Briefing Note - Bill 23: More Homes, Built Faster Act, 2022 (First Reading Version) And Related Housing Supply Measures

Written By Daniel Artenosi

October 27, 2022

Bill 23, An Act to amend various statutes, to revoke various regulations and to enact the Supporting Growth and Housing in York and Durham Regions Act, 2022 (“Bill 23”), was unveiled by the Ontario Government on October 25, 2022, at which time it received First Reading from the legislature.

Bill 23 amends several pieces of legislation, including important parts of the Planning Act, Development Charges Act, 1997, City of Toronto Act, 2006, Ontario Heritage Act, and the Ontario Land Tribunal Act with the intention, as expressed by the Government, of increasing housing supply to provide attainable housing options in the province of Ontario. The stated goal is 1.5 million new homes in the next 10 years.

The text of Bill 23 is available here.

The proposed legislative changes are far-reaching and address, among other things, permitted uses (as-of-right second and third units on residential lots; rental, affordable, attainable, and inclusionary zoning units; up-zoning within major transit station areas); municipal fees and charges (caps on parkland dedication rates, exemptions from community benefits charges, interest and increases on development charges); and the approvals process (third party appeal rights; the role of upper-tier municipalities; the role of conservation authorities; scheduling and costs awards at the Ontario Land Tribunal; listing and designation of heritage properties).

We will continue to review the draft legislation and share our insights into the potential impacts on land use planning and development for both ongoing applications and potential future acquisitions.

In the meantime, we set out below our initial review and summary of the numerous proposed changes to the current landscape.

Planning Act:

Under Bill 23 (First Reading):

Upper-Tier Municipalities

  • Planning responsibilities (e.g. approval of Official Plans and plans of subdivision) will be removed from the upper tier-municipalities of Simcoe, Durham, Halton, Niagara, Peel, Waterloo, and York. These upper-tier authorities may provide advice and assistance to lower-tier municipalities instead.

Secondary Suites

  • Second and third residential units on residential properties will be permitted as of right, and municipalities may not enact official plans or zoning by-laws to the contrary. No minimum unit sizes and no prohibitive parking requirements can be imposed by a municipality (however, the Minister retains regulation-making power for “requirements and standards” with respect to second and third units).

Zoning in MTSAs/PMTSAs

  • Municipalities will have one-year to up-zone lands within major transit station areas and protected major transit station areas to match minimum height and density permissions.

Elimination of Third Party Appeals

  • Third party appeal rights of planning instruments will be eliminated (Official Plans, Official Plan Amendments, Zoning By-law Amendments, Minor Variances, Consent), except by specified persons and public bodies. Note that third party appeal rights for Draft Plans of Subdivision were previously eliminated. These limitations on appeal rights will be subject to transitional rules.

  • Specified persons is defined to generally include certain utility and infrastructure companies.

  • Please note that existing third party appeals will be dismissed on the date Bill 23 comes into force unless a hearing date was scheduled by October 25, 2022 or an appeal was filed by the applicant, specified person, public body or the Minister.

  • There will no longer be a requirement for public meetings for Draft Plan of Subdivision applications.

Exemption from Community Benefits Charges

  • Community benefits charges will be discounted by the amount of floor area being used for affordable residential units, attainable residential units, and inclusionary zoning units.

Exemptions from Site Plan Control

  • Under both the Planning Act and the City of Toronto Act, 2006, site plan control powers will no longer extend to exterior design and landscape aesthetics.

  • Developments of up to 10 units will not be subject to site plan control.

Parkland Dedication – Exemption and Caps

  • Like community benefits charges, parkland dedication requirements will be discounted to net out affordable, attainable, and inclusionary zoning units. Likewise, parkland dedication will not apply to second and third units on a residential lot, or existing units.

  • Parkland dedication requirements will be determined (“frozen”) based on the by-law in effect as of the date of a site plan application (or zoning application where no site plan approval is required) and will remain applicable of a period of two years following approval.

