Inclusionary Zoning – Submission to Ontario Ministry of Municipal Affairs and Ministry of Housing Regarding Proposed Regulation

The province is consulting on inclusionary zoning. This is an opportunity to include affordable housing in new developments.

Attach the city’s comments and my letter.

Inclusionary Zoning – Comments from the City of Ottawa Regarding Proposed Regulations

Here’s my letter

Director
Ministry of Municipal Affairs and Housing
Local Government and Planning Policy Division
Provincial Planning Policy Branch

Dear Ms. Miller:

January 31st, 2018

My name is Mathieu Fleury, I am the City Councillor for Ward 12 (Rideau-Vanier) in Ottawa and Chair of Ottawa Community Housing (OCH). I wanted to reach out to you, to supplement the official letter submitted by the City of Ottawa on EBR File number 013-1977. I want to highlight the importance of inclusionary zoning and share some reflections on how the province can support the City of Ottawa in fostering the development of affordable housing units that align with our combined goals of having mixed-income neighbourhoods.

As council representative for one of the lowest income neighbourhoods in Ottawa, I want to
share some thoughts on a model that could achieve the goals for all municipalities. I will use OCH in my example as they are the largest landlord in the City of Ottawa, and I have extensive experience working with the organization. However, the proposal could apply to any other housing providers.

The goals of inclusionary zoning are to utilize a land use planning tool that would allow the City to require development proposals to include affordable housing as part of new developments. I believe that any affordable housing units that are created through inclusionary zoning should remain part of the affordable housing stock, prioritizing residents who are on the waiting list for affordable accommodations. Landowners/developers would be required to enter into agreements with the City. These agreements would be registered on title and enforceable against subsequent property owners to ensure the units created through the development remain affordable over time. In this scenario, the model can be used for the rental market or the condominium market as the units would be acquired and leased by the City through OCH in the same manner as we do current for our units. This would ensure that the Landlord Tenant Board regulations would apply to each tenant, as it does today. It would also ensure that the units are rented by priority-based selection from the Social Housing Registry.

Specific to condominiums, OCH would become the “owners” of the affordable condo units and would fulfil all responsibilities of condo owners. The condo by-laws would be amended to allow OCH to rent these units on behalf of the City. In the rental market, the units would be acquired by OCH, and OCH would lease and operate the allocated affordable units in each development.

We believe the mechanism that would best facilitate these gains for the City of Ottawa would be to use an increase in density to a given project as leverage for allocating affordable units within that project, or apply a threshold for a new building that complies with zoning but exceeds a certain number of units.

In any development, the units that bring in the most value per square foot are the ones occupying the top floors (the increase in heights). For example, a project with a permitted 6-story height
receives approval for a 9-story development opportunity; the additional 3-story height is generally the most valuable part of the development.

An agreement would be reached that would base the number of affordable units created for that project on a formula taking into consideration the value of the uplift (increase in density), and the

total amount of units in the development. The development community is able to leverage the land value, the professional expertise to bring a project to fruition, and City approval (timelines).

I do not believe developers should have the flexibility to provide cash in lieu of the affordable

housing units or affordable units in another location as this would detract from the goals of creating affordable housing in mixed-income buildings. This is key as the City would not be able to extract the financial value of a unit into a 1 for 1 ratio based on approval timelines, land cost and building cost.

In the above scenario, developers get the uplift with a known cost (construction of units), we allow for new capacity for affordable units in Ottawa with low risk relating to capital investment leveraged by the industry, and we protect the affordability of the units over time by allowing OCH to take oversight of these units city-wide.

These two practical examples are meant to be high-level reflections that reduce the risk of confusion, over or under estimating the value of the units, and bring more certainty to both developers and the City. The inclusionary zoning would apply equally city-wide and would be triggered by an increase in density or when a development reaches a certain number of units. Consultations would be required to further establish those criteria and an analysis would need to be done to identify a formula to calculate, the size, location, and number of bedrooms that are appropriate for the developments.

Finally, I am pleased that the Province is moving forward with inclusionary zoning. If done right, I believe it could be a useful tool to formalize the development of affordable housing. It is important for municipalities that the goals of the Planning Act remain. Municipalities should not be burdened with complex financial requirements or additional costs for development. These two examples would generate a predictable number of affordable units in mixed-income buildings, and create more diversity in neighbourhoods across our City.

Thank you for your consideration, Mathieu Fleury