Official Plan Policies and Related By-laws

Regarding the Conversion to Condominium

and Demolition of Rental Housing.

The Urban Environment and Development Committee, after considering the deputations and based on the finding of fact, conclusions and recommendations contained in the report, dated November 23, 1998, from the Commissioner of Urban Planning and Development Services, recommends that the report (November 23, 1998) from the Commissioner of Urban Planning and Development Services, be adopted subject to:

(1)Section 3.2.3Conversion and Demolition of Rental:

(a)Section 135.1- strike out the word "discouraging" and insert in lieu thereof the word "prohibiting" so that such section shall now read as follows:

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

(c)Section 135.4 - delete the words "where appropriate" so that such section shall now read as follows:

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

(2)any further amendments that City Council may adopt following the consideration by the Urban Environment and Development Committee at its meeting scheduled to be held on February 8, 1998, of the various reports requested of the Commissioner of Urban Planning and Development Services and the Commissioner of Community and Neighbourhood Services with respect to the foregoing proposed new official plan policies to regulate the conversion to condominium and demolition of rental housing.

The Urban Environment and Development Committee reports, for the information of Council, having directed that:

(a)the Commissioner of Urban Planning and Development Services being requested to report back to the Urban Environment and Development Committee at its meeting scheduled for February 8, 1999, on the following matters:

(i)extended protection to all rental units in multiple residential zones;

(ii)all rental units, regardless of the market rent, being given protection of the Official Plan provision;

(iii)planning notification being extended to all tenants;

(iv)all reports submitted to City Council to include complete details on outstanding work orders and the condition of the building at the preliminary application stage;

(v)a number of issues concerning equity co-operatives, including:

-addressing the problem of shareholders trapped in co-ownership or equity co-operatives, as it relates to co-ownership and equity co-operative buildings established prior to The Rental Protection Act, without deterioration of the protection intended for existing rental units; and

-amending Recommendation No. 2 of the York Community Council report be deleting from paragraph 135.2 the words "or more" and inserting in lieu the words "or less" so that the revised policy shall now read as follows:

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

(vi)the North York Community Council's recommendations A. & B., embodied in the report (November 17, 1998) from the City Clerk, for clarification purposes, viz:

"A.Moved by Councillor Feldman:

That a further clause 135.6 be added as follows:

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

(i)the building is functionally obsolete;

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

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

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

B.Moved by Councillor Flint:

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

(d) the Commissioner of Community and Neighbourhood Services, in consultation with the Commissioner of Urban Planning and Development Services, be requested to report to the Urban Environment and Development Committee meeting scheduled for February 8, 1999, on the status of:

(i)the 'High Rise Maintenance Inventory' report, co-funded the CMHC and the City; and

(ii)the potential for developing a maintenance protection enforcement strategy to preserve and enhance the rental housing stock and protect tenants from neglectful maintenance;

The Urban Environment and Development Committee further reports, for the information of Council, having held a statutory public meeting on November 30, 1998, in accordance with Section 17 of The Planning Act and that appropriate notice of this meeting was given in accordance with The Planning Act and the regulations thereunder.

The Urban Environment and Development Committee submits the following report (November 23, 1998) from the Commissioner of Urban Planning and Development Services:

Purpose:

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

Funding Sources, Financial Implications and Impact Statement:

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

Recommendations:

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

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

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

Section 3.2.3 Conversion and Demolition of Rental Housing

It is the policy of Council:

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

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

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

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

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

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

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

"related group of buildings"

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

"rented residential units"

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

(c)deleting the following sections dealing with conversions:

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

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

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

section 6.18 in the Toronto Official Plan; and

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

(d) deleting the following sections dealing with demolitions:

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

section 2.2.15 in the Etobicoke Official Plan;

section 9.8 in the York Official Plan;

section 6.19 in the City of Toronto Official Plan; and

sections 4.10 and 4.10.1 in the East York Official Plan;

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

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

section 2.2.16 in the Etobicoke Official Plan; and

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

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

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

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

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

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

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

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

1.0Background and Context:

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

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

2.0Deputations at the UEDC:

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

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

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

3.0Motions made by the UEDC:

(a) General Revisions to Wording of the Proposed Policies:

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

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

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

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

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

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

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

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

(b)Notification and Application Fees:

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

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

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

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

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

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

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

(c)Outstanding Work Orders:

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

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

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

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

(d)Political Party Commitment to Rental Preservation:

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

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

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

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

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

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

4.0Additional Recommendations made by Community Councils:

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

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

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

(a)Acquisition Of Rental Property:

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

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

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

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

(b)Coverage of Equity Co-operatives:

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

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

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

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

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

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

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

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

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

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

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

(c)An Exemption for Specific Sites:

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

(A)That a further clause 135.6 be added as follows:

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

(i)the building is functionally obsolete;

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

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

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

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

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

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

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

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

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

(d)Coverage of Vacant Units:

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

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

5.0Conclusion:

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

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

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

-prohibiting equity co-operatives;

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

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

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

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

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

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

-excluding equity co-operatives from conversion policies; and

-providing additional exemptions to the conversion and demolition policies.

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

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

Contact Name:

Ms. Barbara Leonhardt, Director, Policy and Research, 392-8148.

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Appendix A

Application, Notice and Meeting Requirements for

Condominium Conversion and Demolition Applications

A.1Condominium Conversion Applications:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Appendix B

Interpretative Guidelines

Prescribed Rent Level Re: Condominium Conversions

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

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

1997 Apartment Rents by Unit Size

City of Toronto

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

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

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

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

Source: CMHC's 1997 Rental Market Survey

Note:Average 1997 rents for townhouses are $864.00 for two bedrooms, $1,018.00 for three bedrooms and $1,125.00 for four bedrooms.

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Appendix C: Draft By-Law

City of Toronto

Bill No.

BY-LAW No.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

MEL LASTMAN,NOVINA WONG,

MayorCity Clerk

(Corporate Seal)

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Appendix D

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

Purpose:

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

Funding Sources, Financial Implications and Impact Statement:

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

Recommendations:

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

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

Background:

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

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

Discussion:

There are six pieces of special legislation that apply in the former City of Toronto that have provisions dealing with residential demolition matters that the Commissioner will be considering in her overall review of demolition matters. The Commissioner has confirmed, as set out in section 2a) of her May1, 1998 report, that the special legislation being referred to in Recommendation (4) is the Cityof Toronto Act, 1984, S.O. 1984, c. Pr6 (the "1984 Act"). A copy of the 1984 Act is on file with the City Clerk.

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

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

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

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

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

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

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

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

Conclusion:

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

Contact Name:

Ms. Christina M. Cameron, Legal Services Division, 392-7235.

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Schedule A

Bill Pr

1998

An Act Respecting the City of Toronto

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

It is appropriate to grant this application.

