July 2019
Government Proposes Changes to Regulations Under the Development Charges Act

2019-07-16 3:52:48 PM


Schedule 3 of the recently passed Bill 108, More Homes, More Choice Act, 2019 makes amendments to the Development Charges Act. The Ministry of Municipal Affairs and Housing is proposing additional regulations to prescribe matters, which the government says will help reduce development costs and increase the housing supply.

The proposed regulations are available for comment until August 21, 2019. To submit a comment, please click here.

Below is a summary of the Ministry’s proposed regulations:

Transition:

Schedule 12 of the Planning Act under Bill 108 proposes a regulation whereby municipalities would transition to the new community benefits authority by January 2021, if they wish to collect for the capital costs of community benefits from new developments.

Under the Development Charges Act, if this regulation is passed, municipalities would generally no longer be able to collect development charges (DCs) for discounted services (i.e. soft services, including libraries, general administrative costs, community centres, fire protection, police protection, and waste disposal).

Scope of Types of Development Subject to Development Charges Deferral:

Amendments to the Development Charges Act made by Schedule 3 of Bill 108 would defer development charges for rental housing development, non-profit housing development, institutional development, industrial development, and commercial development until occupancy.

The proposed regulation defines what constitutes the type of development that defers development charges. The proposed definitions are “construction, erection or placing of one or more buildings or structure for or the making of an addition or alteration to a building or structures for…”

Rental housing development:

  • “Residential purposes or more self-contained units that are intended for use as rented residential premises”.
     

Non-profit housing development:

  • “Residential purposes by a non-profit corporation”.


Institutional development:

  • “Long-term care homes;

  • Retirement homes;

  • Universities and colleges;

  • Memorial homes;

  • Clubhouses or athletic grounds of the Royal Canadian Legion; and

  • Hospices”.


Industrial development:

  • “Manufacturing, producing or processing anything,

  • Research or development in connection with manufacturing, producing or processing anything,

  • Storage, by a manufacturer, producer or processor, of anything used or produced in such manufacturing, production or processing if the storage is at the site where the manufacturing, producing, or processing is occurring”


Commercial development:

  • “Office buildings as defined under subsection 11(3) in Ontario Regulation 282/98 under the Assessment Act; and

  • Shopping centres as defined under subsection 12(3) in Ontario Regulation 282/98 under the
    Assessment Act."


Period of Time for Which the Development Charge Freeze Would Be In Place

The Ministry is proposing to freeze a development charge for two years, which the government says will encourage development to move to the building permit stage. The freeze would occur from the date the site plan application is approved. In the absence of the site plan application, the freeze date would be two years from when the zoning application was approved.

Interest Rate During Deferral and Freeze of Development Charges

Municipalities, under amendments to the Development Charges Act in Schedule 3 to the More Homes, More Choice Act, 2019, would be able to charge interest on development charges payable during the deferral. Municipalities may also charge interest during the development charge freeze from the date the applicable application is received, to the date the development charge is payable.

The Ministry is proposing to not prescribe a maximum interest rate that may be charged on DC amounts that deferred or on DCs that are frozen.

Additional Dwelling Units

Regulation 82/98 currently prescribes that existing single detached dwellings, semi-detached/row dwellings and other residential buildings as buildings in which additional residential units can be created without triggering a DC, as well as rules relating to the maximum number of additional units and other restrictions. A proposed regulation would amend this so that units could also be created within ancillary structures to these existing dwellings without triggering a DC.

It is also proposed that the following be exempt from DCs:
 

  • One additional unit in a new single detached dwelling;

  • Semi-detached dwelling; and

  • Row dwelling, including in a structure ancillary to one of these dwellings.
     

A third proposed regulation is that within other existing residential buildings, the creation of additional units comprising 1% of existing units would be exempt from DCs.

For more information, please see below:

MFOA: Development Charges


 


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