolition applications in an area subject to the special legislation are detailed in Appendix A of the October 15, 1998 report. As there is no legal requirement to provide notification to tenants of Committee meetings at which a demolition application will be considered, the City Solicitor is of the opinion that including the cost of providing such notification in the application fees would not be justified. Therefore, the proposed extension of notice and adjustment of application fees is not recommended for adoption.

On the subject of notification, the UEDC also requested that the Commissioner of Urban Planning and Development Services report to the November 30, 1998 meeting on:

(ii) the feasibility of amending Parts A.1(e) and A.2(e) of Appendix A (of the October 15, 1998 report) to expand the notification period beyond fourteen (14) days for tenants of rental housing for which applications for conversion to condominium or demolition have been received.

The 14 day period is in keeping with the 15 days notice previously required under the RHPA. The former legislation appeared to offer ample time for tenants to attend the meetings. It is important to consider that the notice of the public meeting should not be the first time that tenants would be made aware of the application. If approved, Appendix A.1(b) and A.2(b) will require that tenants, in a building proposed to be converted or demolished, be notified at the outset when a condominium conversion or demolition application is made to the City (by means of a notice being placed in a central area of the property). Given the earlier notice, tenants have been offered adequate time to organize and prepare their case long before the public meeting pertaining to the application is scheduled.

c)Outstanding Work Orders

Another recommendation made by the UEDC, as well as the North York Community Council, concerned the City's ability to withhold a planning application or building permit for a new building, based on outstanding work orders against the existing building. Specifically, UEDC recommended that:

"(13)the Commissioner of Planning and Development Services be requested to submit a report to the Urban Environment and Development Committee on the feasibility of establishing a provision that no building permit be issued and no planning application be considered for properties which have outstanding City work orders against them;"

As noted earlier, the City cannot prohibit the submission of a planning application. In addition, refusal of an application on the basis of outstanding work orders would be appealed to the OMB and would be vulnerable. With respect to an application for a permit for a new (replacement) building, the Chief Building Official advises that the Building Code Act does not allow for a condition related to outstanding work orders to be imposed when issuing a building permit. The best avenue for dealing with outstanding work orders is through the enforcement of property standards by-laws and the Building Code Act.

As there are other means available to the City to remedy buildings in disrepair, and given the questionable practice of prohibiting conversion or redevelopment applications on the basis of outstanding orders on an existing building, it is suggested that the above UEDC recommendation not be adopted.

d)Political Party Commitment to Rental Preservation

At its November 2, 1998 meeting, the UEDC also requested the Commissioner of Urban Planning and Development Services to report on:

(i)the feasibility of City Council requesting all political parties running in the next provincial election to commit to the introduction of controls regarding the conversion to condominium and demolition of rental housing; such report to include appropriate rationale and documentation in support of a request of this nature.

The official plan policies recommended in this report are intended to regulate condominium conversions, and should be sufficient on their own.

In terms of demolitions, however, the municipal powers are more limited. Section 33 of the Planning Act and the former City of Toronto's special legislation allow demolition to be postponed for a certain period. They do not permit the City to refuse the demolition of rental property.

At present there are 10 applications for redevelopment that if approved would result in the demolition of 1,161 units. Based on a substantial increase in the number of inquiries that have been received by planning staff concerning potential demolition and conversion projects, since the T PA was proclaimed, the number of active applications is expected to continue to grow.

I believe the recent interest in demolitions and conversions, along with the clear need for affordable housing as presented in the October 15, 1998 report (and the work of the Mayor's Action Task Force on Homelessness and the Council Strategy Committee for People Without Homes), provides the necessary rationale and documentation, should Council wish to make a request to the provincial political parties to determine their position on rental housing controls.

4.0Additional Recommendations made by Community Councils

On November 12, 1998 the planning report (October 15, 1998), along with UEDC's motions, was considered by the Etobicoke, East York, Scarborough, Toronto, and York Community Councils. North York Community Council dealt with the report at a special meeting on November 16, 1998.

The East York, York, and North York Community Councils endorsed the report, subject to a number of amendments being made. The key amendments (not referred to in the previous discussion) are outlined below.