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

Definitions1. In this Act,

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

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

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

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

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

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Appendix E

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

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

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

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

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

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Appendix F

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

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

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

Dear Mayor Lastman and Members of Council:

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

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

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

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

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

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

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

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

Specifically, we recommend that the City of Toronto:

(1)Establish an administrative structure to actively encourage partnerships to combine affordable (often municipally owned) real estate with investment capital to produce private sector market units.

(2)Pass resolutions and implement an action plan to press the provincial and federal governments to acknowledge the rental housing problem and contribute to a solution by allowing PST and GST exemptions on building materials and other development expenses (especially services) that are dedicated to production of rental units.

(3)Establish a task force to initiate dialogue with industry representatives about municipal assurances and incentives that will encourage them to build new units.

(4)Provide exemptions in any relevant municipal policy respecting buildings that require structural repairs and improvements that are not economically feasible.

(5)Take action that will capitalize on low interest rates and the development of a new regulatory climate that has returned Ontario's rental housing industry to the brink of viability.

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

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

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

Sincerely,

Richard Kuchynski

Director of Planning and Development

The Urban Environment and Development Committee also submits the following report (November 16, 1998) from the City Clerk:

The Urban Environment and Development Committee on November 2, 1998, considered the attached report (October 15, 1998) from the Commissioner of Urban Planning and Development Services, entitled "Official Plan Policies and Related By-laws Regarding the Conversion to Condominium and Demolition of Rental Housing", and took the following action:

(A)endorsed Recommendations Nos. (1), (9), (10) and (11) embodied in the aforementioned report, viz:

"It is recommended that:

(1)the Urban Environment and Development Committee schedule a statutory public meeting for November 30, 1998, to consider proposed official plan amendments with respect to the conversion of rental housing to condominium and the demolition of rental housing as detailed in Recommendation No. (2);

(9)a copy of this report and the Committee's action be forwarded to the Community Councils for review at their meetings scheduled to be held on November 12, 1998, with a request that their comments be made available for the Urban Environment and Development Committee's consideration at its November 30, 1998 public meeting;

(10)a copy of this report be forwarded to the Minister of Municipal Affairs and Housing to fulfill the consultation requirement with respect to the Minister's recent announcement of exempting amendments to the City's Official Plan from provincial approval; and

(11)the appropriate City officials be authorized to undertake any necessary action to give effect thereto, including preparing and introducing any necessary bills and giving notice of the public meeting in the Toronto Star.";

(B)referred the following motion to the Community Councils and the Commissioner of Urban Planning and Development Services for review and comment thereon to the November 30, 1998 meeting of the Urban Environment and Development Committee:

Moved by Councillor Moscoe:

'That the Urban Environment and Development Committee recommend to Council that:

(1)Recommendation No. (2)(a), embodied in the report (October 15, 1998) from the Commissioner of Urban Planning and Development Services, be amended as follows:

135.1-(i)delete the words "where appropriate"; and

(ii)strike out the word "discouraging" and insert in lieu thereof the word"prohibiting";

135.3-add the word "only" after the words "rented residential units";

135.4-delete the words "whenever possible" and "wherever appropriate";

135.5-strike out (a) and insert in lieu thereof the following:

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

so that Recommendation No. (2)(a) shall now read as follows:

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

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

Section 3.2.3Conversion and Demolition of Rental Housing:

It is the policy of Council:

135.1to preserve, maintain and replenish the supply of residential buildings, and particularly rental buildings, across the City of Toronto by restricting the demolition of residential property and the conversion of rental units to condominium, and byprohibiting the conversion of rental units to equity co-operative;

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

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

135.4to seek the retention of rented residential units, and to consider acquiring or leasing the property where such units are at risk of being demolished;

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

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

(2)the following new Recommendations Nos. (12) and (13) be added thereto:

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

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

(c)requested the Commissioner of Urban Planning and Development Services to submit a report to the November 30, 1998 meeting of the Urban Environment and Development Committee on:

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

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

(D)requested the Chief Building Official to communicate (e.g., by fax) directly with all Members of Council, the City Solicitor, the Commissioner of Urban Planning and Development Services, and the Chief Planner, whenever an application is received for either conversion to condominium or demolition of rental housing; such communication to include the basic details of the affected rental housing (e.g., number of units, tenants, etc.).

The Urban Environment and Development Committee also submits the following report (October 15, 1998) from the Commissioner of Urban Planning and Development Services:

Purpose:

To recommend Official Plan Policies, Council guidelines and by-laws that will enable the City to actively preserve the existing rental housing stock by restricting the conversion and demolition of rental housing.

Funding Sources, Financial Implications and Impact Statement:

Adoption of the recommended policies will mean that the appropriate Community Council will hear deputations on applications for condominium approval involving the conversion of rental housing, and applications to demolish residential units where the City's special legislation applies. As directed by Council, staff will request applicants to pay for notice of the Community Council meeting, but in the event the costs are not recovered, they will be borne by the Clerk's Department.

The one-time cost of printing and advertising the notice regarding the extension of the special legislation on demolition control to all of the new City is estimated to be approximately $6,000.

Recommendations:

It is recommended that:

(1)the Urban Environment and Development Committee schedule a statutory public meeting for November 30, 1998 to consider proposed official plan amendments in respect to the conversion of rental housing to condominium and demolition of rental housing as detailed in Recommendation No. (2);

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

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

Section 3.2.3 Conversion and Demolition of Rental Housing

It is the policy of Council:

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

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

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

135.4to seek, whenever possible, the retention of rented residential units, and to consider, where appropriate, acquiring or leasing the property where such units are at risk of being demolished.

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

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

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

"related group of buildings"

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

(c)deleting the following sections dealing with conversions:

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

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

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

section 6.18 in the Toronto Official Plan; and

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

(d) deleting the following sections dealing with demolitions:

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

section 2.2.15 in the Etobicoke Official Plan;

section 9.8 in the York Official Plan;

section 6.19 in the City of Toronto Official Plan; and

sections 4.10 and 4.10.1 in the East York Official Plan;

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

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

section 2.2.16 in the Etobicoke Official Plan; and

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

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

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

(5)Council resolve that for the purposes of defining "high-end rental units" in accordance with Policy No. 135.3 (refer to Recommendation (2)(a)) the factor of 1.5 times the City's average rent (by bedroom size) as detailed in Appendix B shall be used.

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

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

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

(9)a copy of this report and the Committee's action be forwarded to the Community Councils for review at their meetings scheduled on November 12, 1998 with a request that their comments be made available for the Urban Environment and Development Committee's consideration at its November 30, 1998 public meeting;

(10)a copy of this report be forwarded to the Minister of Municipal Affairs and Housing to fulfill the consultation requirement in respect to the Minister's recent announcement of exempting amendments to the City's Official Plan from Provincial approval; and

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

Executive Summary:

Toronto has one of the lowest private rental apartment vacancy rates in the country. Rental demand, particularly from low and moderate income households, is very strong and will likely remain so for the foreseeable future. On the supply side, there has been negligible production of rental housing in recent years, and with the repeal of the RHPA the existing private rental stock is in serious jeopardy.

