City-Wide Development Charge By-Law

The Policy and Finance Committee recommends

The Policy and Finance Committee submits the following report (July 12, 1999) from the Chief Financial Officer and Treasurer:

Purpose:

To present the proposed City-wide harmonized Development Charge By-Law (attached as Schedule "A") for Council adoption, having considered the input, comments and concerns expressed by various stakeholders at the public meeting of June 24, 1999.

Funding Sources, Financial Implications and Impact Statement:

The Development Charges Background Study updated to June 9, 1999, presents the maximum development charge that can be imposed upon residential and non-residential development. If fully implemented, the charge would yield annual revenues of approximately $36.0 million, about half of which is attributable to residential development and the balance to non-residential.

For a variety of reasons discussed in the body of this report, the proposed by-law does not include a development charge in respect of non-residential development.

The by-law does, however, include a development charge in respect of residential development. The projected annual revenue based on the revised schedule of charges is estimated at $15.0 million, which is approximately the same amount that was collected through the development charge regimes of the former municipalities in 1998.

In the absence of the implementation of a new development charge by-law as described herein, the City will experience an annual revenue shortfall for capital financing purposes of $15.0 million per year.

Recommendations:

It is recommended that:

(1)The Development Charge By-Law, substantially as attached as Schedule "A", be adopted, which includes the following salient provisions:

1.1.No charge in respect of non-residential development;

1.2.A charge in respect of residential development, which when fully phased in by September 1, 2001, is as follows:

1.3.A two-year phase-in of the residential development charge;

1.4.A time-limited grandfathering clause;

1.5.An exemption for housing developed by non-profit corporations;

and that the City Solicitor be authorized to make such minor technical, stylistic and/or format changes as may be required to implement Council's direction;

2.With respect to Development Charges Exemptions or Rebates for Affordable Housing:

2.1.Council request the Province of Ontario to pass legislation enabling the City to provide assistance, including development charges rebates, to for-profit developers where this is in exchange for an equal or greater benefit to the City in the form of affordable housing as defined from time to time by Council policy; and

2.2.A review of opportunities, further rebates and/or other mechanisms for promoting affordable housing, both condominium and rental, be undertaken in consultation with the development industry and other interested parties;

3.The last day for applying for the recognition of a Section 14 credit towards development charges be extended to December 31, 1999;

4.The sewage impost by-law, as provided for under the former City of Toronto Municipal Code Chapter 292, Article II, be repealed, effective August 31, 1999;

5.For the purposes of complying with the Development Charges Act, 1997, Council adopt the Background Study, updated to June 9, 1999, including the development related capital program contained therein;

6.The Urban Development Institute, the Greater Toronto Home Builders' Association, the Canadian Institute of Public Real Estate Companies, the Labourer's International Union of North America Local 183, and any other interested parties from the development industry, be invited to participate as sub-panel representatives of the Business Reference Group established by Council in April 1999 for the purposes of developing a comprehensive tax policy for long term equity in property tax treatment for various sectors, including the commercial and industrial sectors;

7.The Province be requested to confirm that the Development Charges Act, 1997 permits a municipality to take into account, for the purpose of determining the "average level of service" referred to in paragraph 4 of subsection 5(1) of the Act, previous provincial expenditures in providing a service if the cost of providing the service has been transferred from the Province to the municipality;

8.Council make the determination that no further public meeting is necessary in order to deal with the modifications made to the development charge by-law; and

9.The appropriate City Officials be directed to take the necessary action to give effect thereto.

Council Reference:

At its meeting of May 11 and 12, 1999, Council adopted as amended Clause 1 of Report No. 9 of the Strategic Policies and Priorities Committee (now the Policy and Finance Committee) which, among other things, recommended that the public meeting required pursuant to Section 12 of the Development Charges Act (the Act) be held on June 24, 1999, before the Policy and Finance Committee.

As required by Section 12 of the Act, notice of the public meeting was given in advance of the 20 day requirement, and the proposed by-law and the Background Study updated to June 9, 1999, were made available to the public at least two weeks prior to the public meeting.

