By Ted McIntyre

By freezing development in its path, interim control bylaws can have unintended consequences

Dictionary.com describes the word Draconian as, “of, relating to, or characteristic of the Athenian statesman Draco, or his severe code of laws; rigorous; unusually severe or cruel.”

This is noteworthy because, although not exactly a word one typically encounters in common parlance, during the course of interviews for this feature, three separate, unconnected parties—one a home builder, one a lawyer and the other a politician—each used that very word to describe Ontario’s Interim Control Bylaw (ICBL).

Such is the attitude of many toward this municipal allowance contained within the Ontario Planning Act, particularly developers, who often view an ICBL as more of an ICBM (Inter-Continental Ballistic Missile) with respect to the potential disruption and fallout that can occur.

ICBLs freeze development projects“It is a powerful tool,” notes a prominent GTA builder, requesting anonymity and whose firm has been inordinately affected by the 2016 Richmond Hill interim control bylaw in a key development area at Yonge and Bernard streets. “It effectively strips all sites in that designated area of zoning, so no one can do anything, not even a renovation permit, unless the wording of that ICBL specifically allows it. As one of my professors once said, it can be a very Draconian measure in how sweeping and powerful it is.”

Municipalities have had the ability to pass interim control bylaws since the Planning Act came into force on August 1, 1983. Interim control bylaws put a temporary freeze on many land uses while the municipality is studying or reviewing its policies. No notice or hearing is required prior to its passing—the municipality need only direct that a study be undertaken with respect to land-use planning in the specified area.

The freeze can be imposed for only a year, with a maximum extension of another year. And there is no ability to appeal it when it is first passed, except by the Province itself. However, any extension to the bylaw may be appealed. The good news for developers is that once an ICBL ceases to be in effect, the municipal council may not pass a further ICBL on the same land for three years.

HOW LONG IS A YEAR?

The wording “can be imposed for a year” suggests that the bylaw was never meant to be an automatic 365-day term—that it could, in fact, be shorter if the necessary reviews and resulting decisions are made by a municipality in advance of that period. The fact, however, that it has historically run the full term suggests that municipalities customarily prefer to hold off development for as long as possible.

Similarly, the allotment for a one-year extension to an ICBL does not mean that the maximum term of a development freeze is two years. In fact, the Planning Act provides that an ICBL remain in effect beyond the two-year period if the new zoning bylaw that replaces it is appealed to the Local Planning Appeal Tribunal.

“If (that occurs), the tribunal must decide whether to hear or dismiss the appeal without holding a hearing,” explains Praveen Senthinathan, Media Relations Spokesperson for the Ministry of Municipal Affairs and Housing. “If the tribunal holds a hearing it may dismiss the appeal, allow the appeal, repeal the bylaw, amend the bylaw or direct the municipality to amend the bylaw in accordance with the tribunal’s order.”

There is no more telling example of the potential complications of an ICBL than what has transpired at Richmond Hill’s Yonge & Bernard, where, although the initial bylaw was enacted on Nov. 28, 2016, shovels have yet to break ground for most developers.

“We did an official plan in 2010,” recalls Richmond Hill Ward 2 Councillor Tom Muench. “Six years later, we do an ICBL. We do a one-year study. Right after that, everybody—residents and property owners—challenged us on our plan. It goes to OMB. Now here we are in 2019 and we’re asking OMB/LPAT for an adjournment so we can study more. It’s a Draconian measure for municipalities to stop development. I tell you honestly, we have policy staff that just want to keep doing studies. It’s job security! ‘I can make $200,000 a year to do a study, with no accountability or performance. And when I’m done this study, I may do another one!’”

“They passed an ICBL because they had a key development area (KDA) where people wanted to build, but they weren’t sure how to deploy heights and densities,” explains the GTA builder. “They rushed through their ICBL and rushed the study. Because the study that was initiated through the ICBL process was appealed, the bylaw remains in effect until the resolution of those appeals. Right now we’re into year two. If they adjourn the (LPAT) hearing until next year, it will be three. If it takes another year to get a decision, it could be four. That’s where there’s a misconception about the operation of an ICBL.”