The need for housing and the growing demands being placed on the existing stock are evidenced by the work of the Mayor's Homelessness Action Task Force and the Council Strategy Committee for People without Homes. In its interim report, the Mayor's Task Force identified several disturbing facts including:

(a)more than 80,000 people in Toronto today are at risk of becoming homeless, as many spend more than 50 percent of their income on rent or are living in precarious housing situations;

(b)the percentage of tenants with affordability problems is increasing;

(c)the number of low-cost conventional apartment units in Toronto has decreased since 1990; and

(d)there is a shortfall of between 2,000 and 4,000 low cost housing units a year which are required to meet the new demand.

Complicating this situation, is the recent enactment of the Tenant Protection Act (TPA), and the repeal of the Rental Housing Protection Act (RHPA). Without the RHPA, municipalities must now make use of other less effective tools at their disposal to minimize the loss of rental housing. Unfortunately, given this legislative change, with the exception of conversion to condominium, there is little that local governments can do to limit the conversion of rental units to other uses, or to restrict the severance, or renovation of rental properties. Demolition control powers have also been substantially curtailed by the repeal of the RHPA.

The approach taken in this report is two-pronged. It first examines the tools available to the City to address condominium conversions, and second, the mechanisms that may be used to limit demolitions. With respect to condominium conversions, the City can rely on the Planning Act, and official plan policies to control conversions. OMB cases have upheld municipal conversion policies in the past, even prior to the enactment of the RHPA in 1986. All but one of the former area municipalities have condominium conversion policies in their respective official plans. This report proposes a harmonized set of conversion policies for inclusion in the Metropolitan Toronto Official Plan. The intent of these policies will later be incorporated into the City's new Official Plan.

Unlike condominium conversions, the tools available to restrict demolitions are less than adequate. Under Section 33 of the Planning Act, municipalities can delay the demolition of residential buildings in areas of demolition control, but only until a building permit for a new structure has been obtained. This report recommends that a demolition control by-law be enacted in the former City of Scarborough, as an interim measure, so that Section 33 is applied to all former municipalities in the new City. As well, the report directs staff to harmonize all demolition control by-laws throughout the City.

The former City of Toronto also has special legislation which has allowed it, under certain circumstances, to go beyond Section 33, and refuse the issuance of a demolition permit for up to one year after the building permit has been issued. The main benefit of this legislation is that it provides the municipality with additional time to develop approaches to redressing the potential loss of rental units. Therefore, it is recommended that Council seek the Province's approval to extend this legislation and its benefits to all parts of the new City.

While the use of Section 33 and the former City of Toronto's legislation help the City to buy time when a residential building is proposed to be demolished, these tools alone will not be enough to effectively deter the loss of dwelling units. There is a concern that since the City is in a position to exercise condominium conversion powers but not effectively control demolition, the current policy framework may provide an incentive, in some instances, to consider demolition and redevelopment of the property. This could lead to an unhealthy dynamic across the City where increased demolition activity may well take place.

In this regulatory environment, it is important that Council address this possible trend and provide a policy framework through its Official Plan and other mechanisms, to encourage new rental housing generally and replacement rental housing in particular in those instances where redevelopment is proposed to demolish affordable rental housing. This report recommends a policy be included in the Official Plan to deal with situations where residential units are demolished (within the constraints of Section 33 and other special legislation) and the property is proposed to be redeveloped. The intent of the policy is to ensure that the City makes use of available legislation and other appropriate incentives, to maximize the number of rental units that will be replaced, whether on site, off site, or through an appropriate contribution to enable its replacement by the City or another housing provider on the City's behalf.

This policy would be one of the tools that Council will need to utilize in an effort to bring new affordable housing stock onto the market. Other approaches are being considered as part of the Affordable Housing Strategy which is now being developed by City staff, as follow-up to the work of Housing Stakeholders' Panel, for the Council Strategy Committee for People without Homes.

(1)Background:

On June 17, 1998 the Province proclaimed the TPA. This legislation repealed a number of other provincial statutes including the RHPA, the Rent Control Act and parts of the Landlord and Tenant Act. As all larger municipalities in Ontario were required to implement the provisions of the RHPA, its elimination directly affects the City's ability to control changes to rental housing.

The RHPA required larger municipalities to receive and consider applications involving the:

(a)conversion of rental housing to condominium, equity co-operative, commercial or other uses;

(b)demolition of rental housing;

(c)renovation/repair of rental housing that would require vacant possession; or

(d)the severance of rental properties.

The TPA does not require municipalities to consider proposed changes to rental properties. However, municipalities can apply official plan policies and procedures to restrict the loss of some rental units.

The City currently has tools which may be used to regulate conversions to condominium and postpone demolitions. However, there appears to be no clear authority (outside of zoning or property standards by-laws), for the City to restrict renovations/repairs, severances or the conversion of rental properties to other uses such as commercial.

Interim policies dealing with condominium conversions and demolitions were adopted by Council at its meeting of June 3, 4 and 5, 1998 (Clause No. 4 in Report No. 7 of the Urban Environment and Development Committee entitled "City Powers, Policies and Procedures regarding the Conversion to Condominium and Demolition of Rental Housing before and after the Proclamation of the Tenant Protection Act" is attached as Appendix F). At this meeting, Council specifically:

(a)requested that Community Councils hear deputations on conversion applications and established notice requirements for such Community Council meetings;

(b)amended the delegation by-law to provide Council with the decision-making authority on conversions;

(c)requested the City solicitor to report on extending the former City of Toronto's special legislation on demolitions to the entire new City;

(d)specified additional information requirements for conversion applicants;

(e)requested that the new Official Plan conversion policy consider forbidding a conversion unless an established vacancy rate has been achieved; and

(f)directed planning staff to report back by early fall of 1998 on appropriate policies and procedures for condominium conversions and the demolition of rental housing.

(2)Current Rental Housing Needs:

Rental housing is a significant feature of the City's housing market, constituting half of all housing units. There are approximately 475,000 tenant households in the City (1996 Census, Statistics Canada). This number constitutes three quarters of all tenants in the GTA.

The demand for rental housing is not being met by the increases in supply in the traditional high-rise or social housing stock. The inability of the development industry and non-profit producers to supply this rising demand for rental units is resulting in an increase in the number of privately rented houses, and the creation of second suites in private houses.

