Provincial changes to the development process could mean communities experiencing growth and the new residents moving in will have fewer resources like child care, parks and other amenities with less cash from developers to pay for them, city officials warn.

As part of an omnibus bill reforming 13 separate pieces of legislation, Premier Doug Ford’s government is proposing big changes to how and where development gets built in a booming Toronto and elsewhere in the province.

One fine-print detail in that Bill 108, titled the More Homes, More Choice Act, is a significant shift in how the city can charge developers wanting to build taller and denser than the rules allow.

A new “community benefits charge” would combine three separate tools planners and cities have now to secure things like child care space, parkland and cash for services and infrastructure.

Since the legislation was tabled last week, city planners and lawyers have been combing through the sometimes vaguely-written bill in order to understand the impact, with, they say, little additional information from the province.

“In the absence of implementation details, city staff are unable to provide detailed conclusions regarding the impacts that Bill 108 will have on the city from a financial impact, planning approval and appeal process and longer-term city-building perspective,” a memo sent May 9 to all council members reads.

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What is understood, is with a cap on the amalgamated charge proposed by the province, there is a concern cities will wind up with less cash or direct benefits from new buildings. In Toronto, where high-growth neighbourhoods are already seeing both hard infrastructure, like pipes and wires, and community infrastructure like schools at or over capacity, councillors worry the changes will create less livable neighbourhoods.

“My focus is more around my concern about how we continue to deliver a livable city,” said the city’s chief planner Gregg Lintern in an interview. “In the context of building more housing it can’t be to the detriment of everything else.”

Though the overall financial impact of the changes is still unclear because of the lack of information about how the new charge will work, city staff believe there is a considerable risk that the new rules will end up costing high-growth areas like Toronto.

In a statement, a spokesperson for Municipal Affairs Minister Steve Clark likened part of the current system to “slush funds” — invoking language used by Doug Ford and his brother, late mayor Rob Ford, during their days at city hall.

“Our government is taking the politics out of Toronto’s planning decisions,” read a statement, saying the current system is broken. “Councillors are able to make deals directly with developers, out of public view, at times negotiating vanity projects, in exchange for more density.”

The statement called money that requires a motion on a public agenda and a vote of full council “slush funds that the councillor manages and spends with no oversight or accountability.”

There are currently two separate and important tools for cities in the Planning Act that are spelled out under sections 37 and 42. Sometimes called density bonusing or parkland dedication, the tools are also often referred to by their section number (as in “section 37 funds”).

Section 37 allows cities to extract cash or in-kind benefits for the local area where a larger development has been proposed through negotiations that involve the developers, city staff, the local councillor and lawyers from both sides. During those negotiations, it may be agreed that the developer provides the cash toward something like a child care centre or provide the actual space for a centre on the development site. The negotiations, depending on the scale of the development applied for, can result in millions of dollars worth of benefits for the community, including the inclusion of affordable housing units, park improvements, public art and new recreation space.

Section 42 allows planners to demand parkland on the site of a development or cash-in-lieu of parkland, where appropriate. The amount of parkland required is based on the type and size of the development and where it’s located. In designated priority areas, the city can require as much as 0.4 hectares of land per 300 residential units, with a cap of 10 to 20 per cent of the site depending on the total size of the area, or the equivalent cash.

Both of these tools can be used on a single development application.

Separately, the city has another tool called development charges, which are fees all developers pay on top of section 37 and 42 at the time they get their building permits in order to help cover the cost of infrastructure and services to support the new building, such as transit lines, water and sewer mains, and policing. Development charges are paid at a set rate based on the number and type of units and whether the space is residential or non-residential.

The principle underlying all three specific tools is that growth should pay for growth. While the charges do not completely offset the cost to cities like Toronto — where 17,000 units are approved on average annually and where the downtown core remains parkland deficient — the principle recognizes that the taxpayer alone should not pay for the added pressure on roads, subway platforms, their local library collection and more that come with new development.

What the province has newly proposed affects all three tools. It would overwrite section 37 to create one new “community benefits charge” while barring the city from using both the new section 37 and the parkland tool (section 42) — making it an either-or scenario.

The legislation also changes how development charges work, allowing them to only apply to infrastructure like sewers and subway lines but not libraries and child care centres — what the province considers “soft services” that can be paid for out of the new community benefits charge.

That new charge would be capped at a yet to be specified percentage of the land value of any development site.

Significantly, Lintern said the planning team worries the new legislation would remove the city’s ability to require parkland on site — one of their most powerful city-building tools.

There would also be a requirement under the new legislation that 60 per cent of whatever is in the community benefits fund must be spent or allocated in each calendar year, which has the potential to stymie larger, more expensive projects that take years to pull the funds together far and have bigger positive impact on communities, councillors say.

“What I would say I’m confident of, is the that the city will overall be shortchanged,” said Councillor Kristyn Wong-Tam (Ward 13 Toronto Centre). “The way we collect dollars today in the various streams of collection . . . all of that will be weakened.”

