Developers and municipalities: what should you know about Bill 108?
Bill 108, the More Homes, More Choice Act, received Royal Assent on June 9. Through amendments to 13 different statutes, it implements significant changes to the rules and procedures for housing development in Ontario.
What changes does Bill 108 introduce, and how will it affect developers and municipalities?
This article will explore four of the most important aspects of the Bill and highlight some of the key changes.
1. Development charges
Ontario’s Development Charges Act (DCA) establishes and regulates a set of fees collected by municipalities related to the construction of new homes. These fees are used by the municipality to fund a range of services to support these new homes; everything from sewers to road systems.
Schedule 3 of Bill 108 makes a number of changes to the DCA.
For developers, it introduces some new development charge exemptions for certain redevelopment, including the removal of development caps for additional dwellings added to an existing residential dwelling, and extending the exclusion to some ancillary structures.
Perhaps more significant, the Bill introduces a new payment scheme for development charges for rental housing, institutional, industrial, commercial and non-profit housing. Unless the developer and the municipality enter into an agreement to the contrary, most of these charges will be deferred and paid in six annual instalments, beginning on the date of occupancy. For a non-profit housing development, payments will be made over 21 annual installments. However, the municipality is entitled to charge interest on the deferred portion of the development charge, at a maximum rate not yet prescribed.
There are also new rules for when the development charge rate is calculated for the uses listed above. These are triggered by:
- The date a site plan application is filed for the development under section 41 of the Planning Act or section 114 of the City of Toronto Act ;
- If the development is not subject to site plan control, the date of an application for a zoning by-law amendment under section 34 of the Planning Act; or
- If neither application is required, then the development charge will be calculated in the previous way.
For municipalities, the Bill limits the kinds of services a municipality can fund with the proceeds of the development charges. The list of what can be funded includes, but is not limited to:
- Water supply, waste water and storm drainage;
- Services related to a highways;
- Electrical power services; and
- Policing, fire protection and ambulance services.
Note that this list does not include soft services like parking, libraries and parkland. These are funded under new Community Benefit Charge provisions of the Planning Act (see below).
2. Planning Act amendments
Schedule 12 of Bill 108 contains a number of changes to the Ontario Planning Act, in particular with regard to charges for community services.
As mentioned above, while funding for a municipality’s core “hard services” will continue to be provided through development charges, other charges will now be consolidated under a single Community Benefit Charge (CBC). The CBC will also cover parkland contributions and current section 27 benefits. In order to collect the charge, a municipality will be required to pass a by-law imposing CBCs to pay for “soft services” and facilities required because of the development, such as parks, libraries and child-care facilities. The amount to be paid will be a percentage of the value of the land at the valuation date. Developers are also able to make in-kind contributions to off-set their CBC.
The Bill also amends inclusionary zoning provisions (with respect to the mandatory provision of affordable housing for certain developments). While municipalities were previously able to determine where these areas would apply through official plan policy, inclusionary zoning will now be limited to major transit areas.
3. Local Planning Appeal Tribunal (LPAT) and Planning Act appeals
Bill 108 makes a number of amendments to the Local Planning Appeal Tribunal Act, affecting the practices and procedures of the Local Planning Appeal Tribunal (LPAT). The Tribunal hears appeals of decision related to a range of land use matters, including official plan and zoning by-law amendments, committee of adjustment decisions, and subdivision approvals.
The eligibility test to appeal to the LPAT is broadened and limitations with respect to the two-part appeal test of conformity and consistency have been repealed. In addition, hearings have returned to the de novo format previously applicable before the former Ontario Municipal Board, with the reintroduction of oral evidence and the examination of witnesses. The LPAT will now also have greater authority to make binding decisions to approve, refuse or modify the issue under appeal in first instance, without the obligation to remit the matter to municipal council for a second decision. These amendments are reflected in the relevant provisions of the Ontario Planning Act.
The Bill also amends the Planning Act to re-shorten timelines for making planning decisions related to the following:
- Official plans (from 210 to 120 days);
- Zoning by-laws (from 150 to 90 days); and
- Plans of subdivision (from 180 to 120 days).
As a result of these amendments, the appeal process will more closely approximate that of the Ontario Municipal Board, prior to the enactment of Bill 139 last year.
4. Heritage property
Changes by Bill 108 to the Ontario Heritage Act aim to make the designation process more consistent and transparent. A heritage designation places restrictions on the alteration or demolition of a property.
Municipal councils must now pass a by-law designating a place as a heritage property within 120 days after its original notice of intention. After this period, the notice of intention is treated as withdrawn.
Property owners will have new ways to appeal heritage decisions. Previously, an objection to a heritage designation of a property was referred to the Conservation Review Board (CRB), but municipal councils were only obliged to consider the recommendation of the CRB, and their decisions were not binding. As a result of the amendments, appeals to a designation will now be made to the LPAT, which has the authority to overrule the decision of a municipality.
The Bill also implements amendments to the rules regarding the demolition of heritage buildings and structures, with additional restrictions placed on the removal of a property’s heritage attributes.
For developers, there are sweeping changes to the development regime, particularly when it comes to development charges and land use planning processes.
For municipalities, amendments affect how parks, recreation centres and other community amenities are funded. As well, the amendments to the heritage designation process now involves an administrative tribunal, the LPAT.
Many of the regulations related to Bill 108 are still in draft form. We will be following the rollout of Bill 108’s regulations closely, so continue to watch this space for further updates.
If you have further questions about how these changes will affect you, contact our Municipal, Land Development & Expropriation Team.