The Etobicoke and Scarborough Community Councils received the report, whereas the Toronto Community Council endorsed the recommendations and requested that monthly reports on units affected by demolitions and conversions be provided to the Council Strategy Committee for People Without Homes, and to all Members of Council. With respect to this matter, the Chief Building Official and I will set up a process for circulating these reports.

a)Acquisition Of Rental Property

The East York Community Council endorsed the report (October 15, 1998) from the Commissioner of Urban Planning and Development Services embodied in the report (November 3, 1998) from the City Clerk, subject to amending Policy 135.4 by deleting the words "and to consider acquiring or leasing the property where such units are at risk of being demolished" after the word "units" so that the policy would read as follows:

"135.4 to seek the retention of rented residential units":

As I understand, the Community Council was concerned about the City's ability to purchase rental properties, given the substantial financial burdens it is now facing. Recognizing this, the original recommendation read: "to seek, whenever possible, the retention of rented residential units, and to consider, where appropriate, acquiring or leasing the property where such units are at risk of being demolished." It was felt that the words "to consider, where appropriate" offered full discretion for Council in deciding whether to purchase a rental property at risk. There is no requirement for Council to do more than consider the matter. Only in very unique situations would Council be prepared to acquire a property.

I am therefore, recommending that the original wording of the (October 15, 1998) report continue to be applied (with the exception of the deletion of the words "whenever possible", as discussed in Section 3 a) above).

b) Coverage of Equity Co-operatives

The York Community Council recommended that policy 135.2 be amended by:

deleting the words "including" and substituting the words "exclusive of"; and

deleting the words "containing six or more rented residential units" and by substituting the words "where 33 percent or more of the units are tenanted",

so that based on their revisions, the policy would read as follows:

135.2to restrict the conversion to condominium of any building, or any related group of buildings, exclusive of equity co-operatives, where 33 percent or more of the units are tenanted, as it would be premature and not in the public interest, unless the vacancy rate in the City of Toronto, as reported by Canada Mortgage and Housing Corporation, for private rental apartments and townhouses, respectively, has been at or above 2.5 percent for the preceding two year period.

In particular, I have serious concerns about the above recommendation as it removes the minimum unit number threshold that was intended to apply to all rental properties - not just equity co-operatives. Also, it excludes equity co-operatives (and other rental buildings) where 33 percent or more of the units are rented. This runs completely counter to the intent of the policy, as it is those buildings with the greatest number of rental units that we most want to protect.

Equity co-operatives are particularly problematic. I realize that some people who have purchased shares in equity co-operatives are now experiencing some difficultly in securing loans/mortgages. However, I am also concerned about the impact that wide-scale conversion may have on the future tenancies and rental units in these equity co-operative buildings.

Except in specific circumstances, tenants in equity co-operatives cannot be evicted for the shareholders own use. While the TPA states that existing tenants in an equity co-operative building to be converted cannot be evicted, any future tenants in the building once converted to condominium may be evicted, if the owner or his family wish to occupy the premises.

For a variety of reasons, condominium buildings typically have a much higher market value than comparable equity co-operative buildings. Once converted to condominium, it is expected that the current price of the equity co-operative buildings will rise. In time, there would most likely be upward pressure on the rents of the tenanted equity co-operative units, in order to cover the expected higher unit purchase price and carrying costs.

For years most of the former municipalities have made it clear, through their resolutions and official plan policies that they are opposed to the conversion of rental buildings to condominium. Municipal powers to restrict the conversion to equity co-operatives, however, is limited. The vast majority of equity co-operatives have been created through the conversion of rental buildings, as a means of by-passing municipal and provincial conversion legislation. By permitting the conversion of equity co-operatives to condominium, I am concerned about supporting this two step conversion process now and in the future.

For the above reasons, coupled with the problematic wording of the amendment, I cannot support the proposed change.

c) An Exemption for Specific Sites

The North York Community Council also referred the following motions to the Commissioner of Urban Planning and Development Services for a report to the November 30th meeting of the Urban Environment and Development Committee:

A.That a further clause 135.6 be added as follows:

135.6Council may consider exempting specific sites or areas from the restrictions imposed by policies 135.2 135.3, 135.4 and 135.5, if the following conditions exist:

(i)the building is functionally obsolete;

(ii)it is no longer economically feasible to retrofit the building for the purposes of preserving the stock;

(iii)the existing building is a blight on the neighbourhood characteristic;

(iv)the in-situ tenants want to buy the building; and

B.That Council may exempt properties, generally, specifically, or in areas included in official plan amendments or detailed secondary plans, from the provisions of this official plan amendment whenever desirable for the purposes of good planning.

