City-Wide Development Charge By-Law

The Policy and Finance Committee recommends:

(1)the adoption of the report (July 12, 1999) from the Chief Financial Officer and Treasurer, subject to amending Recommendation No. (2) (2.1) by deleting therefrom the word "not", so that Recommendation No. (2) (2.1) now reads as follows:

"(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)the adoption of the report (July 12, 1999) from the Commissioner of Urban Planning and Development Services, wherein it is recommended that the Acting Commissioner of Urban Planning and Development Services expedite the review of the future use of Section 37 of the Planning Act, and such review include consultation with the Urban Development Institute, the Canadian Institute of Public Real Estate Companies, and the Greater Toronto Home Builders Association, as well as other interested stakeholders, and report back to the Planning and Transportation Committee.

The Policy and Finance Committee reports, for the information of Council, having:

(1)referred the following communications to the Chief Financial Officer and Treasurer for report thereon to the Policy and Finance Committee:

(i)(June 22, 1999) from the Commissioner of Corporate Services and City Clerk, Corporation of the City of London; and

(ii)(July 13, 1999) from Mr. Raymond H. Mikkola, Fraser Milner; and

(2)received the following communications:

(i)(July 5, 1999) from Ms. Mary L. Flynn-Guglietti, Goodman and Carr, Barristers and Solicitors;

(ii)(July 5, 1999) from Ms. Mary L. Flynn-Guglietti, Goodman and Carr, Barristers and Solicitors;

(iii)(July 9, 1999) from the President, North York Chamber of Commerce;

(iv)(June 30, 1999) from Mr. Bill Palander, President, Toronto Real Estate Board;

(v)(July 13, 1999) from the Commissioner Economic Development, Culture and Tourism;

(vi)(July 15, 1999) from the City Clerk, advising that the Planning and Transportation Committee on July 12, 1999, received the transmittal letter (June 28, 1999) from the City Clerk and the attached material respecting the proposed development Charge By-law, for information; and

(vii)(July 1, 1999) from the Vice President Development, Bearpoint Group.

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 not-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 Neighbourhood 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.

Development Charge Policy Objectives:

The recommendations contained in this report are based upon a careful balance between the City's objectives and those of the development community. The City's objectives, which were established early in the process, include:

(i)growth ought to pay for itself so that the burden arising from development related capital costs should not fall on existing residents in the form of higher taxation and user fees;

(ii)development charges should be used to mitigate the City's capital pressures and to assist in providing the infrastructure required by future development in the City;

(iii)development charges should be fair and equitable to all stakeholders; and

(iv)development charges should not act as an unnecessary disincentive to growth and development occurring in the City.

Key Policy Issues and Recommendations:

(1)Non-Residential Development:

The revised and recommended by-law does not provide for a charge on non-residential development. There are a number of reasons for arriving at this recommendation:

(i)Toronto's locational advantage for businesses is eroding;

(ii)the property tax burden on Toronto's businesses is about twice that of surrounding municipalities; and

(iii)several fiscal impact studies have concluded that municipalities generate an operating surplus on commercial and industrial development.

Municipal financial policy should not act as an unnecessary deterrent to development nor should it undermine Toronto's competitive position. The development community expressed its concern that the imposition of development charges in Toronto would have a significant impact on the rate of commercial and industrial development in Toronto. These concerns are corroborated in the report of the Commissioner of Economic Development, Culture and Tourism, dated June 13, 1999 (which was before the Committee at the public meeting). That report concluded that no development charges ought to be imposed on commercial and industrial development.

With respect to locational advantages, the report of the Commissioner of Economic Development, Culture and Tourism acknowledged that, compared to other world-class cities, Toronto is not an expensive place to do business, and that firms have historically been willing to pay a premium to locate here. However, there are indications that the location advantage is eroding as suburban locations expand and build the critical mass necessary to offer some of the amenities that were formerly only available in the core. Similarly, twenty years ago places like Newmarket did not have convenient access to a 400 series highway. Provincial government investments to construct, improve and extend highways 400, 401, 403, 404, 407 and 410 have improved the competitive position of the 905 regions relative to Toronto. Telecommunications advances are also eroding some of the advantages of a downtown location.

The City of Toronto is facing increasing competition for commercial and industrial development. Firms have moved from the downtown to the suburbs or have chosen to expand in the suburbs rather than in the City. Commercial and industrial building permit data for the last fourteen years paint a similar picture. The value of commercial and industrial permits in the City of Toronto has not recovered from the recession as quickly as in the surrounding regions, as shown in Figure 1.

Development charges are only one of many municipal-related considerations affecting the business decisions of the land development community. Other considerations include market conditions, demand for their product and expectations of local economic conditions. Property taxation tends to also be a primary consideration in the real estate market.

In 1998, Current Value Assessment (CVA) was implemented across the province. Under this system, in theory, tax rates would be comparable within property classes throughout the province. Under CVA, the significant tax disparity of Toronto's commercial and industrial sectors was accentuated. Toronto's tax rate for these sectors is about twice that of the surrounding municipalities. That is, for two equally valued properties, the property in Toronto would be paying twice as much in property tax. An added cost in the form of a development charge imposed on the commercial and industrial sectors could further erode the City's competitive position in relation to other GTA municipalities. Figures 2 and 3 provide a comparison of Toronto's existing commercial and industrial tax rates with that of its surrounding municipalities.

With respect to fiscal impacts of development, numerous economic impact studies have concluded that municipalities fare much better than break-even on an operating basis on commercial and industrial development. There are several reasons for these conclusions:

(a)there are significant positive externalities associated with commercial and industrial development, the most important of which is job creation. For example, it is likely that the City's social services expenditures would decrease as a result of an industrial employer locating in the City of Toronto rather than elsewhere;

(b)there is strong evidence that commercial/industrial development cross-subsidizes the provision of municipal services to residential ratepayers. Municipal services that are provided directly to property owners such as garbage collection, parks and recreation, libraries, etc., disproportionately benefit residential ratepayers; and

(c)many municipal costs have a fixed cost component. These fixed costs create economies of scale; therefore, the cost of providing municipal services to an additional building is less than the average cost.

Based on Ministry of Finance data, the current value (CVA) of commercial and industrial properties in Toronto was less than 20 percent of the total value of taxable property in the City, yet in 1998 commercial and industrial ratepayers paid 42 percent of property taxes for municipal purposes in Toronto, as shown in Figure 4. In fact, for every additional dollar of new assessment, non-residential properties contribute 4.2 to 6.0 times more in property tax revenue than does residential development. Accordingly, from a fiscal impact perspective, any development charge against non-residential development that may potentially act as a disincentive to growth in that sector is not recommended. For greater detail on the fiscal implications of development charges on the commercial and industrial sectors, refer to the report of the Commissioner of Economic Development, Culture and Tourism dated June 13, 1999.

As a final comment, it should be noted that all of the former municipalities that charged development charges saw it fit not to impose charges on industrial development, and with the exception of North York and Scarborough, on commercial development.

(2)Residential Development and Quantum of the Charge:

Although a number of residential developers have expressed the view that no charge should be imposed on residential development, the recommended by-law continues to support a City-wide charge on residential development for the following reasons:

(i)the tax burden on residential properties compares favourably with the surrounding municipalities, unlike the tax burden on the commercial and industrial sectors;

(ii)the quantum of the charge is significantly lower than the existing and proposed charges of the surrounding municipalities, and in many cases, it amounts to less than one-quarter of their charges; and

(iii)the recommended quantum of the charge does not raise any additional revenue for the City (i.e. based on revenue neutrality).

With respect to residential tax rates under CVA, Toronto's residential tax rate of 1.26 percent of assessment is the lowest rate of any GTA municipality, and 15.0 percent lower than the average GTA residential rate of 1.48 percent. That is, for two equally valued residential properties, the realty taxes on the Toronto property would be on average 15.0 percent lower than that of equal valued property in the GTA. On the basis of property taxation, therefore, Toronto's tax rates would not appear to be a disincentive to residential development in Toronto. Figure 5 provides a comparison of Toronto's tax rate with those of surrounding municipalities.

The recommended quantum of the uniform city-wide residential charge is summarized in Table 2. Figure 6 provides a comparison of the recommended city-wide charge for single and semi-detached dwelling units in Toronto with that of selected GTA municipalities. A comparison of other residential property types yields similar results. It is noted that the rates shown for the surrounding municipalities is the maximum indicated by their respective background studies and each of these Councils may or may not elect to adopt a reduced rate. The final outcome will not be known until the respective Councils make a final decision in this regard. Based on the foregoing comparison, the recommended quantum of the residential charges is considered to be fair and reasonable.

