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Bridge Beat

Jun 13, 2016

Inclusionary Zoning: Evolving Positions and one Big Opportunity

On May 18, the Provincial Government introduced enabling legislation for Inclusionary Zoning. Almost immediately, the Development Industry reacted with a Statement of Intent.

If you are thinking BILD and OHBA came out with the usual It-will-all-be-fine-if-you-lower-our-taxes position, you are mistaken. In a previous blog post, I expressed concern that the usual suspects would say the usual things. However, this is not turning out to be the case and we have before us, collectively, a unique opportunity to forge something new in affordable housing.

BILD and OHBA have come out with a Statement of Intent in which they clearly articulate, that the development industry has a role to play in building more affordable housing. In early May, I chaired a panel at the Land and Development Conference with Stephen Diamond (a signatory to the Letter of Intent) on my panel. The way he framed the breakdown of responsibility between the public and private sectors was that the private sector would build it, but could not, and should not, take responsibility for addressing income inequality. In an affordable rental scenario, for example, the cost of supporting a tenant paying less than market is rightly a societal responsibility, not a private one. However, in the Statement of Intent, the Private sector makes it clear, that it is not looking for pure cost recovery - it is willing to absorb certain administrative costs, and put in equity required to finance the construction of the affordable units. You can read the Statement of Intent at the link below.

I know many housing advocates will say that this is not far enough - but I urge them to pause a moment to reflect on this as it represents a change in Industry's position. Here are three changes I have observed in the last 90 days.

1. THE INDUSTRY IS LISTENING - The industry is focused on housing affordability.  In addition to the Land and Development Conference session, I also chaired a session at BILD conference in mid-May. Both were packed. As a result of this focused attention, the industry’s level of sophistication in understanding affordable housing (which is complex), is growing. If you want to see my housing overview presentation to BILD, I have added in a link below.  

2. AFFORDABLE HOUSING DOES NOT HURT SALES - The experience of large developers like Daniels and Tridel at Regent Park, Alex Park and Villaways (Don Mills and Leslie) is that selling condos right beside social housing is not a big deal, and nor is incorporating affordable ownership units into condos. And judging by our session at BILD, they are not afraid to say so. 

3. THE INDUSTRY’S POSITION IS OPENING UP- Not long ago, the Industry’s position on affordability revolved around reducing government impositions. In the Statement of Intent, it is directed to partnerships aimed at creating more affordable units. This is a welcome change.

There is still a long way to go in this discussion. A quick comparison of the Province’s web site and the Statement of Intent yields some contrasts and a host of issues to discuss. For example - should developments with less than 100 units be off the hook? The Industry says yes, the Province - not so much. I will return to that in a later blog as these differences require additional thought.

I titled this blog with "One Big Opportunity". This is because we are working these issues at a time when we have both alignment of all three levels of government and a receptive development community. There are others who need to be looped in:   the Not-for-Profit Sector and the impact investment community. Together, we have a chance to come up with an inclusionary zoning regime that fits into a broader housing policy, which, in turn, provides broader housing choices to more people.

John Fox

Bill 204 
BILD/OHBA Statement of Intent 
My BILD Presentation

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Commercial Real Estate Law

Keywords

Land and Development  |  Development Industry  |  Bill 204  |  Private sector  |  affordable housing  |  OHBA  |  BILD  |  Inclusionary Zoning

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