In response to these suggestions, I understand the Community Council's interest in being able to use some discretion when dealing with specific proposals, particularly with respect to demolitions. The first three criteria under A seem to address situations where a rental building has fallen into disrepair, to the point where it may no longer be salvageable. In an effort to deal with these concerns, I am recommending that the following words be used under policy 135.4:

"to seek the retention of rented residential units, except where the whole or part of a building which contains such units is in the opinion of the Chief Building Official structurally unsound, and to consider, where appropriate, acquiring or leasing a property where such units are at risk of being demolished."

This would permit the demolition of those buildings where is it no longer practical to consider the rehabilitation of the structure.

Suggested policies A (iii) and B above deal with special exemptions: where in-situ tenants want to buy the building; and for specific sub-areas of the City. A key problem with A (iii) is that many tenants are vulnerable and not able to voice their concerns about a proposal to change the property. Tenants opposed to buying may be pressured to change their decision or vacate their units. With respect to B above, I would like to emphasize that the policies as proposed do allow for good planning principles to be applied.

In my opinion, it would not be advisable to consider exemptions for either specific buildings or neighbourhoods in isolation of the broader City-wide perspective. To do so, would result in tenants being evicted at a time when there are few alternatives elsewhere in the City. Furthermore, these types of exemptions would place greater pressure on the overall housing market, which is already under tremendous stress.

d) Coverage of Vacant Units

The condominium conversion and demolition policies as presented in the October 15, 1998 report refer to preserving "rented residential units". The intention was to cover occupied and vacant rental units, thereby protecting both the tenants and rental housing stock. To clarify the meaning of the term "rented residential units", it is suggested that the following definition be inserted into the glossary of the Metropolitan Toronto Official Plan.

"rented residential units" means premises used for rented residential purposes, and includes premises that have been used for rented residential purposes and are vacant.

5.0Conclusion

This report has discussed the modifications proposed by the UEDC and Community Councils.

The following proposed modifications are not recommended for adoption because of the legal implications:

-prohibiting redevelopment applications that do not include replacement rental housing;

-prohibiting equity co-operatives;

-adjusting demolition application fees to include the cost of providing notification; and

-not issuing building permits and not processing planning applications for properties with outstanding City work orders against them.

For reasons detailed in the report, the following proposed modifications are also not recommended for adoption:

-deleting the words "where appropriate" in Policy 135.4;

-increasing the notification period for public meetings on condominium conversion and demolition applications;

-deleting reference to Council considering, where appropriate, the acquisition or leasing rental properties at risk;

-excluding equity co-operatives from conversion policies; and

-providing additional exemptions to the conversion and demolition policies.

However, the proposals to delete the words "where appropriate", and "whenever possible" in Policies 135.1 and 135.4, respectively, and to add the word "only" in Policy 135.3 are acceptable and recommended for adoption.

As well, the UEDC and Community Council motions raised the issue of having to provide for the demolition of structurally unsound rented units and consequently Policy 135.4 has been revised. Changes have also been recommended to apply the policies to vacant rental units.

Contact Name:

Barbara Leonhardt

Director, Policy and Research (392-8148)

Reviewed by:

Paul J. BedfordVirginia M. West

Executive Director and Chief PlannerCommissioner of

City Planning DivisionUrban Planning and Development Services

[p:\1998\ug\uds\pln\ud981775.pln]cc

Appendix A:

Application, Notice and Meeting Requirements for Condominium Conversion and Demolition Applications

A.1Condominium Conversion Applications

As part of an application for approval of draft plan of condominium which involves the conversion of existing rental accommodation in buildings with six or more rented residential units:

(a)the applicant shall be requested to satisfy the necessary submission requirements, including a list containing the names and addresses of tenants in the rental property;

(b)the applicant shall be requested to post a notice of the application in a manner prescribed by the City in a central area of the property;

(c)the applicant may be required to submit a report from a qualified consultant, agreeable to the City, evaluating the structural soundness and general condition and maintenance of the structures and associated facilities;

(d)the City shall hold a meeting to hear deputations on a condominium application which involves conversion of existing rental accommodation in buildings with six or more rental units;

(e)The City shall, at least fourteen (14) days before the meeting, issue notice of the meeting to (i) the tenants of the subject building of the public meeting by prepaid first class mail; and (ii) the general public by placing an advertisement in the local community newspaper; and

(f)the applicant will be requested to pay for the cost of providing notice of the meeting referred to in (e).