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Table 2

Recommended Quantum of the Residential Development Charge

($ Per Dwelling Unit)

1998 Development Charge Revenue $14,800

The combined proceeds from development charges of the former municipalities amounted to $13.4 million in 1997 and $14.8 million in 1998. The recommended quantum of the residential charge is based on revenue neutrality, and as such, is anticipated to ensure the City receives a development charge revenue stream in the same order of magnitude previously received. Accordingly, the burden placed on development community by imposing the recommended charge remains unchanged and is not considered to be detrimental to residential development.

(3)Phasing and Implementation Issues:

The development community has raised concerns with respect to the imposition of development charges in areas where no previous charge existed (former Toronto, East York and York). These concerns are based upon the proposition that landowners and developers have formulated business plans and made financial decisions on the basis of existing and foreseeable conditions, including municipal financial requirements. The introduction of a new charge which had not been contemplated in their financial proformas will have a significant financial implication on some projects. Staff recognize that these are valid and legitimate concerns, and as such, several measures to cushion the unanticipated impacts of the transition to the new regime are recommended.

In order to ensure an orderly transition, the recommended phasing and implementation of the new development charges is as follows:

(a)any person who submits a complete building permit application prior to March 1, 2000 shall pay the lower of the existing development charges or the fees pursuant to the former City of Toronto Sewage Impost by-law, as the case may be, or the development charges as they have been enacted by City Council;

(b)any person who submits a complete building permit application subsequent to March 1, 2000, and prior to September 1, 2000, shall pay development charges as per column 2 of Table 3;

(c)any person who submits a complete building permit application subsequent to September 1, 2000, and prior to September 1, 2001, shall pay development charges as set out in column 3 of Table 3; and

(d)any person who submits a complete building permit application subsequent to September 1, 2001, shall pay development charges as set out in column 4 of Table 3.

With the recommended two-year phase-in period, the City will have a harmonized City-wide development charge by September 1, 2001.

(4)Section 14 Credits:

Regulations enacted pursuant to the new Act provide that owners may apply to the municipality for a credit towards development charges for payments made pursuant to agreements relating to development. The applications were required to be filed by March 1, 1999 and the City is required to advise the applicants by September 1, 1999 whether the credit is to be recognized or not. Where the municipality does not recognize the credit, the applicant may appeal to the Ontario Municipal Board. The City received 24 credit application requests prior to the March 1, 1999 deadline. A report dated June 14, 1999, from the Commissioner of Urban Planning & Development, the Chief Financial Officer and Treasurer, and the City Solicitor, was before the Committee that makes recommendations with respect to these aforementioned credit applications.

Several deputants expressed concern that their specific development be eligible for development credits. In one case, the deputant indicated that his client inadvertently overlooked the March 1 deadline. As it appears that there may be others in the same situation, staff are recommending that an extension to December 31, 1999 be given for application for Section 14 Credits.

(5)City-Wide verses Area-Specific Charges:

The City is faced with a fundamental policy decision as to whether it wishes to recover development-related capital costs on a localized benefiting area basis or, alternatively, on a uniform City-wide basis. It should be noted that with respect to the delivery of municipal services and the financing of these services through tax and rate policies (water rate, uniform tax rates, hydro rates, service levels, etc.), Council has adopted policies which implicitly recognize that as a unified City, charges, levies and user fees ought to be applied uniformly throughout the City.

Currently, Toronto's existing development charge policy has been inherited unchanged from the seven former municipalities. As a result, it consists of a patchwork of schedules and coverage areas. Where they exist, these development charge coverage areas are "uniform municipal wide" charges with respect to the former municipalities, with three exceptions:

(i)former North York Yonge Centre;

(ii)former North York Sheppard Subway Area; and

(iii)former Etobicoke Motel Strip.

A substantial majority of Ontario municipalities operate with a uniform, municipal-wide development charge policy for a number of reasons, including:

(1)many services, including roads, treatment plants and City-wide parks, provide services on a municipal-wide basis and are therefore best funded on that basis. The service areas for recreation facilities, fire halls and other services are not readily definable, as they draw users from, or provide services to, a wide and variable area;

(2)once boundaries have been defined for area-specific charges, those on the higher charge side of any particular boundary may be encouraged to appeal the policy in order to modify the location of the line, or the amount of the charge. As a result, area-specific charges are more contentious, subject to appeal and difficult to defend and administer;

(3)once a municipality has opted in favour of establishing some area-specific charges, it must deal with appeals to create new, smaller, differently configured areas. This, in turn, involves making decisions as to the treatment of sunk costs (i.e. oversizing) vs. future costs, as well as whether to charge in accordance with development potential vs. actual development as it occurs, in an attempt to achieve full cost recovery;

(4)when the City changes the timing, cost or nature of its servicing plan in any given area over time, this would potentially create the immediate need to revise area-specific charges and/or to make refunds for monies collected;

(5)the use of area-specific development charge collections is restricted to the specific purpose for which the collections were made, which reduces the City's flexibility to fund new works from a consolidated reserve fund, early in the period;

(6)with area-specific charges, the quantum of the charge will be less readily apparent to landowners and staff would have to tabulate and explain charges based on overlapping coverage areas for various services;

(7)applying the complexities of the DCA to individual areas would be much more time-consuming and contentious than doing so for the City as a whole; and

(8)the charge, in some areas, may be so high as to discourage development.

The advantage of area-specific charges which relates primarily to the fairness in directing the "true cost" of development to each area of development, is judged in this particular case, to be significantly outweighed by the factors noted above.

While some stakeholders have expressed the view that development charges should be area specific, an industry-wide proposal as to defining boundaries for the new charges has yet to be submitted.

Arguments have also been made regarding the imposition of development charges in the former City of Toronto, and particularly in the core, which did not previously have development charges. Some have suggested excluding the downtown core from development charges.

The by-law proposes a reduction in the quantum of the residential development charge so as to raise approximately the same amount of development charge revenue as was raised in the past. The total amount of financial burden imposed on the development community will not therefore exceed that which was required in previous years. Furthermore, in areas where the charge previously existed, a more generous grandfathering and phase-in of the new charge is proposed. These measures will provide a orderly transition to the new development charge regime, will cushion the impacts on those who had not anticipated the new charge and further provide a reasonable time-frame for developers to capitalize the new charges into pre-development land values.

Moreover, the fiscal impact analysis for residential development (see Appendix B) suggests that the servicing costs for new residential development can exceed the anticipated annual property tax revenue from the new development, particularly for moderately priced condominiums that are growing in popularity in the downtown core.

The arguments for area-specific charges, and more specifically a discount of the city-wide charge in the downtown core, have not outweighed the benefits of a uniform city-wide development charge. The revised and recommended by-law provides for a city-wide schedule of charges.

(6)Affordable Housing:

This report recommends that Council confirm an intention to encourage affordable housing through a development charge exemption or rebate. Several barriers and complications exist in implementing this. In the short term, an exemption can be provided to not-for-profit owners/developers and to projects developed with City assistance. In the medium to longer term, legislative amendments should be sought to enable a broader exemption or rebate.

The draft by-law presented at the public meeting did not provide any exemption for "affordable housing" as it was felt that the definition of affordable in itself would not be sufficient to ensure that the proposed housing would meet Council's "affordability" criteria and that affordable rental housing would ultimately be produced. It was also felt that a general definition may present other implementation problems, such as maintaining the units as rental units, and maintaining the rents at affordable levels once the units have been exempted from development charges.

Nonetheless, a development charges exemption for housing developments "that meet affordability criteria" was recommended by the Homelessness Action Task Force. The exemption proposed by the Task Force is one of several steps intended to reduce the cost of developing rental housing. Other obstacles in the creation of affordable rental housing include other City fees and charges, land in some cases, federal GST and provincial sales tax (PST). None of these on its own "solves" the viability problem, but together they make a considerable difference. The Province announced in March a program to rebate PST, involving per-unit savings similar to development charges. The City has adopted a "housing first" policy for municipal land (which could lead to reduced or deferred land costs in some cases), a new multi-residential assessment class, and waived fees in some cases.

The Development Charges Act, 1997, permits "full or partial exemptions for types of development"; the "types" may be determined by each municipality as long as clear rules are set.

Staff have been developing options for defining "affordable housing" for the purposes of, among other things, the development charges exemption, the Official Plan and assistance from the Capital Revolving Fund. Broadly, some possible definitions could be in terms of household income, initial price or rent, ongoing affordability, unit size, tenure, objects of the firm or agency developing or owning the project, and/or the project receiving other assistance. Legal or administrative barriers exist to implementing many of these.