  • The alternative parkland dedication rate will be lowered from 1 ha per 300 units to 1 ha per 600 units for land, and from the equivalent of 1 ha per 500 units to 1 ha per 1000 units for cash-in-lieu.

  • Additionally, the alternative parkland rate will be subject to a legislative cap of 10% of the land/value otherwise required to be conveyed for sites of less than 5 ha, and 15% of the land/value for sites of 5 ha or greater (these caps previously only applied to land within Transit Oriented Communities, per the last round of amendments to the Planning Act).

On-Site Parkland Appeals

  • There will be a legislative scheme for proposing on-site parkland through a development application to satisfy, in whole or in part, the parkland dedication requirement.

  • In the event of a dispute with respect to on-site parkland, a specific right of appeal to the Ontario Land Tribunal will be available.

Encumbered Land as Parkland

  • Land proposed for parkland dedication may include encumbered land or conveyances of less than the fee simple interest (e.g., POPS).

  • A regulation making power can set out prescribed criteria for proposed parkland.

  • Municipalities will be required to spend out 60% of money in their parkland account during each year. This is similar to the requirement to spend out 60% of money in the community benefits charges account from previous legislative reforms.

Development Charges Act, 1997:

Under Bill 23 (First Reading):

Development Charges Exemptions and Reductions

  • Second and third residential units on a property, non-profit housing units, affordable housing units, attainable housing units, and units required by inclusionary zoning will be exempt from development charges.

  • Non-exempt rental housing will have development charges reduced based on bedroom count (25% reduction for 3+-bedroom units; 20% for 2-bedroom units; 15% for other units).

Definition of Affordable Housing

  • This Act will contain the relevant definition of “affordable” housing for the purposes of the Planning Act as well as the Development Charges Act, 1997.  It will also contain the definition of “attainable” housing, though the details are largely left to regulation.

  • The definition of an affordable rental unit is fixed at not more than 80% of the average market rent.

  • The definition of an affordable ownership unit is fixed at not more than 80% of the average purchase price.

  • The average market rent and average purchase price will be identified in a Bulletin to be published by the Ministry.

  • The required affordability period will be set at a minimum of 25 years.

  • To be eligible for the proposed exemptions, there will be a requirement to enter into an agreement registered on title and enforceable against future owners to secure the affordability criteria.

Calculating Development Charges

  • Development charges will be determined based on the average 15-year level of service (as opposed to the current 10-year level of service).

  • Certain studies (including the background study) will no longer be eligible for inclusion in development charge calculations.

Mandatory Phase-In of Development Charges

  • Development charges by-laws may now remain valid for a period of 10 years (previously 5 years).

  • All development charges by-law enacted on or after June 1, 2022 will have the applicable charge clawed back/phased-in for the first four years of applicability: 80% for the first year; 85% for the second year; 90% for the third year; 95% for the fourth year; and only reaching 100% in the fifth year.

Limit on Interest on “Frozen” Development Charges

  • Development charges for non-exempt rental housing and institutional developments that are to be paid in annual installments will have interest on the installment payments capped by the legislation.

  • In circumstances where development charge rates have been “frozen” or “locked-in” at the time of application (e.g., site plan applications made after January 1, 2020), the legislation will limit the interest rate that can be charged to prime plus 1%.

  • There will be a 60% annual spend-out requirement for water, wastewater, and road infrastructure.

Ontario Heritage Act

Bill 23 (First Reading) will impose new constraints on the heritage listing and designation processes under the Ontario Heritage Act:

  • Properties must meet prescribed criteria in order to be listed on a municipality’s heritage register (pre-viously, a municipal council only had to “believe” the property to be of cultural heritage value or interest).

  • A property owner may object to the inclusion of its property on a heritage register. This right to object will now apply regardless of when the property was listed. A municipal council is required to consider such objection and either confirm or remove the property from the register.

  • Listed properties are to be removed from the register in the event of a repealed or unsuccessful designation process.

  • If a property is listed but designation does not occur within two years, the property will be removed from the register.

  • When a property is removed from the register, it may not be included again for a period of at least five years.

  • After a development application has commenced, a municipality will only be able to designate the property (within 90 days of the application) if the property had been previously listed on the heritage register.

