New housing legislation would pick municipal pockets to ‘line the pockets of developers,’ Layton says

Toronto Councillor Michael Layton

By Chris Fox, CP24.com

A Toronto city councillor says that Ontario’s proposed legislation to create more affordable housing amounts to “picking municipal pockets to line the pockets of developers.”

Ward 20 Coun. Mike Layton made the comment during a news conference at Queen’s Park on Thursday, in which he released an open letter from 60 housing and poverty advocacy organizations that urges provincial leaders to rethink legislation that they say would “subvert efforts to create affordable housing” rather than supporting them.

The legislation, if approved, would allow municipalities to create a new inclusionary zoning category, wherein developers of new condominium buildings would be required to make five to 10 per cent of all units affordable.

The legislation, however, stipulates that municipalities would have to pay developers 40 per cent of the cost of making the units affordable. The legislation would still permit municipalities to obtain community benefits through the Community Planning Permit System but would not allow for community benefits to be obtained through Section 37, which is reserved for instances where a last-minute zoning variance is required.

Layton said that the legislation would also only require that the units remain affordable for a period of up to 30 years whereas similar policies in other jurisdictions have called for the units to be affordable for up to 99 years.

Under the proposed legislation, developers would also get to choose whether the affordable units would be rentals or made available for purchase.

“To be honest cities are already making deals better than this with developers. Many municipalities simply won’t undertake this strategy because it will cost too much,” Layton said. “The province must put the financial health of municipal governments ahead of the profits of developers.”

The letter from housing and poverty advocacy organizations says that the draft legislation “inexplicably shifts” the cost of building affordable housing from developers to taxpayers, an approach that “flys in the face” of best practices from across North America.

The letter says that as a result the legislation would only result in the creation of a “small number of ownership units at shallow subsidies over a short term,” effectively passing “the affordable housing crisis on to the next generation.”

“Municipal funds are generally best spent on deeper subsidy programs that the development market can’t address, not on payments to developers,” the letter states. “There is no reason for Ontario to ignore best practice and the preponderance of public policy by having taxpayers subsidize the highly profitable development industry.”

Speaking with reporters, Layton said that the province should “give cities the power to shape their own housing policies” rather than introducing legislation that he says would “favour developer bottom lines over the health of city budgets.”

He conceded that some developers may argue that the costs of building affordable housing will be passed on to consumers but he rejected the validity of that argument.

“Developers will claim that the cost will be passed on to cash-strapped homebuyers but let me ask you this: do developers currently sell their units for less than the market allows? The answer is no. Developers will always charge what the market will pay, not the cost reflected in fees from the cities.”
Province had asked for public feedback

The province had provided stakeholders and members of the public until today to submit feedback on the draft legislation.

In a statement provided to CP24, Housing Minister Peter Milczyn said that inclusionary zoning is an “important tool” to get more affordable housing built but he stressed that the draft legislation is only a jumping off point for discussion.

“We have received a lot of good feedback during the consultation period. We have met, and will continue to meet, with municipalities, housing advocates, and other stakeholders to hear their ideas on how we can create more affordable housing,” he said. “The current proposal is only a draft for discussion. We will be looking at all options in the final proposal, including increasing the number of affordable units developers are required to set-aside and the required municipal contribution. “
According to the province, there are currently inclusionary zoning polices in place in communities across the world, including in about 500 municipalities in the United States.