A viable option is to use a criterion relating to the objects of the firm or agency developing or owning the project; specifically, development by non-profit corporations could be exempted. Likewise, receipt of City assistance is a viable criterion, although for-profit corporations would not currently be eligible. There is a reasonable basis for classifying not-for-profit development as a "type of development" under the Development Charges Act, based on the role of non-profit corporations in operating social housing with large numbers of below-market or geared-to-income units. The same applies to developments receiving other City assistance (such as through the Capital Revolving Fund or via a lease of City land). When applying for a building permit, applicants can submit information, such as copies of articles of incorporation, which would permit staff to make a determination of non-profit status or receipt of other City assistance. The proposed development charges by-law accompanying this report provides for such an exemption.

Private corporations should also be eligible for an exemption or rebate where they are developing affordable housing. The focus of staff discussions on defining "affordable housing" has been on units affordable to the lower half, more or less, of the GTA tenant income distribution, which implies rents near to or lower than average market rents by unit size. This is a lower price and income band than the vast majority of affordable low-end condominium projects, which generally provide studio or one-bedroom units affordable at about $40,000.00 income or higher. However, provincial enabling legislation will be required for a rental exemption, for a rebate to for-profit developers, and possibly for other aspects of a broader exemption or rebate. Discussions have been initiated with staff of the Ministry of Municipal Affairs and Housing on a "toolbox" (non-financial) for the City to use in pursuing housing objectives. This report recommends that the province be requested to enact such enabling legislation.

Additional information respecting issues and approaches to affordable housing is contained in Appendix D.

(7)Stormwater Quality Management:

The Background Study provides a cash-in-lieu calculation for stormwater quality as means of securing funds to provide stormwater quality controls and treatment to address quality impacts caused by development, where implementing controls on an individual development site is not feasible. Some concern was raised by the development community with regards to the calculation of the cash-in-lieu charge in the areas of the runoff area and coefficient determination, and the rationale for the capital cost factor. Furthermore, while the City has undertaken a study to produce a Wet Weather Master Plan, which will act as a framework to address stormwater quality issues, the City does not currently have a comprehensive stormwater policy or a ten-year service standard upon which to base such a charge. Given these issues, it is considered premature to include a stormwater quality charge in the proposed by-law at this time.

(8)Childcare Facilities:

The Policy and Finance Committee had before it a communication from the Children and Youth Action Committee dated June 17, 1999 to explore funding options for childcare facilities including the use of development charges. The Development Charges Act, 1997 requires that the ten-year average level of service must be taken into consideration in the calculation of a development charge that can be levied by a municipality. In this determination, both the quality and the quantity of the service must be taken into account. Under the legislation in its current form, childcare facilities are ineligible for development charge funding due to a lack of a municipally funded capital program over the previous ten year period and the absence of a five to ten-year capital program.

This report recommends that Council request the province to confirm that the DCA, 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.

(9)Other Provisions in the Proposed By-law:

The proposed by-law imposes development charges on residential development based on the rates set out earlier in this report. Further, the by-law proposes that development charges be payable as of the date a building permit is issued, with minor exceptions. Council may also enter into an agreement with an owner to provide that all or any part of the development charge may be paid before or after it would otherwise be payable.

The proposed by-law also provides that, where an agreement was entered into by a former municipality that had development charges (Etobicoke, North York and Scarborough), these charges are to be credited on a pro rata basis against the development charge applicable under the proposed by-law. Council may also, by agreement, provide a credit to an owner against all or part of the development charge payable in respect of a development by the provision of work that relates to a service which the City would otherwise provide as part of its capital program. The credit is equal to the reasonable cost to the owner of providing the work or service, provided that the credit shall not exceed the total amount of the development charge payable with respect to that service.

Certain exemptions are also provided for in the proposed by-law. These include exemptions for intensification of existing housing and enlargements of existing industrial buildings as required by the Act. In addition, the by-law provides for an exemption from development charges for one additional residential unit in a new single detached dwelling or semi-detached dwelling unit in line with Council's recent second suite initiative. There are a number of other exemptions for development not exceeding ten square metres of gross floor area, public hospitals, colleges and universities, land owned by the City or the Board of Education, dwelling rooms (i.e., rooming houses), places of worship and cemeteries and burial grounds. In addition, an exemption is to be given where an agreement entered into by a former municipality expressly exempted the lands, buildings or structures from development charges.

The proposed by-law also provides for certain redevelopment credits. This provision allows for an owner to claim a credit against the development charge otherwise payable where an existing structure is to be demolished.

 (10)Sewer Impost By-law of the former City of Toronto:

Although the former City of Toronto did not collect charges pursuant to a development charge by-law, City of Toronto Municipal Code Chapter 292, Article II imposes a sewage impost fee of $0.70 per square feet for townhouses, apartments, and non-residential floor area. As sanitary sewer and wastewater infrastructure will now be included services within the development charge by-law, the imposition of a sewage impost fee represents a duplication of charges which is not permitted pursuant to the Act. Should Council adopt the proposed development charge by-law, the City Solicitor should be directed to take the appropriate action to repeal the sewage impost provision contained in the Toronto Municipal Code.

(11)Motions of the Policy and Finance Committee:

As noted previously, a number of motions were adopted at the meeting of the Policy and Finance Committee at its meeting on June 24, 1999. Some of the directions have been responded to in the body of this report. Others which are described below are specific in nature and accordingly are addressed, to the greatest extent possible, in the appendices of attached to this report. These include:

(a)Appendix A which responds to motion no. 1 requesting that the Chief Financial Officer and Treasurer report on the submissions made by the deputants at the June 24^th meeting;

(b)Appendix B which responds to motions no. 2(a), (b) and (e)(I) - (v) requesting that the Chief Financial Officer and Treasurer report on the fiscal implications to the City of development and other related matters;

(c)Appendix C which responds to motion no. 2© requesting the Chief Financial Officer and Treasurer to report on the area-specific charges used in Richmond Hill;

(d)Appendix D which responds to motion no. 2(d) requesting that the Chief Financial Officer and Treasurer, in consultation with the Commissioner of Community and Neighbourhood Services and the City Solicitor, report on the recommended development charge approach that maintains City policy with respect to affordable housing; and

(e)Appendix E which responds to motion no. 2(e)(vi) requesting that the Chief Financial Officer and Treasurer provide a comparison of development activity between the former municipalities that had development charges and those that did not, particularly in the former City of York where such charges were waived.

Conclusions:

This report summarizes the terms and conditions of the revised and recommended development charge by-law, and addresses the key policy issues. The feedback received at the public meeting on June 24, 1999, and throughout the consultation process with representatives of the development industry, has been invaluable in assisting staff in establishing the final shape of the City's new development charge by-law.

The Development Charges Background Study, updated to June 9, 1999, sets out the maximum development charge that can be imposed upon residential and non-residential development. Various stakeholders and staff from the City's Economic Development Department have expressed concern that the one-time funding potential from charges imposed upon new development runs the risk of reducing the rate of development in the commercial and industrial sectors, whose property tax rates are significantly higher than that of any surrounding municipality.

The revised by-law recommends imposing development charges only on new residential development. The projected average annual development charge 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 charges of the former municipalities in 1998.

In addition to the type of development for which development charges are to be imposed, other key policy issues included the quantum of the charge, transition provisions, Section 14 credits, city-wide verses area-specific charges, affordable housing and section 37 agreements.

With respect to the quantum of the residential development charge, the recommended by-law prescribes a charge at 78.2 percent of the maximum charge calculated in accordance with the Act. This quantum produces revenue neutrality for the City in relation to the development charge revenue garnered in previous years and achieves a harmonization of a charge citywide.

With respect to transition provisions, the revised and recommended by-law provides for a two-year phasing-in period to the new development charge, which will result in a harmonized city-wide charge by September 1, 2001. The by-law also extends the grandfathering provision to March 1, 2000, to ensure those development applications in process are not faced with an unanticipated financial impact. The purpose of these provisions is to ensure an orderly transition to the new development charge regime as well as provide a modest incentive for development to proceed expeditiously.

With respect to affordable rental housing, the recommended by-law provides for an exemption from development charges for housing developed by non-profit corporations, and, subject to the bonusing restrictions of the Municipal Act, to housing developed with capital or land-lease assistance from the City. It is also recommended that the Province be petitioned to permit development charge 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.

Clarification of the application of Section 37 agreements was also an issue. Section 37 of the Planning Act is a separate and distinct tool available to municipalities with respect to development, whereby an exchange occurs between a developer and the City, of extra density for specific facilities or benefits. It is intended that there be a clear separation between Section 37 contributions and development charges. A clarification of the application of Section 37 agreements is the subject of a concurrent report.

The Act provides for owners to apply for a credit towards development charges for payments made pursuant to agreements related to development. The City has received 24 credit applications prior to the legislated deadline of March 1, 1999. As it appears that some developers may have overlooked the March 1 deadline, staff are recommending and extension of the credit notice to December 31, 1999.