The stress on the existing rental stock and the pressure on privately owned units has been partly caused by the halt in rental apartment construction. There is no new supply of rental apartments being created. The social housing programs which addressed much of the need for low rent housing for the past 25 years have been suspended. The building of new rental housing is not an attractive investment for the private sector at current costs and potential returns. This is evidenced in that, in 1997, there were only 179 rental housing starts in the City, as compared to 1,419 units in 1995.

In contrast to rental housing construction, the market for condominium apartments has improved and condominium construction is on the rise. The increase in overall apartment unit supply, (rental apartments plus condominium units), has not benefitted those in search of rental apartments, since very few of these new units find their way into the rental market. While many condominium apartments had previously been rented because there were no buyers in the market, Canada Mortgage and Housing Corporation (CMHC) has identified a decrease in the supply of rental condominium apartments since 1996 and attributes this to an increased tendency to owner-occupancy. Confidence in an improved economy has resulted in the absorption of unsold units and the stimulation of the condominium resale market, further reducing the numbers of rental condominium units available.

While supply is being squeezed, demand for rental housing is escalating. The level of demand, or need, is illustrated by the following key indicators. At 0.8 percent, (October 1997), Toronto has one of the lowest private rental apartment vacancy rates in the country; the incidence of crowding (households not meeting National Occupancy Standards) increased by an estimated 7 percent between 1991 and 1996, (Homelessness Action Task Force); and there are increasing numbers of households spending a disproportionate share of income on housing (see graph below). The number of families living below Statistics Canada's Low Income Cut-off has increased by 5 percent since 1991; these 150,000 families represent 24 percent of all economic families in the City.

Tenants at the lowest incomes are least able to cope in such a constrained rental market. Not only is there a generalized shortage of rental units, there is a severe shortfall in affordable rental units. The interplay between competition for few units and reduced income levels at the lower end has resulted in a steep increase in households with incomes below CMHC's "Core Need" threshold (see graph below).

Indications are that tenants are devoting increasing shares of income to shelter costs, moving into non-traditional rentals such as accessory units, and living in larger households to meet rent costs.

Rental demand is currently very strong and will remain so, given the lack of new construction and the shift of condominium units from rental to owner occupancy. The need for rental housing is strongest from those households with low and moderate incomes. Any further reduction of affordable rental housing supply at low and moderate rent levels will exacerbate an already severe housing shortage in these categories.

The proposed policy objective to preserve the supply of rental housing is not new, but is a continuation of previous municipal and Provincial commitments. Most of the former municipalities in the City have had condominium conversion policies since the early 1970's. Preserving rental housing is also consistent with the Provincial Housing Policy Statement which encourages housing forms and densities designed to be affordable to moderate and lower income households. As well, when considering condominium applications under section 51(24) of the Planning Act, the legislation states that regard shall be had to various matters including: the health, convenience and welfare of the present and future inhabitants of the municipality; the effect of the proposal on matters of provincial interest such as the adequate provision of a full range of housing; and whether it is premature or in the public interest.

(3)Current Municipal Tools and Possible Changes:

(3.1)(a)Condominium Conversion Official Plan Policies:

The previous planning report to UEDC (Clause No. 4, Report No. 7, 1998) emphasized the City's ability in the interim to use the existing condominium conversion and demolition control policies of the former municipalities, and highlighted the relevant enabling sections of the Planning Act. This section describes the specific components of the proposed conversion and demolition policies for the new City.

(3.1)(b)Criteria to be Applied to Conversion Applications:

(3.1)(b)(i)Vacancy Rate:

The vacancy rate is the standard measure of supply of the rental market. It serves as a strong indicator of whether a conversion application would adversely affect the supply of rental housing in the City. It also provides clarity in determining the requirements of the Planning Act with respect to "public interest" and directly addresses the consideration of the welfare of present and future inhabitants.

While there has been some discussion as to what is an appropriate rate, CMHC and the Province have both recently stated that a 3.0 percent vacancy rate is indicative of a healthy and balanced rental housing market. A vacancy rate of 3.0 percent has not been attained in the Toronto CMA since 1972 (3.3 percent), and it currently sits at 0.8 percent.

Only one former area municipality used a 3.0 percent vacancy rate (East York). The former City of Toronto and North York specified a rate of 2.5 percent, while Etobicoke used 2.0percent. Although York's policy refers to consideration being given to the current vacancy rates, no explicit rate has been stipulated. Scarborough does not currently have a condominium conversion policy in place. There are no compelling reasons to continue with different rates based on former political boundaries. The average rate of 2.5 percent used by the former municipalities with an explicit policy on conversion would represent a reasonable benchmark for restricting conversions.

In addition to private rental apartment buildings, the policy should apply to private rental townhouse developments. Townhouses make up a very important part of the rental housing market as these larger, ground-related units are often the most suitable and desirable form of accommodation for families with children.

(3.1)(b)(ii)Number of Rental Units in the Property:

When dealing with conversion applications, the RHPA exempted rental properties with four or fewer units from the mandatory approval criteria. Between 1986 and 1996 only 21 units in smaller buildings in the City were converted in accordance with this partial exemption. Applications involving a few units (conversion and otherwise) were generally labour intensive to administer, yet yielded marginal gains. It is recommended that the proposed policy continue to provide an exemption for properties containing a small number of rental units.

Several policies and by-laws of the former municipalities (e.g., the former City of Toronto's special legislation on demolition control) have been applied to buildings containing six or more units. These exempt smaller buildings such as duplexes, triplexes, and double duplexes, however cover most apartment buildings. It is suggested that the proposed policy apply to any building, or related group of buildings, such as townhouse developments, with six or more rental units. A related group of buildings would refer to buildings that are under the same ownership and on the same parcel of land as defined in the Planning Act.

(3.1)(b)(iii) High-End Units:

In some of the former municipalities planning staff have dealt with inquiries around the conversion of high-end and luxury rental units. Proponents have often argued that the tenants of these units are not in the traditional "rental" market, but have selected the unit based on location, short-term tenancy, or the additional services offered. This report recommends that Council's primary concern in implementing its condominium conversion policy should be the protection of the majority of the rental stock. The conversion of the high-end units could displace higher-income tenants which in turn may compete with moderate and lower-income tenants for the remaining available units. However, the impact of the high-end conversions on the lower-income tenants and lower-priced stock, could be minimized by restricting the rent level of units that may be converted to the limited stock at the very high-end of the range.

It is suggested that a guideline based on rent levels be adopted by Council to consider a limited conversion of units at the very high-end of the market. This guideline could be re-evaluated by staff and Council on a periodic basis. An initial guideline (of 1.5 times the City's average rent by bedroom size) is being recommended as the indicator of high rent housing, above which conversion could be considered. The effect of this guideline will be monitored and adjusted as needed.