A.2Demolition Applications in Areas subject to special legislation (City of Toronto Act, 1984, as amended from time to time).

As part of an application to demolish buildings containing six or more residential units in an area subject to special legislation:

(a)the applicant shall be requested to satisfy the necessary submission requirements, including a list containing the names and addresses of any tenants in the residential property;

(b)the applicant shall be requested to post a notice of the application in a manner prescribed by the City in a central area of the property;

(c)the applicant may be required to submit a report from a qualified consultant, agreeable to the City, evaluating the structural soundness and general condition and maintenance of the structures and associated facilities;

(d)the City shall hold a meeting to hear deputations on a demolition application which involves the demolition of existing accommodation in buildings with six or more residential units;

(e)The City shall, at least fourteen (14) days before the meeting, issue notice of the meeting to (i) the tenants of the subject building of the public meeting by prepaid first class mail and (ii) the general public by placing an advertisement in the local community newspaper; and

(f)the applicant will be requested to pay for the cost of providing notice of the meeting referred to in (e).

Appendix B:

Interpretative Guidelines

Prescribed Rent Level Re: Condominium Conversions

Until changed by Council, the prescribed rent level above which conversions may be permitted is 1.5 times the average rental rate for each unit type across the City as reported by Canada Mortgage and Housing Corporation.

For example, 1997 rent levels for apartments are as follows:

1997 Apartment Rents by Unit Size

City of Toronto

Notes: - Rent levels pertain to CMHC's 1997 Rental Market universe of 248,905 units.

- CMHC's rental universe only pertains to privately rented apartment units containing 3 or more non-ground related

dwellings.

- CMHC's rental market universe is 52% of the total occupied rental units or 474,605 units (1996 Census) in the City.

* Estimated Impact Across City is approximately twice the 1997 CMHC universe.

Source: CMHC's 1997 Rental Market Survey

NOTE:AVERAGE 1997 RENTS FOR TOWNHOUSES ARE $864 FOR TWO BEDROOMS, $1018 FOR THREE BEDROOMS and $1125 FOR FOUR BEDROOMS

Appendix C: Draft By-Law

CITY OF TORONTO

Bill No.

BY-LAW No.

To designate the area formerly known as the City of Scarborough as an area of demolition control under section 33 of the Planning Act and to authorize the Chief Building Official to issue certain residential demolition permits.

WHEREAS under section 33 of the Planning Act, R.S.O. 1990, as amended, when a by-law respecting standards for maintenance and occupancy of property is in force in the municipality, Council may by by-law designate any area within the municipality to which the standards and maintenance occupancy by-law applies as an area of demolition control;

AND WHEREAS under subsection 2(7) of the City of Toronto Act, 1997 (No. 1), the maintenance and property standards by-laws of the former Cities of Etobicoke, North York, Scarborough, Toronto and York and the former Borough of East York continue to apply to the part of the urban area to which they applied before the coming into force of section 28 of that Act;

AND WHEREAS By-law No.20483, being "a by-law prescribing standards for the maintenance and occupancy of property.", as amended, of the former City of Scarborough, applies to the area of the City of Toronto comprising the whole of the former City of Scarborough;

The Council of the City of Toronto HEREBY ENACTS as follows:

1.The area of the City formerly known as the City of Scarborough, as delineated by a heavy line on the map in Schedule A at the end of this by-law, is designated as an area of demolition control.

2.(1) The Chief Building Official is authorized to issue, without conditions unless subsection (2) applies, on behalf of Council, demolition permits for parts of residential properties in the area described in section 1, where the application to demolish falls within the following categories:

(a)demolition incidental to interior or exterior alterations, or both, or additions to a residential property for the same use;

(b)demolition incidental to alterations or additions, or both, to existing commercial portions of a residential property; or

(c)demolition of a residential property with less than six (6) dwelling units.