The contents and policies embodied in the proposed by-law and in this report have been formulated in consultation with the appropriate Department Heads.

Contact Names:

Joe Farag, Director, Development, Policy and Research, Finance Department, 392-8108;

Barbara Leonhardt, Director, Policy and Research, City Planning, 392-8148;

Anna Kinastowski, Director, Planning and Administrative Tribunal Law, Legal Department,

392-0080;

Brenda Librecz, Managing Director, Economic Development Division, 397-4700; and

Joanne Campbell, General Manager, Shelter, Housing and Support Services, 392-7885.

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Authority: Policy and Finance Committee Report No. , Clause ,

as adopted by City of Toronto Council on July 27, 28 and 29, 1999

Enacted by Council:

City of Toronto

By-law No.

Being A By-law Respecting Development Charges

Whereas the City of Toronto has and will continue to experience growth through development;

And Whereas development requires the provision of physical infrastructure and other services by the City;

And Whereas the Development Charges Act, 1997, S.O. 1997, c.27 (the "Act"), authorizes Council to pass by-laws for the imposition of development charges against land;

And Whereas Council desires to ensure that the capital cost of meeting development related demands for, or the burden on, City services does not place an undue financial burden on the City or its existing taxpayers while, at the same time, ensuring new development contributes no more than the net capital cost attributable to providing the historic level of services and meeting the requirements of section 5(1) of the Act;

And Whereas the City has undertaken a study of, among other matters, the matters raised in section 10 of the Act and section 8 of O.Reg 82/98, services, service levels, expected development, development-related facilities and the costs thereof;

  And Whereas Council at its meeting dated May 11, 12 and 13, 1999, had before it a report entitled "City of Toronto Development Charge Background Study" prepared by C.N. Watson & Associates Ltd. dated April 19, 1999 (the "Study);

And Whereas Council at its meeting held on May 11, 12 and 13, 1999 directed that the meeting pursuant to Section 12 of the Act be held at the Policy and Finance Committee;

And Whereas the Study was made available to the public at least two weeks prior to the public meeting and Council gave more that twenty days notice to the public and a meeting pursuant to section 12 of the Act was held on June 24, 1999 before the Policy and Finance Committee, prior to and at which the Study, the Addendum to the Study dated June 9, 1999 and the proposed development charge by-law were made available to the public and Committee heard comments and representations from all persons who applied to be heard;

And Whereas Policy and Finance Committee at its meeting held on July 20, 1999, further considered the Study, the Addendum to the Study and a staff report dated July **, 1999 which responded to the comments and representations from the persons heard at the public meeting.

And Whereas Council in adopting Clause of Report No. of the Policy and Finance Committee at its meeting held on , 1999, has indicated that it intends to ensure that the increase in the need for services attributable to the anticipated development will be met by approving a capital forecast including the works underlying the development charge calculation;

And Whereas Council, on , 1999 held a meeting open to the public, at which Council considered the Study, the Addendum to the Study, reports from City staff and written submissions from the public;

Now Therefore The Council of the City of Toronto Hereby Enacts as Follows:

Definitions:

(1)In this by-law, and including the recitals and schedules hereto,

(1)"accessory use" means that the building or structure is naturally and normally incidental to or subordinate in purpose or both, and exclusively devoted to a principal use, building or structure;

(2)"apartment unit" means any residential dwelling unit within a residential building, or the residential portion of a mixed use building, where such unit is accessed through a common entrance or entrances from the street level and an interior corridor, and the building contains three or more units with such access;

(3)"bachelor unit" means a residential unit consisting of a self-contained living area in which culinary and sanitary facilities are provided for the exclusive use of the occupant but not including a separate bedroom;

(4)"bedroom" means any room used or designed or intended for use as sleeping quarters but does not include a living room, dining room, kitchen or one area to be used as a den, study or other similar area;

(5)"board of education" has the same meaning as that specified in the Education Act or any successor legislation;

(6)"Building Code Act" means the Building Code Act, 1992, S.O. 1992, c.23, as amended or any successor legislation;

(7)"building permit" means a permit issued pursuant to the Building Code Act which permits the construction of all buildings and structures above grade.

(8)"capital cost" has the same meaning it has in the Act;

(9)"Chief Building Official" means a chief building official appointed or constituted under section 3 of the Building Code Act;

(10)"City" means City of Toronto;

(11)"complete building permit application" means an application submitted to the Chief Building Official for either a foundation and/or full building permit which complies with all technical requirements of the Building Code Act and includes the payment of all applicable fees;

(12)"Council" means the Council of the City of Toronto;

(13)"development" means any activity or proposed activity in respect of land that requires one or more of the actions referred to in section 9 of this by-law and includes a trailer or mobile home park, the redevelopment of land or the redevelopment, expansion, extension or alteration, or any two or more of them, of a use, building or structure, except interior alterations to an existing building or structure which do not intensify the use of the building;

(14)"development charge" means a charge imposed pursuant to this by-law;

(15)"dwelling unit' means living accommodation comprising a single housekeeping unit within any part of building or structure used, designed or intended to be used by one person or persons living together, in which both culinary and sanitary facilities are provided for the exclusive use of such person or persons;

(16)"dwelling room" means a room used or designated for human habitation and may include either but not both culinary or sanitary conveniences, but does not include:

(I)a room in a hotel, in a dwelling unit or in a tourist or guest home;

(ii)a bathroom or kitchen; or

(iii)a windowless storage room that has a floor area of less than 10 square metres;

(17)"Former Municipalities" means the former Municipality of Metropolitan Toronto, the former Cities of Etobicoke, North York, Scarborough, Toronto and York and the former Borough of East York as they existed on December 31, 1997;

(18)"grade" means the definition provided for in the zoning by-law applicable to the Former Municipality in which the development is located at the time the complete building permit application is submitted to the Chief Building Official;

(19)"gross chargeable area" means in the case of a non-residential building or structure, or in the case of a mixed-use building or structure in respect of the non-residential portion thereof, the total area of all building floors above or below grade measured between the outside surfaces of the exterior walls, or between the outside surfaces of exterior walls and the centre line of party walls dividing a non-residential use and a residential use, except for:

(I)a room or enclosed area within the building or structure above or below grade that is used exclusively for the accommodation of heating, cooling, ventilating, electrical, mechanical or telecommunications equipment that service the building;

(ii)loading facilities above or below grade; and

(iii)a part of the building or structure below grade that is used for the parking of motor vehicles or for storage or other accessory use.

(20)"gross floor area" means in the case of a dwelling unit the total area of all floors above grade measured between the outside surfaces of exterior walls or between the outside surfaces of exterior walls and the centre line of party walls dividing the dwelling unit from any other dwelling unit or other portion of a building;

(21)"local board" has the same meaning as defined in the Act;

(22)"mobile home" means any dwelling that is designated to be made mobile, and constructed or manufactured to provide a permanent residence for one or more persons, but does not include a travel trailer or tent trailer;

(23)"multiple dwelling unit" means all dwellings units other than single detached, semi-detached and apartment units and includes row dwellings and townhouses;

 (24)"non-profit housing" means housing which is or is intended to be offered primarily to persons or families of low income on a leasehold or co-operative basis and which owned or operated by:

(i)a non-profit corporation being a corporation, no part of the income of which is payable to or otherwise available for the personal benefit of a member or shareholder thereof; or

(ii)a non-profit housing co-operative having the same meaning as in the Co-operative Corporations Act, R.S.O. 1990, c. C.35, as may be amended from time to time.

(25)"owner" means the owner of land or a person who has made application for an approval of the development of land against which a development charge is imposed;

(26)"party wall" means a wall jointly owned and jointly used by two parties under an easement agreement or by right in law and erected at or upon a line separating two parcels of land each of which is, or is capable of being, a separate real estate entity;

(27)"place of worship" means that part of a building or structure that is exempt from taxation as a place of worship under the Assessment Act, as amended or any successor legislation;

(28)"residential use" means land or building or structures of any kind whatsoever or any portion thereof, used, designated or intended to be used as living accommodations for one or more individuals and includes a unit designated for combined live/work uses;

(29)"semi-detached dwelling" means a residential building consisting of two dwelling units having one vertical wall or one horizontal wall, but no other parts, attached to another dwelling unit where the dwelling units are not connected by an interior corridor;

(30)"services" (or "service") means those services designated in Section 4 to this by-law;

(31)"single detached dwelling unit" and "single detached" means a residential building consisting of one dwelling unit and not attached to another structure used for residential uses or purposes and includes mobile homes;

Designation of Services:

(2)It is hereby declared by the Council of the City that all development of land within the City will increase the need for services.

(3)Once this by-law is in force, the development charge applicable to a development as determined under this by-law shall apply without regard to the services required or used by any individual development.