The Molinaro Group can sympathize. With marketing plans poised to commence for the final two towers of the builder’s five-tower Paradigm project adjacent to the Burlington GO Station, the builder has become part of the collateral damage of an interim control bylaw that includes Burlington’s downtown Urban Growth Centre and lands near the GO Station. Although five towers were always part of the project plan, site plans for towers 4 and 5—much of the infrastructure of which is already in place—had not been officially submitted when the ICBL was enacted on March 5, 2019. And while Paradigm would appear to be an ideal fit for the Province’s plan to intensify around major transit stations, as well as helping Burlington alleviate future density issues, the City is not handing out exemptions to the bylaw ruling, leaving the builder in limbo.

THE GAMECHANGER

Although the fear of overdevelopment was fundamental to her 2018 campaign, Burlington Mayor Marianne Meed Ward says one project in particular spurred the interim control bylaw decision.

“The Official Plan didn’t contemplate—because we didn’t have the decision until late last year—the impact of the OMB ruling in the Adi Development project at Martha and Lakeshore: 26 storeys, and the existing OP had been four to eight! That was a gamechanger, and that necessitated us saying, ‘Ok, hang on. What does that designation mean for that land use?’ We are going to start to see a canyon of towers on both sides of Lakeshore. So good luck seeing the lake. Good luck knowing that there’s a lake there.”ICBLs are draconian

Suzanne Mammel, CEO of the Hamilton-Halton Home Builders’ Association, counters that “the OMB decision was actually finalized and made public in February of 2018, and ample time was available to consider the results in the OP. November 2018 was when the city was advised that their application to appeal the decision of the OMB was denied.”

Further, shutting down development in the designated area of Burlington runs counter to the city’s mandate, says Mammel. “According to the Region of Halton’s approved growth strategy, the City of Burlington is expected to add 8,300 units between 2015-2031 to accommodate for growth,” Mammel noted on a blog post.

“This equates to a minimum of 519 units per year over this period. Since 2015, the City of Burlington has achieved an average of 421.5 units. At this rate, the City of Burlington will fall 1,556 units short.”

Mayor Meed Ward counters that Burlington’s population targets are 185,000 by 2031. “As of the 2016 census, we were at 183,000. So we have surpassed our population growth target. Those are the facts.”

Not exactly, says Mammel. “They also have to hit certain densities as required through the Ontario Places to Grow Act, which sets densities of 150 people plus jobs per hectare (pj/ha) for Major Transit Station Areas and 200 pj/ha for the City’s Urban Growth Centre. No one from the City has confirmed their ability to hit these targets.”

“There are many units that are approved, but not yet built that would not be captured in the unit counts,” Meed Ward says. “Some real-time examples include the Carriage Gate development, a 17-storey residential building, six-storey parking garage and six- to eight-storey medical centre—which was approved in 2009. They only started constructing that two years ago. There’s a 22-storey building over on Brock Ave., over 100 units, that was approved. The Bridgewater, which is currently being constructed—was actually approved in the 1990s and is only now being constructed.”

“The Mayor considers a unit approved when it receives OP/zoning, but that is not the case,” Mammel argues. “And one of these projects is awaiting a construction management plan to be approved by the Ward Councillor and staff before they are allowed to construct. The other has not received site plan approval, and is caught in the ICBL.”

While Meed Ward maintains that the city is playing catch-up on the required infrastructure to match the its population growth and that high-density housing must include amenities to create a more walkable environment, Mammel says what the City is missing is office space, “and that is the fault of neither the Planning Act, nor the public.”

Mammel, for her part, wonders how official an Official Plan can ever be, given that the scope being studied in the ICBL was to have been included in the OP process completed last year.

“It raises massive concerns about the lack of transparency and the potential for other agendas,” Mammel says. “We have always tried to work with the City on all of their initiatives that impact city building, and providing affordable housing options for our growing population. However, it seems that yet again the City has chosen to move forward without even officially notifying us regarding something so impactful to new-home buyers, businesses and developers who drive economic growth.”

Mammel notes the Mayor said she would formally respond to HHHBA’s concerns, although none has been received since the ICBL’s passing.

Interim control bylaws delay development plans in OntarioThe City also reports “that a minimum of another $100,000 will be spent to re-study the same scope,” Mammel highlights.

Meed Ward does not see Burlington’s freeze as having a major impact on developers. “The applications that are on the books right now—all of them require some revisions, and they’re going through revisions. So the applicants still have some work to do on their end. And they can do that work while we’re doing our work. They’re not shovel-ready.”