(2) If the application is for the demolition of a residential property with less than six (6) dwelling units where a building permit has been issued to erect a new building on the site of the residential property sought to be demolished, the permit shall be issued subject to the following conditions:

(a)that the applicant for the permit construct and substantially complete the new building to be erected on the site of the residential property to be demolished not later than two (2) years from the day demolition of the existing residential property is commenced; and

(b)that on failure to complete the new building within the two year period specified in clause(2)(a), the City Clerk shall be entitled to enter on the collector's roll, to be collected in like manner as municipal taxes, the sum of twenty thousand dollars ($20,000.) for each dwelling unit contained in the residential property in respect of which the demolition permit is issued and that such sum shall, until payment, be a lien or charge upon the land in respect of which the permit to demolish the residential property is issued.

ENACTED and PASSED this ______ day of August, A.D. 1998.

MEL LASTMAN,NOVINA WONG,

MayorCity Clerk

(Corporate Seal)

Appendix D:

Communication (June 10, 1998) to the Urban Environment and Development Committee from H.W.O. Doyle, City Solicitor on the feasibility of special legislation to provide that the former City of Toronto's 1984 special legislation respecting demolition control applies to the whole of the urban area of the new City.

Purpose:

To advise the Urban Environment and Development Committee on the feasibility of amending the former City of Toronto's special demolition control legislation in the City of Toronto Act, 1984, so that the Act will apply to the whole of the urban area of the new City.

Funding Sources, Financial Implications and Impact Statement:

The costs of filing an application for special legislation includes a filing fee of $150.00, the cost of publishing a notice of application once a week for four weeks in the Ontario Gazette and newspaper, the cost of printing the Private Bill and the cost of printing the Act in the annual statutes. Based on 1996 costs for a similar sized Private Bill, costs are estimated at $6,000.00 with newspaper advertising costs being the largest component.

Recommendations:

If your Committee recommends an application for special legislation, it is recommended that:

(1)authority be granted to apply for special legislation substantially in the form of the draft Private Bill attached to this report.

Background:

The Urban Environment and Development Committee at its meeting held on May 19th, 1998, had before it the May 1, 1998 report of the Commissioner of Urban Planning and Development entitled: "City Powers, Policies and Procedures re: the Conversion to Condominium and Demolition of Rental Housing before and after the proclamation of the Tenant Protection Act". As set out in Clause 4 of Report 7 of the Urban Environment and Development Committee, the Committee recommended, among other matters, that Council adopt the following recommendation:

(4)Council request the City Solicitor to review the former City of Toronto's special demolition control legislation and report back by June 1998 to the Urban Environment and Development Committee on the feasibility of amending the legislation in order to extend its provisions to the other former municipalities in the new City; ("Recommendation (4)")

Discussion:

There are six pieces of special legislation that apply in the former City of Toronto that have provisions dealing with residential demolition matters that the Commissioner will be considering in her overall review of demolition matters. The Commissioner has confirmed, as set out in section 2a) of her May 1, 1998 report, that the special legislation being referred to in Recommendation (4) is the City of Toronto Act, 1984, S.O. 1984, c. Pr6 (the "1984 Act"). A copy of the 1984 Act is on file with the City Clerk.

In the case of the demolition of a building containing six or more dwelling units and subject to certain exemptions, the 1984 Act permits Council to refuse to issue a demolition permit for up to one year, even though a building permit has been issued to erect a new building on the site. Under the 1984 Act Council also has the ability to acquire and maintain the property for residential use.

As noted in section 2 "Demolition Control" of the Commissioner's May 1, 1998 report, after the proclamation of the Tenant Protection Act Council will no longer have authority under the Rental Housing Protection Act to require an owner to apply to Council for approval to demolish a rental building. When dealing with demolition applications Council will have to rely on its powers under section 33 of the Planning Act (respecting demolition permits) and, in the case of the geographic area of the former City of Toronto, the 1984 Act and other special legislation.

An application can be made for special legislation to extend the application of the 1984 Act to the whole of the urban area of the new City. The final format of any new legislation is subject to the approval of the Provincial Legislative Counsel.

There are two matters that Council should be aware of in considering the merits of proceeding with an application for special legislation. The first consideration is time. Assuming a June, 1998 proclamation date, it is not possible to receive special legislation before the Tenant Protection Act, 1997, is proclaimed in force. In order to have its maximum effect in regulating the loss of rental housing due to demolition, the special legislation would have to be received before the repeal of the Rental Housing Protection Act under the Tenant Protection Act, 1997. It is also expected that the House will rise for its summer recess on June 25, 1998, and return on September 28, 1998.