(4)Development charges shall be imposed for the following categories of services to pay for the increased capital costs required because of increased needs for services arising from development:

(i)roads;

(ii)sanitary sewerage;

(iii)water works;

(iv)fire;

(v)library;

(vi)parks and recreation;

(vii)transit; and

(viii)development-related studies.

Application of By-law - Rules:

(5)For the purpose of complying with section 6 of the Act, rules have been developed and are provided for in this by-law as follows:

(a)the rules for determining if a development charge is payable in any particular case and for determining the amount of the charge shall be in accordance with sections 7 through 35 of this by-law;

(b)the rules for determining the exemptions shall be in accordance with sections 11 through 14 of this by-law;

(c)the rules for determining the indexing of development charges shall be in accordance with section 27 of this by-law;

(d)the rules for determining the phasing in of development charges shall be in accordance with sections 32 and 33 of this by-law;

(e)the rules respecting the redevelopment of land shall be in accordance with section 16 of this by-law;

(f)the area to which this by-law applies shall be the area described in section 7 of this by-law.

(6)Development charges shall be payable in the amounts set out and phased in accordance with Sections 32 and 33 and Schedule A , where the lands are located in the area described in section 7 and the development of the lands requires any of the approvals set out in section 9.

Areas to which By-law applies:

(7)This by-law applies to all lands in the geographic area of the City whether or not the land or use is exempt from taxation under section 3 of the Assessment Act.

(8)This by-law shall not apply to lands that are owned by and used for the purposes of:

(a)the City or a local board thereof; and

(b)a board of education.

Approvals for Development:

(9)Development charges shall be imposed on all lands, buildings or structures that are developed for residential development if the development requires:

(a)the passing of a zoning by-law or of an amendment to a zoning by-law under section 34 of the Planning Act;

(b)approval of a minor variance under section 45 of the Planning Act;

(c)a conveyance of land to which a by-law passed under subsection 50(7) of the Planning Act applies;

(d)the approval of a plan of subdivision under section 51 of the Planning Act;

(e)a consent under section 53 of the Planning Act; and

(f)the issuing of a permit under the Building Code Act in relation to a building or structure.

(10)No more than one development charge for each service designated in section 4 shall be imposed upon any lands, buildings or structures to which this by-law applies even though two or more of the actions described in section 9 are required before the lands, buildings or structures can be developed.

Exemptions:

Exemptions for Intensification of Housing:

(11)This by-law does not apply with respect to the creation of

(a)an enlargement to an existing dwelling unit;

(b)one or two additional dwelling units in an existing single detached dwelling or semi-detached dwelling;

(c)one additional dwelling unit in any other existing residential building; or

(d)one additional dwelling unit in a new single detached dwelling or semi-detached dwelling.

(12)Notwithstanding section 11, development charges shall be imposed if the total gross floor area of the additional one or two units exceeds the gross floor area of the existing single detached dwelling unit.

(13)Notwithstanding section 11, development charges shall be imposed if the additional unit in an existing dwelling unit has a gross floor area greater than;

(a)in the case of a semi-detached or row dwelling, the gross floor area of the existing dwelling unit; and

(b)in the case of any other residential building, the gross floor area of the smallest dwelling unit contained in the residential building.

Other Exemptions:

(14)Notwithstanding the provisions of this by-law, development charges shall not be imposed with respect to:

(a)development creating or adding an accessory use or accessory structure not exceeding 10 square metres of gross floor area;

(b)a public hospital receiving aid under the Public Hospitals Act, colleges and universities established pursuant to the Ministry of Colleges & Universities Act and used for the purposes set out in the respective legislation;

(c)dwelling rooms located within a building or structure but does not include apartment units, bachelor units or dwelling units;

(d)lands, buildings or structures which are the subject of an agreement entered into by a former Municipality which agreement in words expressly exempted the lands, buildings or structures from development charges;

(e)lands, buildings or structures used or to be used for a place of worship or for the purposes of a cemetery or burial ground; and

(f)non-profit housing.

Amount of Charge:

Residential:

(15)The development charges described in Schedule A to this by-law shall be imposed on residential uses of lands, buildings or structures, including a dwelling unit accessory to a non-residential use and, in the case of a mixed use building or structure, on the residential uses in the mixed use building or structure, according to the type of residential unit, and calculated with respect to each of the services according to the percentage of charge by service set out in Schedule B to this by-law.

Redevelopment:

(16)Notwithstanding any other provision of this by-law, where, as a result of the redevelopment of land, a demolition permit has been issued within the thirty-six months previous to the submission of a complete building permit application with respect to the whole or a part of a building or structure existing on the same land, or a building or structure is to be converted from one principal use to another principal use on the same land, the development charges otherwise payable with respect to such redevelopment shall be reduced by the following amounts:

(a)in the case of a residential building or structure, or the residential uses in a mixed-use building or structure, an amount calculated by multiplying the applicable development charge under section 15 of this by-law by the number, according to the type of dwelling units that have been or will be demolished or converted to another principal use; and

(b)in the case of a non-residential building or structure or the non-residential uses in a mixed-use building or structure, the amount of two dollars and twenty-seven cents ($2.27) multiplied by the gross chargeable area that has been or will be demolished or converted to a residential use;

provided that such amounts shall not exceed, in total, the amount of the development charges otherwise payable with respect to the redevelopment.

Calculation and Payment of Development Charges:

(17)(a)Development charges applicable to residential development shall be calculated, payable and collected as of the date a building permit is issued in respect of the building or structure for the use to which the development charge applies, unless the development charge is to be paid at a different time pursuant to sections 19 or 20 herein or pursuant to an agreement entered into between the City and the owner under subsection 27(1) of the Act.

(b)Notwithstanding the provisions of this by-law, where a complete building permit application has been received by the Chief Building Official prior to September 1, 2001, the development charges applicable to residential development shall be calculated as of the date of the complete building permit application and shall be payable and collected as of the date a building permit is issued in respect of the building or structure for the use to which the development charge applies.

(18)Notwithstanding section 10, if two or more of the actions described in section 9 occur at different times, additional development charges shall be imposed in respect of any increased or additional dwelling units permitted by that action.

(19)Notwithstanding section 17, Council may enter into an agreement with any person who is required to pay a development charge providing for all or any part of the development charge to be paid before or after it would otherwise be payable.

(20)(a)Notwithstanding section 17, the development charge with respect to water works, sanitary sewerage and roads to be calculated in accordance with the percentage by service set out in Schedule B, shall be payable, with respect to an approval of a plan of subdivision pursuant to section 51 or a consent pursuant to section 53 of the Planning Act, immediately upon the parties entering into a subdivision agreement or a consent agreement;

(b)The outstanding balance of the development charge applicable to residential development with respect to a plan of subdivision or a consent application as the case may be, shall be calculated, payable and collected at the rate in effect on the date a building permit is issued in respect of the building or structure for the use to which the development charge applies.

(c)Where pursuant to an agreement entered into by a former Municipality which required payments pursuant to a by-law of the former Municipality enacted pursuant to the Development Charges Act, R.S.O. 1990, Ch. D9, unless the agreement provides otherwise, any payment of the development charge pursuant to the agreement shall be a pro rata credit against the outstanding balance of the development charge applicable to residential development which shall be calculated on a pro rata basis, payable and collected as of the date a building permit is issued in respect of the building or structure for the use to which the development charge applies provided that the amount of any such credit shall not exceed, in total, the amount of the development charge otherwise payable.

(d)Where pursuant to an agreement entered into by a former Municipality which required the provision of work pursuant to the Development Charges Act, R.S.O. 1990, Ch. D, relating to a service set out in section 4, unless the agreement provides otherwise, the provision of services pursuant to the agreement shall be a pro rata credit equal to the reasonable cost to the owner of providing the work or service, against the balance of the development charge applicable to residential development which shall be calculated on a pro rata basis, payable and collected as of the date a building permit is issued in respect of the building or structure for the use to which the development charge applies provided that the amount of any such credit shall not exceed the total amount of the development charge payable with respect to that service applicable to that development and calculated in accordance with the percentages set out in Schedule B.

(21)Where a development charge or any part of it remains unpaid after it is payable, the amount unpaid shall be added to the tax roll and shall be collected in the same manner as taxes.

(22)For the purpose of the calculation and collection of development charges pursuant to this by-law, where the provisions of this by-law conflict with or differ from the provisions of zoning by-laws of the former Municipalities, the provisions of this by-law shall be applied except that the definition of "grade" as defined in section 1(r) shall prevail.