Using 1997 rents (the latest data available) this equates to monthly rents of $833.00, $1,025.00, $1,232.00 and $1,503.00, for bachelor, one-bedroom, two-bedroom, and three bedroom units, respectively. Using this criteria there are approximately 9,000 apartment units that would be considered high rent units and candidates for conversion, representing 1.9percent of the current rental stock (see Appendix B), however, it should be recognized that not all of these units would be eligible for conversion as the policy requires that "each unit in the building" has a rent that exceeds the average by 1.5 times.

(3.1)(c) Information, Notification and Meeting Requirements:

The Tenant Protection, Planning and Condominium Acts do not require that tenants be notified of a condominium application or that a public meeting be held to consider the application. As condominium conversions are clearly a matter of public interest, given their effect on both the local housing market as well as the sitting tenants, it is appropriate to provide an opportunity for public input on plans of condominium that involve the conversion of rental housing. The names and addresses of the affected tenants who may wish to attend a meeting on a proposed conversion, will be provided in the application materials submitted by the proponent.

In addition, the applicant should be required to provide further detail on the condition of the building and the needed improvements. This information would identify deficiencies in property standards and building codes that would assist Council and prospective buyers in making informed decisions. This requirement for a technical report on a building's condition is consistent with the approach taken by the former area municipalities of East York and Etobicoke.

The application, notice and meeting requirements for condominium conversion and demolition applications recommended for Council's adoption are detailed in Appendix A.

The requirements include the applicant being requested to pay for the cost of providing notice of the Community Council meeting to hear deputations on conversion proposals. The Solicitor has advised that "as there is no legal requirement to notify tenants, ... the statute would not justify the imposition of a fee for the notice." Therefore, Council may request the applicant to pay for notifying the tenants, but the applicant is not legally required to do so. If the applicant does not pay for the notice, payment would be at the City's expense.

(3.2)Demolition of Rental Housing:

While the City can rely on Official Plan policies to limit conversion of the private rental stock to condominium, its powers to prevent losses through demolition are very limited. In fact, Council's demolition powers are confined to delaying the issuance of a demolition permit. This imbalance in Council's ability to regulate could have important consequences for the rental housing stock, including a possible trend toward increased demolition activity. It is possible that the more restrictive conversion policies could have the unintended consequence of encouraging landowners to look to demolition.

Since Council ultimately is not able to prevent demolition, in developing a policy context to address this dynamic, Council will need to ensure that encouragement is given to the replacement of rental units through new development. Broadly speaking, encouragement must be given for the production of private rental housing in general. To help achieve its objective of maintaining and augmenting the supply of rental housing, Council will need to consider the use of a variety of incentives such as tax relief for new rental housing (this matter is currently under consideration by the Assessment and Tax Policy Task Force), development charge and fee relief, the strategic use of municipally-owned land, etc., to assist in the development of new rental housing. These kinds of incentives will be discussed further in the context of a staff report to the Council Strategy Committee for People without Homes, however, in the context of the Official Plan and particularly with respect to redevelopment applications involving the proposed demolition of rental housing, it is important that Council signal its intention to seek the replacement of rental housing when approving development applications.

A fuller discussion of Council's current demolition authority and a proposed policy to address this matter are discussed further below.

(3.2)(a)Section 33 of the Planning Act:

With the repeal of the RHPA, a municipality is limited in what it can do to prevent the demolition of rental housing, especially where an applicant obtains a building permit for new development on a property. Council will have to rely on powers under Section 33 of the Planning Act (respecting demolition permits), and in the case of the former City of Toronto, other special legislation when dealing with demolition applications.

When all or part of a municipality is designated as an area of demolition control under Section 33, no person can demolish a residential building, unless Council issues a demolition permit. Council, however, is required to issue a demolition permit where a building permit has already been issued for the property. At present, all of the former municipalities, with the exception of Scarborough, have made use of section 33 of the Planning Act to designate demolition control areas. In the past, the use of this tool has helped to ensure that consideration is given to the proper and timely redevelopment of the site following demolition.

It is recommended that Section 33 be available throughout the new City, and that Council enact a by-law (draft attached as Appendix C) which designates the former City of Scarborough as an area of demolition control, requires Council to authorize demolition permits for residential development containing six or more units, and authorizes the Chief Building Official to issue demolition permits for residential development containing five (5) or fewer units. The harmonization of the different demolition by-laws (powers delegated to the Chief Building Official) will be considered at a later date by UEDC, following the submission of a staff report.

(3.2)(b)Special Legislation:

In addition to Section 33, the former City of Toronto has special legislation which was approved by the Province in 1984, and applies to buildings containing six or more units. These powers extend beyond the Section 33 provision by permitting the former City to refuse to issue a demolition permit for up to one year, even where a building permit has been issued. The ultimate effect is that it provides Council more time to consider other ways of preserving the property, or relocating the tenants. Under this special legislation, Council also has the ability to acquire and maintain the property for residential use.

In response to Council's request, the City Solicitor reviewed and reported on the potential extension of the former City of Toronto's special demolition control legislation. The Solicitor's report (dated June 10, 1998) to the UEDC recommended that if the Committee approved such an extension, authority be granted to apply for special legislation substantially in the form of the draft Private Bill attached (see Appendix D). The draft Private Bill extends the application of the 1984 Act to the whole of the urban area of the new City. The UEDC received the report at its July 13 meeting.

The notice requirements described for condominium approvals involving conversions could also apply to demolitions subject to the City's special legislation, where the number of residential units in the building is fewer than six.

It should also be mentioned that the 1984 demolition control legislation is but one type of special legislation governing demolitions and heritage concerns in the former City of Toronto. However, it is the most important and relevant piece with respect to addressing the loss of residential housing, and the potential acquisition of property in jeopardy of being demolished. The possible extension of other related legislation will be the subject of future discussions between City staff.

(3.2)(c)Demolition Official Plan Policies:

In addition to the use of the above tools, under Section 33 and the special legislation, it is recommended that policies relating to the replacement of rental housing be incorporated in the Official Plan. Where redevelopment involves the demolition of rental housing, Council should seek the replacement of affordable rental housing, making use of available general or special legislation, in conjunction with its other official plan policies (for example, dealing with density incentives) to encourage the replacement of the maximum number of rental units, of similar type, size, and affordability. The replacement of these units would ideally, but not necessarily take place on the redevelopment site. Council could, for example, consider contributions that would assist in off-setting the loss of rental units, such as cash, land or units in other developments. Although Council's primary objective in approving an application involving demolition of rental housing must be the replacement of affordable rental housing, this objective would need to be considered and balanced with other municipal objectives which arise from the specific site's context.

The proposed replacement policy should refer explicitly to the specific tool that Council can utilize to secure replacement or alternative arrangements, namely Section 37 of the Planning Act, in those instances where an increase in height and/or density is sought. This will give clear direction to Council, particularly where there are not currently parent Section 37 policies in the existing local plans of the former municipalities.