Mammel, however, counters that “the City is not allowing any of the projects to become shovel-ready, as they refuse to consider a staff report until such time as the ICBL issues are resolved. Very little work will be done for the duration of the ICBL as a result.”

Further, wouldn’t continuing to go down that road be poor business practice for builders if they’re not sure they will ever be approved? “They’ve never had guarantees of approval,” Meed Ward says. “Whenever you’re asking to significantly deviate from an existing official planning and zoning bylaw—which is what we’ve seen for years—that is a speculative exercise, and that’s what’s been going on in the downtown. It’s been a bit like the wild west.”

“The City hasn’t had a new OP for decades, though,” says Mammel. “This is why there are so many deviations.”

Richmond Hill Ward 2 Councillor Muench takes issue with those who suggest developers are only marginally inconvenienced by interim control bylaws. “The argument from someone who’s not involved in investment to say, ‘We can delay your investment because it’s not going to cost you anything’—shame! Because labour rates are not going to decrease in a year. I don’t think DCs are going to be reduced. I don’t think the cost of capital will be cheaper. So housing affordability will not be improved.”

“We had a site that was pretty much ready to go—it would just have needed a few small variances. We should have been able to start building within nine months,” says the Richmond Hill builder.

“We paid a lot for the land—prices had escalated because of the Greenbelt and other factors. We thought we could turn it over quickly. But substantial delays ultimately drive up the costs of delivering housing. Interest costs go up. Scheduling becomes increasingly difficult. The cost of raw materials and labour tend to go up. Ultimately, these costs get passed on to future homebuyers and can have a substantial effect on eroding housing affordability.

“If we had turned it over in the 24 months we think it should have been, there would have been capital freed up to redeploy to other sites—possibly where the municipality already wanted (residential construction),” he adds. “Plus there would have been a large number of people working on the site who would have made money and reinvested it: the framers, carpenters, HVAC, the sewer water main guys, concrete, kitchen painters, landscapers, cleaners, marketers, real estate agents, etc.”

Couldn’t they have appealed the one-year extension? “Yes, but there are complications. First, your case needs to be really strong. And second, because LPAT has such a backlog, you might not get a hearing for a year anyway.”

A SURPRISE STOPPAGE IS NOTL

Chuck McShane, Executive Officer of the Niagara Home Builders’ Association, has also been frustrated by the process—or lack thereof.

“There was no mention of an interim control bylaw during the run-up to that election,” McShane notes of the Dec. 5, 2018 ICBL in Niagara-on-the-Lake. “Then it was passed 48 hours after the new mayor took office. So there had to have been discussions of it before she was elected. What they did talk about during the campaign was housing affordability. But an ICBL doesn’t go with that when you shut development down.”

“Discussion started in May 2018, during the election,” says Niagara-on-the-Lake Lord Mayor Betty Disero. “The biggest concern of residents was the speed of the development that was uncontrolled, or (that it was) being controlled by the development industry. The need to finalize a new official plan—get some controls in place so that we determine our destiny—was part of the mandate of every member of this new council.”

The Niagara-on-the-Lake interim control bylaw pertains to the Old Town tourist district. “We get 2.5 million to 3 million tourists every year coming to Niagara-on-the-Lake, and Old Town in particular,” says Disero. “Over the last five to eight years, there were developers coming in and putting in row housing and townhouses, and it was starting to take away the ambience. So we said, ‘Let’s stop, do a study, figure out what areas need to be protected and what type of housing we want built in those areas.’ We’ve had applications come forward everywhere else in Niagara-on-the-Lake and we’ve approved them.”

Last month the town imposed an infill bylaw “that will put some structure into what can be can approved in that area, and then we’ll release the ICBL,” Disero noted. “So instead of a year it will have been six months.”

Could the ICBL be extended beyond Old Town? “The infill bylaw will probably affect all of Niagara-on-the-Lake,” Disero says. “It talks about compatibility. But each village is different, so each one, even though it’s the same bylaw, will have different criteria for each area. “

I know there are a lot of developers who are upset,” Disero adds. “But seriously, we’re looking at a very small piece—one urban settlement among five in NOTL. There’s no question that home builders are an important part of our economy. But so is tourism. They are free to do in the other four settlements what the Official Plan and zoning bylaws allow.”