Payment by Services:

(23)Notwithstanding the provisions of this by-law, Council may, by written agreement, provide a credit to an owner against all or part of the development charge payable in respect of a particular development by the provision of work that relates to one or more of the services referred to in section 4 , provided such work or services are at a standard that is equal to but not greater than the standard for the equivalent service for which a development charge is payable hereunder. Such agreement shall provide for a credit equal to the reasonable cost to the owner of providing the work or service, provided that the credit shall not exceed the total amount of the development charge payable with respect to that service and calculated in accordance with Schedule B applicable to that development.

(24)If the City and the owner cannot agree as to the reasonable cost of doing the work under sections 20d) and 23, the dispute shall be referred to the appropriate City Commissioner having operational responsibility for the service being provided.

(25)Nothing in this by-law prevents Council from requiring, as a condition of any approval given under the Planning Act that the owner, at the owner's expense, install such local services and local connections as Council may require and are related to the development.

Front Ending Agreements:

(26)Council may enter into front ending agreements with an owner or owners of land in accordance with section 44 of the Act.

Indexing:

(27)The development charge set out in Schedule A shall be adjusted by the City Treasurer without amendment to this by-law annually on September 1, commencing on September 1, 2002, in accordance with the most recent annual change in the Statistics Canada Quarterly Construction Price Statistics, Catalogue Number 62-007. For greater certainty, Catalogue 62-007-XPB should be referred to. With respect to the new housing price indice, Table 4.1 (Toronto-House only) shall be used and with resect to apartment construction, Table 5.1 (Toronto) shall be used.

Schedules:

(28)The following schedules to this by-law form an integral part thereof:

Schedule A - Residential Development Charges and Phase In Provisions

Schedule B - Residential Development Charge Expressed as a Percentage of Charge by Service

Headings for Reference Only:

(29)The headings inserted in this by-law are for convenience of reference only and shall not affect the construction or interpretation of this by-law.

Severability:

(30)If, for any reason, any provision, section, subsection or paragraph of this by-law is held to be invalid, it is hereby declared to be the intention of Council that all the remainder of this by-law shall continue in full force and effect until repealed, re-enacted or amended, in whole or in part or dealt with in any other way.

Date By-law in Force, Phasing of By-law and Term of By-law:

(31)This by-law shall come into force on September 1, 1999.

(32)The development charge calculated, payable and collected pursuant to this by-law shall be phased in accordance with Schedule A.

(33)Notwithstanding the provisions of this by-law, where a complete building permit application has been submitted to the Chief Building Official prior to March 1, 2000, the development charge calculated, payable and collected shall be the lesser of:

(I)the charge calculated, payable and collected pursuant to this by-law; or

(ii) the charge otherwise calculated, payable and collected pursuant to By-laws 1995-164 and 1995-165 of the former City of Etobicoke, By-laws 31597 and 31598 of the former City of North York and By-law 141-97 of the former Municipality of Metropolitan Toronto, By-laws 24630 and 24646 of the former City of Scarborough or the sewage impost by-law as provided for under the former City of Toronto Municipal Code Chapter 292, Article II as the case may be and as may have been amended.

(34)This by-law shall continue in full force and effect for a term not to exceed five (5) years from the date of its enactment, unless it is repealed at an earlier date.

Additional Development Charges:

(35)Additional Development Charges may be imposed pursuant to other by-laws.

Enacted And Passed this day of July, 1999

MayorCity Clerk

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Schedule ''A''

City of Toronto

Residential Development Charges + Phase in Provisions

Residential Development Charge Per Dwelling Unit

Sept 01, 1999 Sept 01, 2000 After

Former Municipality/ Category- Aug 31, 2000- Aug 31, 2001Sept 01, 2001

Single and Semi-Detached

East York1,3042,6083,912

Etobicoke - City Wide3,1603,5363,912

Etobicoke - Motel Strip3,5813,7473,912

North York - City Wide3,9123,9123,912

North York - City Centre3,9123,9123,912

North York - Sheppard Subway Corridor3,9123,9123,912

Scarborough3,9123,9123,912

Toronto1,3042,6083,912

York1,3042,6083,912

Sub-Total

Other Multiples

East York1,0572,1153,172

Etobicoke - City Wide2,6812,9263,172

Etobicoke - Motel Strip3,0423,1073,172

North York - City Wide3,1723,1723,172

North York - City Centre3,1723,1723,172

North York - Sheppard Subway Corridor3,1723,1723,172

Scarborough3,1723,1723,172

Toronto1,6172,3953,172

York1,0572,1153,172

Apartment 2 Bdrm & Larger

East York 8811,7632,644

Etobicoke - City Wide2,2212,4332,644

Etobicoke - Motel Strip2,5232,5832,644

North York - City Wide2,5132,5792,644

North York - City Centre2,6442,6442,644

North York - Sheppard Subway Corridor2,6442,6442,644

Scarborough2,6442,6442,644

Toronto1,3481,9962,644

York 8811,7632,644

Apartment 1 Bdrm & Bachelor

East York 5641,1281,692

Etobicoke - City Wide1,5791,6361,692

Etobicoke - Motel Strip1,6921,6921.692

North York - City Wide1,6921,6921,692

North York - City Centre1,6921,6921,692

North York - Sheppard Subway Corridor1,6921,6921,692

Scarborough1,6921,6921,692

Toronto 9141,3031,692

York 5641,1281,692

Note: Charges to be Indexed in Accordance With By-Law

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Schedule "B"

Residential Development Charge Expressed

As A Percentage of Charge by Service

(A List of Appendices A to E appended to the foregoing by-law, was forwarded to all Members of Council with the July 20, 1999, agenda of the Policy and Finance Committee and a copy thereof is also on file in the office of the City Clerk).

The Policy and Finance Committee also submits the following report (July 12, 1999) from the Commissioner of Urban Planning and Development Services:

Purpose:

To respond to your Committee's request for a further report respecting Section 37 of the Planning Act in the context of development charges.

Source of Funds:

Not applicable.

Recommendation:

That the Acting Commissioner of Urban Planning and Development Services expedite the review of the future use of Section 37 of the Planning Act, and such review include consultation with the Urban Development Institute, the Canadian Institute of Public Real Estate Companies, and the Greater Toronto Home Builders Association, as well as other interested stakeholders, and report back to the Planning and Transportation Committee.

Executive Summary:

Council has a broad responsibility to provide social stability, a high quality of life and a good environment in order to sustain economic growth. This is not a simple goal which can be achieved over night with simple solutions. A community as diverse as the new City of Toronto must equip itself with as many tools as possible to address the complicated issues confronting the City as it strives for economic growth, but the list of available planning tools is short.

Council is considering the implementation of development charges as a city-wide, highly structured tool to address growth-related demands placed on it by new development. As Development Charges have a targeted purpose, Council must find other means, short of raising taxes, to address and finance existing service deficiencies and other municipal objectives. The only significant planning tool available to the City is the ability to secure facilities and financial contributions pursuant to Section 37 of the Planning Act.

Section 37 is a separate tool, distinct from development charges in that it relates only to securing public benefits in exchange for increases in height and/or density negotiated with developers as part of the planning approval process. Section 37 is a tool with few legislated requirements and which can be targeted by Council to address local and city wide planning objectives. Development charges are regulated by the Province to only be used in relation to new demands for services arising from new growth. It is important to keep in mind some key facts about Section 37:

(i)has been available since 1983 to secure public benefits in exchange for increases in height and/or density;

(ii)has been used in former Metro municipalities in limited manner e.g. only 2.5 percent of 1997/98 development applications in former City of Toronto and North York involved Section 37;

(iii)is the only instrument available to secure affordable housing ($19 million and land for an estimated 6000 social housing units secured in former City of Toronto); and

(iv)is a key planning tool which helps to achieve a wide range of other community benefits e.g. daycare facilities, Hockey Hall of Fame, Design Exchange, heritage preservation, parks.

There are common interests and areas of agreement between the City and the development industry about the use of Section 37 and development charges. These include: the prevention of duplication of charges for the same specific services and the simplification and clarification of policy to increase certainty by clearly setting out when the tool is to be used, what public benefits it can be used for, the financial impact attached to the provision of the public benefits, and how accountability will be assured. Staff is committed to working with the development industry and other stakeholders in formulating the new Section 37 policies quickly.

This report presents a series of general principles which will form the basis of future discussion around Official Plan policies and implementation guidelines. These principles respond to the concerns with Section 37 which have been raised during the consideration of the development charges matter.

Background:

In a report dated June 11, 1999, to the Policy and Finance Committee meeting of June 24, 1999, the Commissioner of Urban Planning and Development Services reported on a number of matters including:

(a)the differences between Development Charges and Section 37 of the Planning Act;

(b)the past implementation of Section 37;

(c)the future proposed relationship of Section 37 to Development Charges;

(d)preliminary principles of Official Plan policies regarding Section 37 agreements; and

(e)the use of Section 37 prior to the new Official Plan provisions coming into effect.

