Mark Visser, Senior Manager of Strategy & Investments, introduced the item as a replacement for the current deferral policy on development charges (DCs) for high-rise residential buildings. Mr. Visser explained that due to changes in the Planning Act (Bill 109) and the discontinuation of phased building permits, the previous deferral mechanism is no longer applicable as of January 1st. Mr. Visser advised that staff are open to engaging with BILD to refine the policy.
Kevin Ross, Manager of Development Finance & Payroll, provided a presentation on the proposed policy for deferring development charges for high-rise construction. The presentation outlined changes to the Planning Act under Bill 109, which expedited site plan approvals for high density development and now requires a single building permit for the entire structure. Mr. Ross outlined the recommended proposal on DC deferrals for high rise developments, financial considerations, and plans for a comprehensive review of the current DC (Development Charge) Deferral Policy. Mr. Ross advised that Staff will collaborate with BILD and development partners as part of the review, assess deferral programs and best practices from other municipalities and the region and a report back later this year on any proposed policy changes.
The Committee thanked staff for the presentation and provided the following comments and questions on the proposed policy:
- Requested confirmation on any perceived risks associated with deferring DCs, given that the physical structure already exists.
- Expressed that an interest-free deferral should not be an option and suggested that an interest rate lower than that of banks would be beneficial to developers facing cash flow challenges.
- Requested clarification on why the current DC deferral policy is tied to underground structures rather than a percentage of the building's completion.
- Asked for clarification on the timing of DC payments under Bill 109, given that the City can issue only one building permit.
- Expressed concerns about the economy and the need for all levels of government to implement economic stimulus measures, highlighting the importance of municipalities engaging provincial support to achieve municipal housing targets and advance affordable housing initiatives.
- Requested a comparison between the proposed DC deferral policy for high-rise residential developments and the City of Vaughan’s DC deferral policy, including the financial implications of Vaughan’s policy.
- Sought clarification on where the lost interest from deferred DCs is allocated, the impact of deferrals on total DC reserves, and whether the loss of revenue would be recoverable.
- Suggested including mid-rise buildings in the deferral policy to support the "missing middle" of housing and incentivize developers to build more of this type.
- Requested clarification on the current development charges policy for purpose-built rentals, affordable housing, and attainable housing, and expressed a preference for incentivizing purpose-built rental developments over condominiums to address housing affordability.
- Asked whether deferred DC rates would be adjusted based on market conditions.
- Suggested that DC deferrals should apply only to the approved 20-story height limit and not to any additional height increases.
- Expressed that DC deferrals should not be granted for development applications that have been appealed to the Ontario Land Tribunal.
- Recommended that the Policy Subcommittee convene to review deferral incentives and include stakeholder input.
- Asked why the 18-month deferral period was chosen instead of BILD’s recommended deferral length and whether it aligns with construction timelines.
- Suggested that built forms with underground components or longer construction timelines should qualify for deferrals and supported expanding eligibility to other developments, such as stacked townhomes.
- Questioned the level of Canadian content in condo, townhouse, and apartment construction and suggested that deferrals should be provided only to developments using Canadian materials.
- Expressed concerns that the motion may be premature and suggested deferring a decision until a comprehensive review of deferrals for all building types is conducted, with a report brought forward by the end of May or early June.
- Asked what financial protections are in place if a developer goes bankrupt and whether Letters of Credit or Surety Bonds would secure the City's funds.
Staff responded to the Committee's comments and questions, clarifying that the 18-month deferral period was chosen to align with the Region’s current approach. They noted that delaying the decision until June would leave no incentive in place for 2025, whereas the proposed deferral policy provides a temporary measure while allowing for a more comprehensive review. Staff confirmed that they will continue to assess the Region’s direction and consult with BILD, and that the interim policy offers some level of incentive as they await further regional developments. Once the Region finalizes its changes, staff will bring forward a report aligning with these updates.
Andy Taylor, Chief Administrative Officer, advised that he will follow up with the Mayor on the status of the Policy Subcommittee. He noted that under Strong Mayor Powers, the Mayor has authority over appointment of Councillors to various committees and stated that he will discuss the next steps for the Policy Subcommittee.
The Committee consented to add the following amendment to the motion:
"That Staff report back with a comprehensive report on the deferral of Development Charges across all building types be presented no later than the end of June."