(4)Equity Co-operatives and Co-ownerships:

The term "co-operatives" was broadly defined in the RHPA to include: equity co-operatives, co-ownerships or co-tenancies, and limited partnership co-operatives. Non-profit co-operatives were not considered "co-operatives". While these arrangements vary, they generally involve individuals having a share in the corporation or a percentage interest in the property, and exclusive occupancy rights to a particular unit. There are about 5,000 co-operative units in the City. In 1989 the RHPA was amended to make it unlawful to convert rental housing to the various forms of co-operatives. However, the TPA is silent on the issue.

Like condominiums, co-operative units are often rented. However, unlike condominiums and non-profit co-operatives, the establishment or operation of co-operatives are not governed by any statute. In most cases they are simply registered with the Province under the Co-operative Corporations Act. Prices of equity co-operative units are usually considerably less than condominium units, but financing of these units has been extremely difficult to obtain. An informal survey undertaken by planning staff indicated that only a few financial institutions in the Toronto area are prepared to extend financing to equity co-operatives. This financing problem is often used by the shareholders as a reason to convert to condominium.

While co-operatives may provide relatively affordable housing for some, the vast majority of them in the Toronto area were created through conversions which reduced the supply of rental housing. Many such co-operatives were created as a means of by-passing other statutory requirements (i.e., the 1986 RHPA, municipal conversion policies) which focussed mainly on restricting the conversion of rental buildings to other tenure forms, such as condominium. In some cases, the conversion to equity co-operative was seen as the first in a two step process to converting to condominium.

As there is no municipal legislation available to effectively prohibit their creation, City Council may wish to ask the Province for special powers to deal with this tenure form in the future. As an initial course of action, the proposed official plan policy objective confirms Council's interest in restricting the conversion of co-operatives to condominium.

(5)Conclusion:

This report has demonstrated that there is a substantial need for rental housing in the City of Toronto, and that the existing rental stock is under considerable pressure. The rental vacancy rate is very low, at a time when virtually no new units are being constructed. In addition, many existing rental units may be in jeopardy, given the recent repeal of the RHPA.

Municipalities across the Province now have fewer tools with which to protect their rental stock. A two-pronged approach has been suggested to deal with the preservation, maintenance and where possible, the replacement of rental housing. First, the report proposes new condominium conversion policies to be incorporated into the Metro Plan and applied to the entire amalgamated City. Second, several approaches for addressing the demolition of rental housing are put forward, including: the enactment of a demolition control by-law for former Scarborough, the extension of the former City of Toronto's special legislation on demolition control to the new City, and the insertion of two policies on demolition and replacement into the Metro Official Plan. As municipal demolition control powers have been substantially curtailed by the change in Provincial legislation, it is suggested that the City's focus should be placed not only on restricting the demolition of rental housing, but also, where appropriate, on the replacement of rental units in redevelopment projects.

To facilitate the objective of replacement, Council will need to apply existing legislation, and in some cases, municipal incentives.

Contact:

Ms. Barbara Leonhardt, Director, Policy and Research, 392-8148.

The Urban Environment and Development Committee also submits the following report (November 16, 1998) from the City Clerk:

Recommendation:

The East York Community Council advised the Urban Environment and Development Committee that the East York Community Council endorses the report (October 15, 1998) from the Commissioner of Urban Planning and Development Services embodied in the report (November3,1998) from the City Clerk, subject to amending Section 135.4 by deleting the words "and to consider acquiring or leasing the property where such units are at risk of being demolished" after the word "units" so that such Section shall now read as follows:

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

Background:

The East York Community Council, at its meeting on November 12, 1998, had before it the following communication (November 3, 1998) from the City Clerk, regarding Official Plan Policies and related By-laws regarding the conversion to condominium and demolition of rental housing and requesting that their comments be made available for the consideration of the Urban Environment and Development Committee at its meeting to be held on November 30, 1998.

Mr. Joseph Colussi, President, Victoria & York, Toronto, appeared before the East York Community Council in connection with the foregoing.

The Urban Environment and Development Committee also submits the following report (November 13, 1998) from the City Clerk:

The Etobicoke Community Council on November 12, 1998, received the following report:

(November 3, 1998) from the City Clerk, forwarding the recommendations of the Urban Environment and Development Committee from its meeting on November 2, 1998, in response to a report from the Commissioner of Urban Planning and Development Services, recommending Official Plan Policies, Council guidelines and by-laws that will enable the City to actively preserve the existing rental housing stock by restricting the conversion and demolition of rental housing.

The Urban Environment and Development Committee also submits the following report (November 17, 1998) from the City Clerk:

Recommendation:

The North York Community Council on November 16, 1998, recommended to the Urban Environment and Development Committee, and Council, that:

(1)the motion moved by Councillor Moscoe at the meeting of the Urban Environment and Development Committee meeting held on November 2, 1998, be adopted subject to the deletion of the amendments to 135.1 and 135.5 and that the recommendations of the Commissioner of Urban Planning and Development Services with respect to these two sections be adopted; and

(2)any buildings with two or more major work orders on them be included in the restrictions.

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

A.Moved by Councillor Feldman:

That a further clause 135.6 be added as follows:

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

(i)the building is functionally obsolete;

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

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

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

B.Moved by Councillor Flint:

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

Background:

The North York Community Council had before it a report (November 3, 1998) from the City Clerk advising that the Urban Environment and Development Committee on November 2, 1998, endorsed Recommendation No. (9) of the report (October 15, 1998) from the Commissioner of Urban Planning and Development Services, regarding Official Plan policies and related by-laws regarding conversion to condominium and demolition of rental housing, and requested that any comments from Community Councils be forwarded to the November 30, 1998 meeting of the Urban Environment and Development Committee.

The Urban Environment and Development Committee also submits the following report (November 16, 1998) from the City Clerk:

Recommendation:

The Scarborough Community Council, on November 12, 1998, referred this matter back to the Urban Environment and Development Committee without recommendation.

Background:

The Scarborough Community Council had before it a communication (November 3, 1998) from the City Clerk advising that The Urban Environment and Development Committee, at its meeting held on November 2, 1998, directed that a copy of this report and the Committee's action be forwarded to the Community Councils for review at their meetings scheduled to be held on November 12, 1998, with a request that their comments be made available for the Urban Environment and Development Committee's consideration at its November 30, 1998, public meeting.