At its meeting of June 24, 1999, your Committee requested that the Commissioner of Urban Planning and Development Services report on the following:

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

(b)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);

(c)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

(d)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.

The purpose of this report is to respond to these specific requests in the context of the information provided in the June 11, 1999 report referenced above.

Comments:

(1)Introduction:

From the June 24, 1999, requests of the Policy and Finance Committee noted above and subsequent discussions held with representatives of the development community, the concerns which are most apparent are: that Section 37 contributions would provide or pay for services specifically funded through development charges (i.e. duplication of charges); that the process requires simplification and clarification; and that the development industry requires more certainty about the City's expectations.

This report presents general principles which will form the basis of future discussion with the development industry and other stakeholders around Official Plan policies and implementation guidelines, including interim guidelines which can be employed during the transition period between the existing regulatory environment and the new Official Plan. These principles respond to the concerns with Section 37 which have been raised during the consideration of the development charges matter.

(2)Funding Services And Facilities Through Development Charges And Section 37:

(2.1)Development Charges:

Development charges must be determined in a very structured manner in accordance with a formula set out in the Development Charges Act and the accompanying Regulations. The general intent of development charges is to ensure that new growth largely pays for itself and that the capital costs of services attributable to new development are not borne by the existing community. The types of services for which a development charge may be imposed or not imposed are also set out in the legislation. The services which are proposed to be funded through the draft Development Charge By-law are listed in Table 1 attached to this report.

Examples of services not eligible to be included in the calculation of, or to receive funding from, development charges, are:

heritage preservation, cultural or entertainment facilities (except libraries), park land acquisition, public hospitals, waste management, municipal administration headquarters, and tourism facilities.

Examples of services which could be funded through development charges, but which for various reasons are not proposed to be funded through the proposed Development Charge By-law are:

GO Transit facilities, daycare, electrical power service facilities, and social housing.

The development charge calculation cannot include, and development charge funds cannot be directed to, the capital costs of any new or upgraded services provided to the existing community or the capital costs of any services provided for new growth at a level of service above the average level across the municipality for the 10 years preceding the background study.

(2.2)Section 37:

Unlike development charges, Section 37 is a planning tool with few legislated requirements for its use. It enables a municipality to secure the provision of city-wide, community-wide and/or local public benefits. Such public benefits are not restricted to new development only, nor to specified types of services. Appendix A contains some examples of the previous implementation of Section 37 in the City. The range of possible public benefits allows the furtherance of key municipal planning objectives, including a very significant one in today's context: the City's affordable housing strategy. Without Section 37, the City's affordable housing strategy would be severely hindered.

An important distinction between development charges and Section 37 is that Section 37 can be used to meet existing needs or deficiencies in a community, because its use is not restricted in legislation to facilities or services for new development. It is emphasized that City Council has few alternate means of funding services to satisfy an existing community need or deficiency other than through the use of Section 37, with the capital budget being the main alternative.

The June 11, 1999, report outlined the key aspects of the use of Section 37 including the legislative authority, the use of agreements to secure benefits and the principles embodied in the various planning instruments of the new City.

In summary, a fundamental principle in operationalizing the use of Section 37 in the context of development charges is that no duplication of charges should occur, meaning that the same specific service should not be paid for more than once by the development industry. Following this principle and based on the above discussion, it can thus be seen that Section 37 may be used to secure public benefits which:

(i)address service needs or deficiencies in the existing community;

(ii)are facilities, services or matters which cannot be, or have not been, funded by development charges; or

(iii)represent the municipal share of funding for facilities or services which are only partially funded through development charges.

(2.3)Comparison of Limitations of Development Charges and Section 37

Table 1, attached to this report, illustrates the facilities, services and matters which are proposed to be funded by development charges, and those which cannot be, or are not being, funded through the Development Charge By-law and for which it is proposed that Section 37 be used to secure them. If City Council should decide not to use Section 37, then a number of public benefits could not be secured, and the City's ability to achieve certain important objectives such as the affordable housing strategy would be seriously hindered.

(3)General Principles Governing Future Use of Section 37:

The use of Section 37 is a valuable planning tool, but its credibility rests on a rigorous and disciplined approach. Rules governing its use are required to be included within the Official Plan and in implementation guidelines adopted by Council. Without such rules, the tool will fall into disrepute and its effectiveness would spiral downward. The general Section 37 policies currently contained in the former City of Toronto Official Plan were developed in a different economic environment, and in an era of no development charges, for what is now the central core of the new City of Toronto. There is now a need to revisit the quantum in light of the new economic environment, in the context of city-wide development charges, and in light of the variations in the characteristics of development activity across the entire City. Clear, concise and simple rules would provide:

(i)clarity and certainty for the development industry and the public;

(ii)equity and fairness as between developers;

(iii)simplicity and ease of implementation; and

(iv)transparency and thus credibility.

Staff will fast-track the formulation of the guidelines for the city-wide use of Section 37 in consultation with the development industry and other stakeholders. Building on our experience to date, the following are the general principles which will form the basis of such discussions.

(3.1)When Section 37 is to be used:

(a)project must meet test of good planning, and in the context of a significant density increase, good planning includes a net community benefit;

(b)establish reasonable, fair minimum thresholds for development size and density increase for the use of Section 37 that make sense City-wide; and

(c)density increase to be generally approved by way of an Official Plan Amendment and rezoning (i.e. review how Section 37 would be applied for rezoning only).

(3.2)What public benefits are to be secured:

(a)clearly defined list of potential public benefits which does not overlap with specific services funded through development charges;

(b)clear rules regarding priorities and apportioning among City-wide, local off-site, and on-site public benefits;

(c)public benefits generally consist of capital facilities and funding for capital facilities.

(3.3)Value of public benefits:

(a)cost of public benefits should generally be a consistent percentage of the value of the increase in density; the percentage attributed to off-site benefits would be lower than the percentage attributed to on-site benefits; and

(b)clearly defined, fair and expedient procedures for determining value of density increases.

(3.4)Accountability for public benefits secured:

(a)regular (e.g. annual) reporting on status and disposition of public benefits secured; and

(b)reserve accounts will be created for cash contributions.

Other matters raised by the development industry, and which will be included in the discussions around the future use of Section 37, include the possibility of a financial cap on the level of the public benefits, and the re-naming of the contributions secured. Ultimately, it is intended that the requirements for Section 37 be clearly stated in the City's Official Plan, and the discussions will also cover whether the list of services for which Section 37 would be utilized should be included in the Official Plan policies.

(4)Response to Other Issues:

(4.1)Area-specific agreements respecting development charges:

The Commissioner of Urban Planning and Development Services was also requested to report on 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). There are numerous agreements in the former municipalities which include provisions for development charges and staff resources are not available to review all agreements entered into by the former municipalities.

With respect to the Port Union Village Area, Carma Developers Limited entered into a Subdivision Agreement with the former City of Scarborough dated June 22, 1995, which provided for certain matters including park development to be undertaken by the developer. The agreement provides a credit for the cost of the improvements undertaken by the developer against development charges to be paid, and in accordance with the requirements of the Act, the credit will continue to be honoured. The agreement does not, however, provide that the development charges collected must be expended in the Port Union Village Area. Council will determine the expenditure of development charge monies by determining the priority of the capital projects described in the background study based on its approval of the capital budget.

(4.2)Public art program:

The City's public art requirements have also been cited by the development industry as being another charge or levy on development. A public art program is currently operational in the former City of Toronto, and is implemented independently of development charges, parks contributions, and Section 37 public benefits. It is only related to Section 37 insofar as Section 37 agreements are sometimes used as the instrument to secure the public art obligation. The public art program is not implemented only in an official plan amendment or rezoning situation, but also in site plan applications where the minimum project size threshold (20,000 m2) is exceeded. Public art is not a charge or levy but a commitment from the developer to enhance the development by integrating public art.

Conclusions:

Section 37 is a key planning tool which helps to achieve a wide range of community benefits. The tool can be targeted by City Council to address local and city-wide planning objectives. In future, it will be implemented in conjunction with development charges in a coordinated manner. A rigorous and disciplined approach to the use of Section 37 will provide greater clarity and certainty, be fair to all parties, be simple to implement, and be transparent. Clear, concise and simple rules governing its use will provide credibility and accountability. There will be no duplication of charges through the coordinated implementation of development charges and Section 37. Whereas general principles governing the future implementation have been set out, more detailed Official Plan policies and implementation guidelines will be established in consultation with the development industry and other stakeholders.