The public meeting was held on June 24, 1999. Eighteen deputants appeared before the Committee and a total of twenty-four written submissions were received by the Committee. After having heard the deputations respecting the proposed by-law, the Policy and Finance Committee:

(1)referred the reports and communications before Committee (with the exception of the report (June 17, 1999) from the Chief Financial Officer and Treasurer, entitled "Proposed Development Charge By-law"), to the Chief Financial Officer and Treasurer, together with all the submissions made by the deputants appearing at the June 24, 1999, meeting of the Policy and Finance Committee, for report thereon to the meeting of the Policy and Finance Committee scheduled to be held on July 20, 1999, such report to be prepared in consultation with appropriate Department Heads;

(2)requested the Chief Financial Officer and Treasurer to submit a report to the July 20, 1999, meeting of the Policy and Finance Committee:

(a)on additional tax assessment revenue that the City will obtain from each of these developments;

(b)on the cost of providing services;

(c)examining and reporting on the area-specific charges used in Richmond Hill as opposed to a city-wide charge;

(d)in consultation with the Commissioner of Community and Neighbourood Services and the City Solicitor, on a recommended approach to development charges that maintains the City policy that would lower the cost for the construction of affordable rental housing;

(e)in consultation with the Commissioner of Urban Planning and Development Services:

(i)on the development projects, by former municipalities currently in the development approval process., e.g., OPA, re-zoning, site plan etc.;

(ii)on the amount of development charges that would be payable by project;

(iii)on the amount of tax revenue that would accrue to the City on an annual basis;

(iv)on the costs associated with servicing these projects;

(v)on an explanation of the rationale used to determine the costs; and

(vi)providing a comparison in development activity between the former municipalities that had development charges and those that did not, particularly in the former City of York where said charges were waived during the past two or three years; and

(f)requested the Commissioner of Urban Planning and Development Services, to submit a report to the July 20, 1999, meeting of the Policy and Finance Committee:

(i)in consultation with other City officials, on ways of simplifying and clarifying the application of Section 37 Agreements;

(ii)as to whether there are any specific agreements related to development charges within the former municipalities, i.e., Port Union Agreement Village Area (Port Union Road and Lawrence Avenue);

(iii)on the programs and facilities that can be funded through the new Development Charges Act as well as what may be funded by Section 37 and restrictions to each; and

(iv)on the regime to be put in place so that the development industry would have certitude in being able to measure the City's expectations;

(3)requested the Commissioner of Economic Development, Culture and Tourism to submit a report to the July 20, 1999, meeting of the Policy and Finance Committee on the economic impact on residential development if development charges were imposed; and

(4)concurred with the recommendations embodied in the report "Proposed Development Charge By-Law" (June 17, 1999) from the Chief Financial Officer and Treasurer, viz:

"(1)this report be received for information; and

(2)this report, together with the proposed Development Charge By-law, be forwarded to Planning and Transportation Committee for its review in accordance with Council's direction.".

The motions referred to in 2(f) and (3) above are the subject of concurrent reports from the Commissioner of Urban Planning and Development Services and from the Commissioner of Economic Development, Culture and Tourism, respectively.

Discussion:

The Policy and Finance Committee at its meeting of June 24, 1999, received the report of the Chief Financial Officer and Treasurer "Proposed Development Charge By-Law" (June 17, 1999), which advised with respect to the public meeting and presented a draft development charge by-law. This draft by-law outlined the maximum development charges that may be imposed in accordance with the Act and as determined in the Background Study.

The public meeting provided an opportunity for stakeholders to make their views and concerns regarding the proposed by-law known to the Committee. Through the feedback received at the public meeting, and through a further extensive consultation process subsequent to the public meeting with representatives of the development community, further input was received that assisted staff in preparing the final shape of the City's new development charge by-law.

Many of these concerns refer to general policy issues arising from the implementation of the by-law. These are addressed in the body of this report. Several of the motions of Committee and concerns expressed at the public meeting are specific in nature, and the requested information or staff response are contained in the Appendices of this report.

This report recommends a revised by-law, which gives consideration to the input, comments and concerns expressed by various stakeholders throughout the process. The key issues raised and responded to in the revised by-law are summarized in Table 1 and discussed in the following sections.

Table 1

Key Issues and Revisions to By-law