One-size-fits-all parkland policies affect affordable housing

The extra costs and disincentives to development that result from the way GTA municipalities acquire parkland has been the subject of a number of my previous columns.

Under Ontario’s Planning Act, municipalities can require that each new development contribute land for a park, or pay a fee in lieu — known as “cash in lieu” — to be used to purchase parkland. Because of recent changes by the provincial government, the time is right for municipalities to address challenges with their parkland and cash-in-lieu policies, and harmonize policies across the GTA.

In many municipalities, cashin-lieu policies are significant drivers of added costs on residential development. A study conducted for BILD found that the median cash-in-lieu contribution for a 200-unit lowrise subdivision had increased from $1.7 million (or $8,486 per unit) in 2006 to $6 million ($29,600 per unit) in 2018. For highrise developments, cashin-lieu contributions were also significant, ranging upwards of $20,000 to $30,000 per unit, or more.

So cash-in-lieu policies add costs to both highrise and lowrise developments. Additionally, because these payments are based on land values, dense projects in urban centres close to transit attract even higher cash-in-lieu payments, undermining the objective of building housing that people can afford.

The same study found that municipalities across the GTA had amassed more that $1.1 billion in their parkland reserve funds. In other words, they had collected more money for parks than they had spent. This suggests that municipalities have maneuvering room to consider alternate approaches.

With housing affordability being top of mind across the GTA, and a significant priority for municipalities, now is an ideal opportunity for municipalities and the industry to re-examine the impacts of parkland contributions and cash-in-lieu policies to help achieve municipal and provincial planning objectives.

To facilitate this collaboration, BILD has produced a discussion document that it is sharing with municipalities across the GTA. The document provides policy suggestions, such as creating a comprehensive parks plan to help guide development long-term, considering different types of parkland and the role they play in the urban landscape, efficient land use, and collection and timing considerations.

The discussion document also suggests considering caps on fees to ensure that the collection of cash-in-lieu does not end up being a barrier to affordability in the greenfield, mixed-use and transit-oriented communities that the province and municipalities seek to develop.

Fostering an inclusive dialogue on parkland contributions and parkland cash-in-lieu policies will help to achieve greater levels of housing affordability and choice, introduce more predictability in the building of new communities, reduce variation across the GTA and recognize that a one-size-fits-all solution within a municipality may not be the best policy.