Contact Name:

Peter Langdon, Metro Hall, Telephone: (416) 392-7617, Fax: (416) 397-4080;

E-mail:plangdon@toronto.ca

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Appendix A

Examples and Discussion of Section 37 Public Benefits

(a)Affordable housing:

Provision of affordable housing is an important City objective. City Council has already approved the use of Section 37 to secure contributions to the Capital Revolving Fund for Affordable Housing. Section 37 is also used to secure replacement rental housing in situations where demolition of existing rental housing is proposed under the new Official Plan provisions. A distinction will be made with respect to the "value" of the benefit that the City secures in the context of the replacement of rental housing. In securing such replacement housing, Council is simply maintaining an existing resource and meeting the Council objective of "no net loss" of the affordable stock. In the former City of Toronto, Section 37 has been used to secure land for an estimated 6000 social housing units and approximately $19 million in contributions for social housing. Council has recently approved the use of the remainder of this fund (approximately $10 million) to seed the Capital Revolving Fund for Affordable Housing.

(b)Heritage preservation:

Heritage preservation and restoration is another important City objective which can be furthered through use of Section 37. The Ontario Heritage Act is not as strong as many would like in its ability to preserve designated historical buildings, and can only deal with preservation as opposed to restoration. Section 37 can be used to secure both preservation and restoration, and can also deal with buildings of historical significance which are not designated under the Ontario Heritage Act. This public benefit is usually, but not always, an on-site benefit. Previous examples of developments where Section 37 has been used to secure heritage preservation and restoration include BCE Place (Hockey Hall of Fame) and the Gooderham and Worts mixed use development among many examples in the former City of Toronto, and the Lambton Tavern site in former York.

(c)Daycare facilities:

Daycare facilities have been secured in the former City of Toronto through Section 37 to the extent of 537 spaces, 329 of which have been constructed to date. The former Scarborough and North York have also used Section 36/37 to fund daycare facilities. Such facilities can be located either on-site or off-site. Previous examples of developments where Section 37 has been used to secure daycare facilities include: Canada Life, BCE Place, Eaton Centre, Waterpark Place, and Scotia Plaza.

(d)Parks and open space and related improvements:

Acquisition of land for parks and open spaces, and funding for improvements to parks and open spaces, have also been secured through the use of Section 37. Park land acquisition cannot be funded through development charges, so there is no conflict there. Acquisition of park or open space lands, or securing of funding for improvements thereto, through Section 37 is not a substitute for parks contributions under Section 42 (Parks Levy By-laws). Rather, it is a supplement to the use of Section 42 for those communities which have been recognized by City Council as being parks deficient or where a special capital project not listed in the development charge Background Study has been approved by City Council.

(e)Other cultural or institutional facilities or local improvements:

Section 37 may also be used to secure rare, unique opportunities for special cultural or institutional facilities which arise due to the peculiar characteristics and objectives of a development proposal. Examples are the Hockey Hall of Fame in BCE Place, and the Design Exchange. In addition, where City Council has recognized an existing community deficiency, or approved a special community project which is not on the list of capital projects in the development charge Background Study, directly related local improvements or funding therefor can be secured through Section 37.

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Table 1

Facilities, Services and Matters to be Funded Through Proposed Development Charge By-law and Provided or Funded Under Proposed Use of Section 37 of Planning Act

The Policy and Finance Committee reports, for the information of Council, having also had before it during the consideration of the foregoing matter the following communications which were forwarded to all Members of Council with the agenda and supplementary agendas of the July 20, 1999, meeting of the Policy and Finance Committee and copies thereof are also on file in the office of the City Clerk:

(i)(June 22, 1999) from the Commissioner of Corporate Services and City Clerk, Corporation of the City of London, advising that the Municipal Council on June 21, 1999, adopted a resolution on the recommendation of the Development Charges Monitoring Committee, and in so doing requested the Provincial Government to establish a policy to require all government agencies, including Crown Corporations, to adhere to local planning and development regulations/legislation which adherence would include the payment of local development charges; and directed that a copy of the foregoing resolution be forwarded to all municipalities in Ontario that have a community college;

(ii)(July 5, 1999) from Ms. Mary L. Flynn-Guglietti, Goodman and Carr, Barristers and Solicitors, summarizing her submission made to the Policy and Finance Committee on June 24, 1999; and amongst other things, recommending that Council adopt the suggestions of the Commissioner of Economic Development, Culture and Tourism and vote to waive development charges on commercial/industrial properties;

(iii)(July 5, 1999) from Ms. Mary L. Flynn-Guglietti, Goodman and Carr, Barristers and Solicitors, advising that they are acting on behalf of Wittington Properties Limited and Diamante Development Corporation; that their client entered into a Section 37 Agreement with the City of Toronto on October 16, 1997; that no request for a building permit has been filed at this time and they do not anticipate receiving one prior to the deadlines as set out in the proposed Transition Rules of the new Development Charges By-law; that at the time their client entered into the Development Agreement, there were no development charges for the City of Toronto; that if their client had been made aware of the fact that there would be development charges for this development, they may not have agreed to the proposed payments as set out in the Development Agreement; and recommending that Council recognize that parties who entered into agreements prior to a development charge being implemented not now be forced to make an additional payment through the Development Charges By-law;

(iv)(July 9, 1999) from the President, North York Chamber of Commerce, expressing objection to the reintroduction of Development Charges on commercial properties that create employment; and, amongst other things, stating that the City should promote the reuse of commercial properties for employment use and remove development charges;

(v)(June 30, 1999) from Mr. Bill Palander, President, Toronto Real Estate Board, advising that the Toronto Real Estate Board believes that Development Charges have been a significant barrier to housing affordability and economic development for several years; that Development Charges are a way in which municipalities can require those who develop land to contribute to the capital costs necessary to service new developments; that this means joint responsibility and the fair sharing of the costs between new growth and the existing taxpayer; that any radical change in the City of Toronto will have an impact on development, investment and jobs; that the intent of the provincial reforms to the Act in 1997 was to reduce charges; that the real estate industry realizes that development charges are needed to pay for new growth services which is not in dispute; that they have a problem with the level of these charges; that the cost of new growth services must be contained by establishing reasonable and sustainable levels of services and by basing development charges on the actual benefits related to new growth; and that those services which end up benefiting the entire community must be paid for by all residents as a matter of fairness;

(vi)(July 13, 1999) from Raymond H. Mikkola, Fraser Milner, registering a complaint by Telefirma (4000 VP) Inc., ("Telefirma"), the owner of 3215 Steeles Avenue and 4000 Victoria Park Avenue, in the City of Toronto, that the amount of the development charge imposed by the City in respect of the first phase of the Call-Net Centre development at the above property was incorrect or was based on incorrect data and that the amount credited to the owner (being nil) against development charges was incorrect; that Telefirma paid such development charges to the City on April 15th, 1999; that at the time of Telefirma's payment of the development charges, the City did not grant to Telefirma, or enter into an agreement with a view to granting Telefirma, credits against the road and Highway 404 ramp land conveyances and improvements which the City has required be undertaken by Telefirma; and that these conveyances constitute services under the Municipality's development charge by-law; therefore Telefirma is entitled to a credit equal to the reasonable cost of their installation and value of their conveyance;

(vii)(July 15, 1999) from the City Clerk advising that the Planning and Transportation Committee on July 12, 1999, received the transmittal letter (June 28, 1999) from the City Clerk on this matter, and the material attached thereto, for information;

(viii)(July 1, 1999) from Kris Menzies, MCIP, RPP, Vice President, Development, Bearpoint Group, representing 1285613 Ontario Limited, the residential land developer for 50 and 60 Oak Street; and expressing an objection to the proposed residential development charge as it relates to single and semi-detached units and other multiples as this increased charge shall adversely prejudice this development; and

(ix)(July 13, 1999) from the Commissioner of Economic Development, Culture and Tourism reviewing the expected impact of implementing harmonized residential development charges in the City of Toronto; and recommending that this report be received for information.

________

The following persons appeared before the Policy and Finance Committee in connection with the foregoing matter:

-Mr. Steve Diamond, on behalf of the Urban Development Institute, the Greater Toronto Homebuilders Association and CIPREC, (Canadian Institute of Public Real Estate Companies);

-Councillor Jack Layton, Don River;

-Mr. Phil Giffin, Vice President and General Manager of Real Estate, Sun Life of Canada, and also representing the Toronto Board of Trade; and submitted a brief in regard thereto;

-Ms. Julie Di Lorenzo, representing Diamante Development;

-Mr. Thomas Kowal, Barrister Solicitor, North York Chamber of Commerce; and

-Mr. Rosario Marchese, M.P.P., Trinity-Spadina.

(Mayor Lastman declared his interest in the foregoing matter, in that partners at the same law firm as his son, who is not a real estate lawyer and does not personally act on these files, are representing applicants and have worked on related files.)