Wong-Tam helped negotiate a 0.6-hectare park at the site of the 11 Wellesley St. W. development in her ward, between Bay and Yonge Sts., by pooling parkland dedications from several sites. That kind of project, she said, will likely be impossible under the proposed system.

She said the total amount collected from developers will also likely be reduced, what she called a form of downloading by the province, which recently levelled budget cuts totalling more than $177 million in 2019 alone, according to city officials.

“It will put additional budget pressure on the city,” she said.

Jake Tobin Garrett, policy and planning manager for the Toronto-based non-profit Park People said the city should not be forced to choose between the new charge and the parkland tool, which he called “critical” for growing municipalities.

“It allows you to actually get land in areas that are coming under some really intense development and in these areas land prices are often so high that just getting cash instead of land really hamstrings cities like Toronto or Richmond Hill or something from being able to actually be able to buy land in these areas,” he said.

He said it also worries him that cities may not be able to save up to buy larger pieces of parkland with the cash they collect from developers if the rules force them to spend a majority of that money each year.

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“My advice to the government would be to leave the land dedication in place,” he said.

To understand the potential impact of Bill 108 compared to the current system, it’s helpful to look closely at this and other examples the city holds up as achievements.

In 2013, it was reported that the 1.8-hectare site that was home to the beloved retail store Honest Ed’s — long known for its cheeky, hand-painted signage and bright lights on the corner of Bloor and Bathurst Sts. — had been sold to Vancouver-based developer Westbank Corp.

The developer proposed several buildings, the tallest being over 20 storeys, involving more than 800 units total, 100 per cent of which are to be purpose-built rental, as well as new retail and a public market.

Developing the site required what’s called a zoning bylaw change because it exceeded the existing rules for height and density, triggering section 37 talks. Parkland dedication under section 42 of the Planning Act was also at issue.

Ultimately, the city secured $4 million to create affordable rental units on site; that 40 per cent of units would be 2 and 3-bedroom units, what the city considers “family-sized”; a child care centre located on site; $1 million for a cultural centre for Black heritage; $500,000 in public art; a redesigned “Honest Ed’s Alley” running north-south through the property that will have pop-up businesses and other “micro-retail”; as well as $500,000 for streetscape improvements beyond the basic requirements for replaced sidewalks and greenery.

As part of section 42, the city also secured a 1,150-square-metre park on site, which Westbank’s initial proposal did not include, specifying that it should have frontage on Markham St.

A city spokesperson said the development charges for the site totalled approximately $16 million.

Councillor Joe Cressy (Ward 10 Spadina-Fort York), who took part in the negotiations with neighbouring councillor Mike Layton, called it “the best example of city-building in recent years.”

But the parkland dedication and the total amount of community benefits achieved either in cash or otherwise may not be possible under a new, capped system, Cressy noted.

“The city’s going to get less money, very clearly, for social infrastructure and parkland, so there will be fewer parks and less funds for affordable housing, child care spaces and others,” he said. “That is a direct negative impact and we know that. How we would then be able to manage growth and change in a bustling city . . . we don’t know the answers to that yet.”

Local residents groups, while not always satisfied, backed the project after much public discussion and agreement on the community benefits.

“There will be those who will disagree with the heights of two towers, but we urge them to balance that against the range of benefits that have been secured,” the leadership of the Harbord Village Residents’ Association wrote in a letter to council. “These past two years, leading to the final negotiation helped define not just our understanding of the project, but deepened our understanding of our communities. And that is city building at its best.”

So what would the Honest Ed’s site have allowed the city to secure under the newly-proposed system?

That all depends on the cap, which the province has yet to spell out. The legislation spells out that the cap will be based on a percentage of the land value as of the day before the day the building permit is issued.

According to public property records, it appears the initial land sale in 2013 cost the developer $69.25 million. Since the value of the land has likely increased since 2013, the starting point for this theoretical calculation is probably much higher.

But to get an idea of the effect of a cap, at the 2013 value, a cap of 5 per cent would limit the city to charging around $3.5 million — less than just the $4 million secured for affordable housing.

At 10 per cent, the charge would be around $6.9 million and at 20 per cent it would be around $13.9 million.

It’s also currently unclear how the new community benefits charge will relate to the area around the development or if it will be pooled into a citywide fund — a crucial unknown detail. While section 37 benefits went toward the local community, cash-in-lieu for parkland was split between local and citywide accounts. Development charges are used to fund citywide services.

Lintern called this blending “peaches, pears and apples.”

“They were intended as different tools,” he said.

If pooled into one fund, the new community benefits charge would likely trigger contentious fights both between downtown councillors and urban wards and their suburban neighbours over available dollars.

At city hall, the Ford brothers long reviled the existing community benefits rules, falsely calling section 37 a “slush fund” for downtown councillors looking to be re-elected.

“Buying votes!” former mayor Rob Ford once chirped at then councillor Adam Vaughan in a 2013 video of a council meeting posted by journalist Matt Elliott.

The Fords often argued those funds should be distributed among areas without much development, despite that not being how the current section 37 rules work.