Under the rules of the Provincial Legislature on applications for Private Bills (which includes applications by municipalities for special legislation), a Private Bill will not receive first reading until after a declaration proving publication of the notices (once a week for four weeks in the Ontario Gazette and newspaper) has been received by the Clerk of the House. The rules also provide that applications for Private Bills that are received after the first day of September in any calendar may be postponed until the first regular Session in the next following calendar year. Under these circumstances it is unlikely that a successful application would be approved before the winter.

The second matter for consideration, particularly in the case of a majority government, is whether or not the Minister of Municipal Affairs would support the application. After a Private Bill receives first reading it is referred to the Standing Committee on Regulations and Private Bills for hearings. The Committee has authority to amend the Private Bill and may also determine that the Private Bill should not be reported to the House, i.e., the Private Bill dies at the Committee. There is also the possibility that after the 1984 Act is specifically drawn to the Minister's attention, that the Minister may take action to have the 1984 Act repealed.

In order to expedite the overall processing of an application for special legislation and as encouraged by the Standing Committee's guidelines, the usual practice is to consult ahead of time with Legislative Counsel on the form of the Private Bill, and with Ministry of Municipal Affairs' staff on both the form and content of the Private Bill, before giving notice and filing the application for the Private Bill with the Clerk of the House. This process also permits the City Solicitor and applicable Commissioner to seek instructions from Council on any substantive changes to the draft Private Bill being recommended by the Province.

Attached to this report as Schedule A is a draft Private Bill.

Conclusion:

If your Committee wishes to recommend an application for special legislation to extend the application of the 1984 Act to the whole of the urban area of the new City, your Committee could recommend the adoption of recommendation (1) of this report.

Contact Name:

Christina M. Cameron

Legal Services Division

392-7235

H.W.O. Doyle

City Solicitor

SCHEDULE A

Bill Pr1998

An Act Respecting the City of Toronto

PreambleThe City of Toronto has applied for special legislation with respect to applying the provisions of the City of Toronto Act, 1984, respecting demolition control, to the whole urban area of the City and not just to the area of the former City of Toronto.

It is appropriate to grant this application.

Therefore, Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

Definitions1. In this Act,

1997,c.2"city" means the City of Toronto incorporated by the City of Toronto Act, 1997 (No. 1);

"urban area" has the same meaning as in the City of Toronto Act, 1997 (No. 1).

Application2. Despite clause 2(5)(a) of the City of Toronto Act, 1997 (No.1), the provisions of the 1984, c. Pr6City of Toronto Act, 1984, apply to the whole of the urban area of the city.

Commencement3. This Act comes into force on the day it receives Royal Assent.

Short title4. The short title of this Act is the City of Toronto Act, 1998.

0195524.03

Appendix E:

Definition of Co-operatives Contained in the RHPA, R.S.O. 1990

"Co-operative" means a rental property that is,

(a)ultimately owned or leased or otherwise held, directly or indirectly, by more than one person where any such person, or a person claiming under such person, has the right to present or future exclusive possession of a unit in the rental property and, without restricting the generality of the foregoing, includes a rental property that is owned or leased or otherwise held in trust or that is owned or leased or otherwise held by a partnership or limited partnership as partnership property, where any trustee, beneficiary, partner, general partner, or limited partner, or other person claiming under such trustee, beneficiary, partner, general partner or limited partner, has the right to present or future exclusive possession of a unit in the rental property, or

(b)ultimately owned or leased or otherwise held, directly or indirectly, by a corporation having more than one shareholder or member, where any such shareholder or member, or a person claiming under such shareholder or member, by reason of the ownership of shares in or being a member of the corporation, has the right to present or future exclusive possession of a unit in the rental property,

but does not include a non-profit co-operative housing corporation as defined in the Co-operative Corporations Act;

Appendix F:

Letter dated November 11, 1998 addressed to His Worship Mel Lastman

From:Goldlist Properties Inc., Suite 300, 65 Overlea Boulevard, Toronto, Ontario, M4H 1P1

Re: Proposed Official Plan Policies, Conversion to Condominium and Demolition of Rental Housing

Dear Mayor Lastman and Members of Council:

I am writing to advise you of a presentation made on behalf of Goldlist Properties by Ms Jane Pepino, Q.C., to the Urban Environment and Development Committee on November 2, 1998. Ms. Pepino was responding to a set of recommendations put forward by staff in the Urban Planning and Development Services Department relating to the conversion and demolition of rental housing in Toronto.