From a density standpoint, Disero echoes Burlington’s position: “We’ve already met, as a municipality, our 2031 targets with respect to housing. And we have a huge area of growth potential—up to 400 hectares in the Glendale area. We’re just now getting our numbers for 2041 and we’ll accommodate those.”Interim control bylaws slow new housing developments

NOT THE FIRST TIME

The Old Town ICBL is not Disero’s first. In March 1988, she brought forward a six-month freeze on new rooming houses for the city of Toronto. “It’s a tool that I’ve used a couple times,” she admits. “I was not anti-development in Toronto, though. In fact, many would say I was pro-development. But I respected neighbourhoods, as I do here.”

And how is the relationship with the Niagara Home Builders’ Association? “They came in and talked to us about our plans with respect to what’s next with the ICBL. We told them what we were doing and said we’d let them know when anything came forward.”

McShane disputes that the lines of communication have been completely open. “If the elected officials truly cared about housing affordability and the cost of living of their constituents, and spent more time consulting our industry instead of punishing the new-home purchaser by using a sledgehammer to drive a finishing nail, we could have a better chance of achieving housing affordability. That, in turn, will help create more affordable housing. Just because you have a certain tool in your tool box doesn’t mean it is the right one to do the job.”

If Disero’s six-month prediction seems dubious, Meed Ward’s one-year ICBL might also be pushed to the limit. For although it went into effect March 5, and that discussions had preceded it, as of June 12, no one had yet been hired to conduct the Burlington study. Politicians need to take a more parental outlook, suggests Muench. “Kids want chocolate for breakfast, lunch and dinner. But I want to give them a balanced diet,” he analogizes. “But the value in that won’t be understood for 20 years and I need to get elected. If I’m the province and I care about politics, do I really want to fight against residents who say, ‘Please don’t build here’?

“Here in Richmond Hill, the developers are saying, ‘We can show evidence that we can meet a 30-storey angular plane.’ So I say, ‘If you can do that, then we should move our height limit to the 30-storey realm. Because Markham has already approved a 37-storey in a non-key development area on a major corridor.

“People freak out about height,” Muench says. “I’m just worried about good planning and proper infrastructure and walkable communities.”

BUYER BEWARE

But the onus is also on builders to be increasingly aware of the political landscape, cautions Roslyn Houser, a partner with Goodmans LLP in Toronto. “The problem for developers is that it’s hard to rely on what they see in zoning bylaws. They may think they’re buying a zoned piece of land, and the next day an ICBL is passed. So when I’m advising clients who are considering the purchase of land, I tell them, ‘If you have any sense that it’s a controversial area, or one where a municipality may want to conduct a review, tread carefully,’” says Houser, a municipal law specialist whose practice focuses on land development matters.

Development applications can show outdated zoning“This can be a problem whether or not an election is pending, because where there is a hot-button topic, something that gives the Council concern, there can be public pressure to enact an ICBL. I’ve seen it happen. Some ICBLs are upheld on appeal, some are not. But either way, it can be a long process until the matter is decided.

“If you ask municipalities, they would say that sometimes they learn through a development application that their existing zoning is outdated and in need of review and updating and, it’s not in the public interest for development to proceed before they’ve had a chance to properly study and review,” Houser says. “But I’ve never been thrilled about the ICBL, as it’s a very Draconian tool. The idea of not giving notice and changing the zoning can be very disruptive. And when people have made investments based on a certain planning regime and then suddenly those rights are suspended, it can have severe consequences for property owners.

“But the Province gave municipalities that power, so municipalities can’t be blamed for using it,” Houser says. “There have been challenges, though—a lot of the deliberations revolve around whether there’s been bad faith on the municipality’s part—some of these have been tested at the tribunal level (OMB and now LPAT) and a few have gone as far as the Ontario Court of Appeal. Municipalities that have improperly used the power have had their interim control bylaws overturned.

“The bigger issue is the provincial directive to intensify—especially around transit stations—and that typically requires an amended city official plan and zoning bylaw,” Houser adds. “The province is encouraging municipalities to plan appropriately for intensification. And now that the appeal rights have been restored in Bill 108, you’re going to see more challenges.”

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