The Urban Environment and Development Committee also submits the following report (November 16, 1998) from the City Clerk:

Recommendation:

The York Community Council on November 12, 1998, having considered the motions moved by Councillor Moscoe at the Urban Environment and Development Committee on November 2, 1998 regarding the report (October 15, 1998) from the Commissioner of Urban Planning and Development Services, recommended to the Urban Environment and Development Committee that :

(1)Recommendation No. 2(a), Section 3.2.3 Conversion and Demolition of Rental Housing, with its amendments to paragraphs 135.1, 135.3, 135.4 and 135.5, be endorsed;

(2)paragraph 135.2 be amended by:

-deleting the words "including" and substituting the words "exclusive of" in lieu thereof; and

-deleting the words "containing six or more rented residential units" and by substituting the words "where 33 percent or more of the units are tenanted" in lieu thereof;

so that Recommendation No. (2)(a), paragraph 135.2 shall now read as follows:

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

(3)the addition of the following new Recommendations (12) and (13), be endorsed:

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

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

Background:

The York Community Council had before it the following communications:

(i)(November 3, 1998) from the City Clerk advising that the Urban Environment and Development Committee on November 2, 1998 considered a report (October 15, 1998) from the Commissioner of Urban Planning and Development Services; and referring the motions of Councillor Moscoe to the Community Councils and the Commissioner of Urban Planning and Development Services for review and comment thereon to the November 30, 1998 meeting of the Urban Environment and Development Committee; and

(ii)(November 12, 1998) from Mr. Richard Kuchynski, Director of Planning and Development, Goldlist Properties, Toronto, advising of their concerns regarding the issue of affordable rental housing; that Goldlist has a solid record of working cooperatively with all stakeholders to address important issues; that application has been made to amend the Official Plan and Zoning By-law No. 1-83 of the former City of York, to permit the construction of two new 25-storey condominium buildings of 125 units each, and 36 townhouses for a total of 286 units; the development would entail the demolition of two existing high rise rental buildings containing a total of 148 rental units and 98 hotel suites; that the Urban Planning and Development Services Department has recommended that Council adopt new official plan polices to regulate the conversion to condominium and demolition of rental housing in response to the recent repeal of previous restrictions on conversion and demolition by the Province's new Tenant Protection Act; that the recommendations tabled by City staff are counterproductive and will not lead to enhancements in the quality or supply of Toronto's rental housing stock; urging the Community Council to reject staff's recommendations; and that in order to stimulate the development of more rental housing in Toronto, additional tools and initiatives are needed, and recommending that the City of Toronto:

(1)Establish an administrative structure to actively encourage partnerships to combine affordable (often municipally owned) real estate with investment capital to produce private sector market units.

(2)Pass resolutions and implement an action plan to press the provincial and federal governments to acknowledge the rental housing problem and contribute to a solution by allowing PST and GST exemptions on building materials and other development expenses (especially services) that are dedicated to production of rental units.

(3)Establish a task force to initiate dialogue with industry representatives about municipal assurances and incentives that will encourage them to build new units.

(4)Provide exemptions in any relevant municipal policy respecting buildings that require structural repairs and improvements that are not economically feasible; and

(5)Take action that will capitalize on low interest rates and the development of a new regulatory climate that has returned Ontario's rental housing industry to the brink of viability.

The Urban Environment and Development Committee also submits the following report (November 23, 1998) from the City Clerk:

Recommendation:

The Toronto Community Council:

(1)recommended to the Urban Environment and Development Committee that the Commissioner of Urban Planning and Development Services be requested to provide monthly reports to the Council Strategy Committee for People without Homes, and to all Members of Council on:

(a)units affected by condominium conversion applications, and the cumulative total of those units; and

(b)units affected by potential demolition applications, including units subject to rezoning applications and/or building permit applications, and the cumulative total of those units.

In addition to the foregoing recommendation, the Toronto Community Council reports for the information of Urban Environment and Development Committee having endorsed the recommendations contained in the communication (November 3, 1998) from the City Clerk, Urban Environment and Development Committee forwarding the Committee's actions of November 3, 1998 respecting Official Plan Policies and Related By-laws regarding the Conversion to Condominium and Demolition of Rental Housing.

Background:

The Toronto Community Council, on November 12, 1998 had before it a communication

(November 3, 1998) from the City Clerk, Urban Environment and Development Committee forwarding the Committee's actions of November 3, 1998 respecting Official Plan Policies and Related By-laws regarding the Conversion to Condominium and Demolition of Rental Housing and requesting Toronto Community Council's comments to be made available for the meeting of the Urban Environment and Development Committee to be held on November 30, 1998.

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The Urban Environment and Development Committee reports, for the information of Council, also having had before it the following communications:

(i)(November 11, 1998) from Mr. Richard Kuchynski, Director of Planning and Development, Goldlist Properties Inc., recommending that the City of Toronto:

(1)establish an administrative structure to actively encourage partnerships to combine affordable (often municipally owned) real estate with investment capital to produce private sector market units;

(2)pass resolutions and implement an action plan to press the Provincial and Federal Governments to acknowledge the rental housing problem and contribute to a solution by allowing PST and GST exemptions on building materials and other development expenses (especially services) that are dedicated to production of rental units;

(3)establish a task force to initiate dialogue with industry representatives about municipal assurances and incentives that will encourage them to build new units;

(4)provide exemptions in any relevant municipal policy respecting buildings that require structural repairs and improvements that are not economically feasible; and

(5)take action that will capitalize on low interest rates and the development of a new regulatory climate that has returned Ontario's rental housing industry to the brink of viability;

(ii)(November 11, 1998) from Mr. Robert L. Burton, Burton-Lesbury Holdings Limited, Burton-Lesbury Partners; advising that optimum conditions require that Toronto have flexibility to exempt specific sites or areas from rental housing protection; that there are far too many very old properties and deteriorating areas that need revitalization and redevelopment for a healthy community; and requesting the Committee to consider only the public interest and the future of Toronto, and support the flexibility that is necessary;

(iii)(November 19, 1998) from Mr. Robert L. Burton, Burton-Lesbury Holdings Limited, Burton Lesbury Partners, submitting an additional argument for consideration by the Urban Environment and Development Committee: that the proposed Official Plan Amendment with respect to the conversion to condominium and demolition of rental housing is contrary to law, and should, therefore, be rejected in its entirety;

(iv)(November 20, 1998) from Ms. Peggy Moulder, Property Manager, Gloucester Gate Inc., urging the Urban Environment and Development Committee, and City Council, to be aware of the interests of all residents of the City of Toronto when reviewing the proposed changes to the Official Plan with respect to the conversion to condominium and demolition of rental housing, and to realize that perpetuating the provisions of the Rental Housing Protection Act as they relate to existing co-ownerships serves the interests of no-one;

(v)(November 25, 1998) from Mr. Lawrence H. Zucker, Zagan Zucker Feldbloom Shastri, Barristers and Solicitors, advising that they are the solicitors for 1212763 Ontario Ltd., an owner of apartment buildings in the City of Toronto; expressing concerns with the proposed Official Plan policies and their impact on an owner's ability to convert rental residential units to condominium tenure which, in their view, is inconsistent and incompatible with the Provincial Government's repeal of the Rental Housing Protection Act;