We clearly recognize that the issue of affordable rental housing is a serious concern to many people in the City of Toronto. Goldlist Properties has a solid record of working cooperatively with all stakeholders to address important issues, and we are committed to continuing that work in the future.

As you may know, Goldlist Properties has applied to amend the Official plan for the former City of York planning area and Zoning By-law 1-83 to permit the construction of two new 25 storey condominium buildings of 125 units each and 36 townhouses for a total of 286 units. The development would entail the demolition of two existing high rise rental buildings containing a total of 148 rental units and 98 Hotel Suites. We took the opportunity to address members of the Urban Environment and Development Committee in order to participate in the development of a sound policy that will address the interests and needs of all concerned.

The Urban Planning and Development Services Department has recommended that Council adopt new policies to regulate the conversion to condominium and demolition of rental housing in response to the recent repeal of previous restrictions on conversion and demolition by the Province's new Tenant Protection Act. However, it is our view that the recommendations are counterproductive, and although delaying the demolition or conversion in the short to medium term, will not lead to enhancements in the quality or supply of Toronto's rental housing stock.

We strongly encourage Council to reject the recommendations to regulate the conversion to condominium and demolition of rental units because they do not provide any incentives to add new rental units to the existing housing stock in Toronto. Instead, they put disincentives in the way of renewed and increased housing supply, and they do not address serious issues facing the housing industry. While we understand the attempt to avoid further reductions in the number of rental units available in Toronto, we feel there are better policy options available to Council that will encourage the construction of rental units to replace those that have outlived their useful life.

It is a well-know fact that investors are not attracted to rental housing because the high costs of construction (e.g. permits, development charges, PST and GST taxes, recently increased CMHC mortgage insurance fees) cannot be recovered through the collection of average rents acceptable to tenants. Recognizing that rental regulations have seriously constricted investment in the sector over the last twenty years, the Province responded with the Tenant Protection Act. The provincial legislation provided a set of tools that were badly needed, and although they do not provide the entire answer, they should not be overridden or reversed by municipal action.

Just five months after the new legislation was proclaimed, we are already seeing recommendations to Council that will, if adopted, add new barriers at the municipal level in the form of policies that may temporarily preserve but do not renew the aging rental housing stock. We believe the recommendations under consideration have the wrong orientation and the wrong objective because they ignore the need for coordinated, constructive and forward-looking solutions to address this issue. More importantly, they will send a negative message to the housing industry at the time when it is poised to begin working constructively within a new regulatory environment, taking advantage of a positive business cycle.

In order to stimulate the development of more rental housing in Toronto, additional tools are needed. During her presentation to Committee members, Ms. Pepino advocated for a number of initiatives that will help to encourage investment in this sector.

Specifically, we recommend that the City of Toronto:

1. Establish an administrative structure to actively encourage partnerships to combine affordable (often municipally owned) real estate with investment capital to produce private sector market units.
2. Pass resolutions and implement an action plan to press the provincial and federal governments to acknowledge the rental housing problem and contribute to a solution by allowing PST and GST exemptions on building materials and other development expenses (especially services) that are dedicated to production of rental units.
3. Establish a task force to initiate dialogue with industry representatives about municipal assurances and incentives that will encourage them to build new units.
4. Provide exemptions in any relevant municipal policy respecting buildings that require structural repairs and improvements that are not economically feasible.
5. Take action that will capitalize on low interest rates and the development of a new regulatory climate that has returned Ontario's rental housing industry to the brink of viability.

There is an urgent need for coordinated action among all levels of government to address issues facing our industry.

We are very much encouraged by Council's recent decision to allow substantially lower property tax rates for new apartment buildings. This decision represents a progressive step toward a solution to low vacancy rates and decaying rental properties. We encourage you to reject new policies that do not provide tools and incentives, and to support better options that will encourage new construction and provide an obvious boost to the local economy.

Thank you for your consideration of our comments and please accept this as our formal request to be notified of any notices of decisions or future meetings or reports concerning this initiative.

Sincerely,

Richard Kuchynski

Director of Planning & Development

cc:Premier Mike Harris

Hon. Al Leach

Paul Bedford

Michael Goldberg

N. Jane Pepino

Nancy Rickford

Virginia West

Novina Wong