  • The Minister may provide criteria for Heritage Conservation Districts including a process for amending or repealing Heritage Conservation Districts (this was not previously contemplated by the Act).

Ontario Land Tribunal Act

Bill 23 (First Reading) proposes changes to the Ontario Land Tribunal that are consistent with the goal of expediting certain matters related to housing and discouraging abuse of the appeal tribunal:

  • The OLT will have new dismissal powers on the basis of “undue delay” and “failure to comply with an order of the Tribunal”.

  • The OLT will have specific jurisdiction to consider costs awards against an unsuccessful party.

  • A regulation-making power may be used to require the OLT to prioritize certain classes of proceedings.

Rental Housing Replacement

Under Bill 23 (First Reading), proposed amendments to the City of Toronto Act, 2006 and the Municipal Act, 2001, will give the Minister the ability to limit the power of local municipalities to prohibit and regulate the demolition and replacement of existing rental housing. Currently, municipalities may set their own requirements, which are not subject to appeal, for rental housing replacement by by-law (to date, only Mississauga and Toronto have enacted such by-law regimes).

Inclusionary Zoning

Revisions to inclusionary zoning rules are not contained in Bill 23, but rather in a proposed amendment to Regulation O.Reg. 232/18. The ERO posting for the proposed amendment can be found here.

The ERO posting notes the following proposed changes:

  • A 5% upper limit on the number of units that can be required to be set aside as affordable (or 5% of the total gross floor area).

  • The maximum period of affordability is 25 years.

  • As in the proposed Development Charges Act amendments, the definition of “affordability” would be based on 80% of the average market rent for rental and 80% of the average resale purchase price for ownership.

The posting notes that municipalities that have already enacted inclusionary zoning frameworks will be required to update those frameworks.

Housing Targets

The province has assigned housing targets to the year 2031 for 29 municipalities. These allocations make up 1,229,000 of the proposed 1.5 million new homes targeted for the next ten years.

Municipalities will be required to prepare “pledges” identifying how they will achieve these housing allocations within the time frame.

Information is posted on the ERO and the specific housing targets by municipality can be found here.

Other Proposed Regulations

In addition to the draft legislation and the various postings referred to above, other proposed regulations, amendments, and legislation have also been released for comment on the ERO. For example:

Conservation Authorities and Other Legislation

Bill 23 (First Reading) proposes extensive changes to the role of Conservation Authorities in the province, including limitations on their function in the planning process and focussing their jurisdiction on natural hazards and flooding.

In addition to the changes to the Conservation Authorities Act, which are not considered in detail here, Bill 23 (First Reading) also proposes amendments to the New Home Construction Licensing Act, 2017, the Ontario Underground Infrastructure Notification System Act, 2012, and the York Region Wastewater Act, 2021.'

Bill 23 and the associated regulations and housing supply initiatives have been put forward by the Government in support of its aggressive plan to build 1.5 million new homes in Ontario in the next 10 years.

A number of changes related to municipal financing tools are intended to provide property owners and developers with greater cost certainty through the development process while incentivizing the production of more affordable forms of housing such as rental housing, affordable rental and ownership housing, secondary suites, and inclusionary zoning units.

The process-oriented amendments, such as the restrictions on site plan control powers, elimination of third party appeal rights, new powers given to the Ontario Land Tribunal, and curbs on the heritage listing and designation process, are intended to expedite the approval timeline and to shorten the time between the making of an application and the issuance of building permits.

The final form of Bill 23 will be subject to the legislative process. Revisions may be made through Second and Third Readings prior to enactment of the new legislation. We will continue to monitor and comment on such changes as they occur.

Please feel free to contact us directly to discuss Bill 23 and the associated changes in further detail:

October 27, 2022.

Disclaimer: This document is for information purposes only and does not constitute legal advice to any party. The contents of this document reflect our firm’s general review and observations concerning legislative and regulatory instruments, which are subject to change. Please seek professional legal advice on matters of direct concern to you.




Daniel Artenosi
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