(vi)(November 26, 1998) from Ms. Phyllis Dutchak, Strathcona Mews Limited, advising that Strathcona Mews (Strathcona) is totally opposed to the proposal not to permit equity co-operatives, such as Strathcona, to convert to a condominium; and setting out the reasons therefor;

(vii)(November 27, 1998) from Ms. Jane Pepino, Q.C., Aird and Berlis, Barristers and Solicitors, on behalf of Goldlist Properties Inc., requesting, pursuant to the provisions of the Planning Act, to be notified of the adoption of any Official Plan Amendments by the City of Toronto for the Official Plans of each of the former municipalities with respect to this matter;

(viii)(November 30, 1998) from Ms. Anne Golden, Chair, Homelessness Action Task Force, advising that the upcoming report of the Task Force will emphasize that:

(1)the shortage of affordable housing is a primary cause of homelessness in Toronto;

(2)preserving existing housing is a key strategy to ensure affordable housing supply;

(3)preserving private rental apartments is the easiest and cheapest way to address affordability, as rental apartments constitute the largest segment of the moderate-priced rental market;

(4)the City should use the tools available to help both preserve and create affordable housing, including Official Plan policies, zoning by-laws, development approvals, etc.;

(5)conversion to condominiums is a potential threat to the goal of preserving private rental apartments, and therefore needs to be addressed; and

(6)any approval of conversion of existing rental properties to condo in effect confers "windfall gains" to the current owner, and it is therefore reasonable for the City to attach conditions to such approval, for example, by ensuring the replacement of lost low-cost units;

(ix)(November 30, 1998) from Ms. Helen Rollerson, President, 1901 Bayview Avenue, EastYork, advising that the proposed amendments regarding conversion of equity co-op buildings to condominiums will compound what is already a very painful problem in her building; that because banks will no longer finance equity co-ops, it is difficult to sell their units; and requesting that equity co-ops converted before the second version of the Rental Act was passed, be exempted from the proposed amendments; and

(x)(November 30, 1998) from Ms. Cynthia A. MacDougall, McCarthy Tetrault, Barristers and Solicitors, on behalf of Greatwise Developments Corporation; advising that in their view, the policies proposed are too restrictive with respect to the demolition and conversion of rental housing, that there are public benefits associated with redevelopment, particularly with under-developed sites in strategic locations; and suggesting that further consideration be given to the policies, in order to provide for reasonable balance between the objectives of maintaining rental housing stock and redeveloping under-utilised sites.

The following persons appeared before the Urban Environment and Development Committee in connection with the foregoing matter:

-Mr. Bill Solomn, resident of the City of Toronto, expressing concerns with the lack of affordable housing in the City of Toronto;

-Mr. David Alexander, Q.C., Alexander and Associates, legal Counsel for 10 buildings containing 450 units of co-ownership housing, expressing his clients' wish to convert their units to condominiums to allow them to attain mortgage financing at reasonable rates of interest; and filed a written submission with respect thereto;

-Ms. Kimberly L. Beckman, Davies Howe Partners - representing clients who have co-ownership in buildings where, due to legislative changes that have occurred, the financial assistance that had been available is now no longer available, with the result that some co-owners lost their units, and stating that the only solution to this problem is to covert to condominiums;

-Ms. Peggy Moulder, Property Manager, representative for Gloucester Gate Residences Inc., expressing concerns regarding the financing of the units as co-ownership of a property is relatively unknown therefore owners have been tied into high interest, closed mortgages which would change if converted to condominiums;

-Mr. Hugh Wilkins, Morris Rose Ledgett, advising that he has a number of clients who have co-ownership apartments whose ability to finance the units is becoming increasingly difficult; noting that converting these units to condominiums will not affect rental housing in the City;

-Ms. Paulette Sander, Toronto, advising that tenants purchased their own units in the building but due to the fact that the banks do not recognize co-ownership as being a legally owned apartment, they are having difficulty re-financing their units and requested the City to allow conversion into condominiums;

-Ms. Phylis Dutchar, Toronto, requesting that the City allow condominium conversion so people who have co-ownership units can get their life in order as the banks will only deal with them if their units are converted to condominiums;

-Ms. Jane Pepino, Aird and Berlis, requesting that the City ensure that all policies that are placed in the Official Plan reflect the interest of tenants but do not regulate the conversion to condominium of co-ownership apartments because they do not provide any incentives to add new rental units to the existing housing stock in Toronto; requesting that a Task Force be established to initiate dialogue with industry representatives about municipal assurances and incentives that will encourage the building industry to build new rental units;

-Mr. Larry Chilton, Toronto, informing of three recent situations respecting rooming houses in the City and suggesting that further research is needed; there not being enough knowledge on the subject matter to make a decision; and filed a written submission with respect thereto;

-Mr. Kenneth Hale, on behalf of South Etobicoke Community Legal Service, which provides a broad range of legal services to low-income residents; advocating the preservation of affordable housing in the City and requesting that all rental units, regardless of market rent, be given the protection of the Official Plan provisions; and filed a written submission with respect thereto;

-Mr. George Goldlist, Goldlist Properties Inc., advising that Rent Control and the Rental Protection Act introduced by previous governments stopped the building industry from building rental housing and requesting the Committee to send a message that this City desperately needs affordable housing and not put obstacles in front of the building industry in that regard;

-Mr. John Morielli, Property Manager, expressing the need for co-ownership units being converted to condominium status to allow for alternative ownership, noting that it would not affect rental housing in the City;

-Mr. Arthur Birnbaum, Toronto, expressing his desire to have his unit converted into condominium;

-Mr. Howard Tessler, Metro Tenants Association, urging the City to do everything within its legal and political powers to preserve the existing stock of residential rental housing to ensure that tenants currently at risk of losing their housing to the condo wrecking ball are spared; and filed a written submission with respect thereto;

-Ms. Elinor Mahoney, Parkdale Community Legal Service, stating that allowing equity conversion will affect rental housing and jeopardize thousands of tenants and requesting additional controls with respect to demolition of rental buildings; and filed a written submission with respect thereto;

-Mr. Ken Johnston, Toronto, expressing his desire for conversion to enable co-ownership units to acquire mortgages at reasonable rates; noting that under the present system some banks require up to a 50 percent down payment prior to granting a mortgage;

-Mr. Steven Keyser, President, Urban Development Institute, stating that the subject matter was a very complicated issue and requesting that the Committee defer the matter and engage the action of people within the building industry to help find a solution that would be beneficial to tenants and the industry; and

-Mr. Gary Griesdorf, Executive Director, Greater Toronto Apartment Association, requesting that the City reconsider its position on condominium conversion to stimulate the economy.

Councillor J. Layton, Don River (Ward 25) also appeared before the Urban Environment and Development Committee in connection with the foregoing matter.