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The Macchiusi Sales Team, Weiss Realty Ltd Brokerage (2021)
Until a recent ruling by the Ontario Court of Appeals, parkland dedication policies were developed through negotiations between municipalities and the development industry. In a move that will impact future decisions, the court has determined that municipalities have the sole discretion to establish the requirements for parkland.On January 29 the Ontario Court of Appeal unanimously upheld the decision of the divisional court, which had concluded that the Ontario Municipal Board does not have the authority to impose a lesser rate or cap on parkland dedication than is prescribed in s. 42 of the Planning Act.
In 2010 the Town of Richmond Hill adopted a new official plan with parkland policies that were appealed to the OMB. The 2014 OMB decision imposed a cap on parkland dedication of 25 per cent of the land area or cashin- lieu. Subsequently, the town appealed that decision to the Divisional Court which found the OMB does not have the jurisdiction to alter municipal parkland requirements. Several developers then challenged this ruling and appealed to the Ontario Court of Appeal.
Weirfoulds partner Barnet Kussner, who represents the Town of Richmond Hill, spoke with NRU about the implications of the court's decision. He says that this ruling clarifies the ground rules for establishing parkland dedication policies and is important for a number of ongoing official plan appeals in surrounding municipalities such as Vaughan, Markham, Mississauga and Oakville.
"Our position was that the legislation says 1 hectare for 300 units and that is specifically set by the legislature. There was never anything in Section 42 that was intended to give the authority to the OMB when it approves the official plan policies governing the use of that rate to impose a lesser rate.
"There's also other important policies that have to be considered [which] include the need for parkland and public recreation facilities. The argument we were advancing was the intent of the legislature when reading Section 42 of the Planning Act as a whole was to leave that balancing act to municipal council. Leave it to decide where the rate should be set as long as it is no more than the 1 hectare per 300 units that legislature fixed as upper limit in Section 42.3."
Kagan Shastri LLP partner Ira Kagan, who represents appellants Elginbay Kagan says that cash-in-lieu value is added to the cost for the purchasers, not developers. So a cap on parkland fixes the amount that the purchaser would ultimately have to pay. Without a cap, there are concerns regarding affordability because it essentially encourages developers to build fewer, larger units. He says this is why the OMB eventually imposed a percentage cap.
"What the board understood in the hearing is that as density increases and you build more apartment units on that site, the cash-in-lieu per unit goes up. That's very different than cash-in-lieu of building goes up. ... The OMB realized correctly that you can't allow a municipality to charge the maximum rate without there being a cap. ... Until recently Richmond Hill had a 25 per cent cap in its official plan and by-law for 18 years. When the new official plan was put in, Richmond Hill realized [it] didn't want to have a percentage cap, [it] wanted the flexibility to charge anything up to the maximum, through their parkland dedication by-law. ... When [Richmond Hill] took [the cap] away, [its] by-laws could go up to 100 per cent, but [it] asked for about 80 per cent.
"If the math is structured so that it encourages large units and discourages small units then the OMB said that's discouraging affordable housing and intensification. That's where the board said [it's] not going to approve a policy in the official plan that allows you to take the maximum."
This is the first time the court has clearly established that a municipal council is the only entity which is allowed to impose a cap on parkland. Formerly, neither the municipality nor developer knew who would be successful at the OMB on an official plan appeal over parkland dedication policies.
Kussner says that the court's decision is consistent with the provincial direction with respect to OMB reform and expanding the role of municipal councils in the decision making process.
"In both instances-Bill 139 amendments and this decisionâ€”[they] recognize that municipal councils are an important and responsible level of decision-making in the planning process. There is a recognition that there's a great deal of responsibility that comes along with that in terms of the level of review that is required before important planning decisions are made, whether it's in the context of an OP or even a specific development approval. In both cases there's an acknowledgment that municipal councils have an important role to play and should be accorded a higher degree of independence in making those decisions."
However, Kagan says the matter will now return to the OMB where it will have to make a new decision on Richmond Hill's parkland policies. He says that the only options for the OMB are to approve the policies as they are, strike them completely, or write non-binding guidance policies. "The development industry [doesn't want another guidance policy it] wants to have a number."
Corporation and Zamani Homes (Richmond Hill), disagrees. He told NRU provincial policy objectives, especially regarding affordable housing and intensification, necessitate a cap on the rate that's prescribed in Section 42.3 of the Planning Act.
The Macchiusi Sales Team - Weiss Realty Ltd. Real Estate Brokerage (2021)