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Section 37 vs. inclusionary zoning: Which would you choose?

What is the best solution for affordable housing?

The city and province are at an odds yet again, with the City of Toronto rejecting the inclusionary housing proposal the province is pushing towards. Instead, the city wants to continue using Section 37 benefits, a part of the provincial planning act that allows cities to give developers permission to build outside of zoning laws in exchange for providing funding for a project that contributes to the community. In conjunction with Section 37, the city has been working on the Open Door policy that pairs up with voluntary developers who are willing to provide affordable housing in exchange for various incentives.

On the other hand, inclusionary zoning would mandate that any new development being built in cities across Ontario would have a certain portion built as low-to-mid-income housing. The province plans on giving the cities the power to mandate how to implement the inclusionary zoning policies in their respective regions. Though this is a complimentary policy for affordable housing, there is one small problem. The province has mandated that Section 37 cannot be used in conjunction with inclusionary zoning unless under specialized circumstances. They have not specified what the “special” circumstances would be either.

This policy is forcing Toronto to choose between providing essential community services and desperately needed affordable housing — and it appears politicians are at a loss on how to proceed. Quite honestly, both section 37 and inclusionary zoning have their pros and cons, but neither is sufficient to solve the plethora of housing and funding issues that plague Toronto.

Pros and cons of inclusionary zoning:

Inclusionary zoning has been a popular method of building affordable housing in many major US cities including Chicago, Montgomery County, Maryland and San Francisco. It speeds up the growth of affordable housing because it makes it mandatory for developments to build new units.  It also creates mixed-income neighbourhoods, which allows children of low-income areas to avoid being marginalized in poor areas. Many people are worried that inclusionary zoning would drive up prices of the other units, but a report by the U.S. Department of Housing and Urban Development has determined that affordable housing doesn’t affect pricing as much as assumed. Critics are concerned that the cost of inclusionary zoning falls on new homebuyers rather than all of the taxpayers in a city, which they believe isn’t fair. Inclusionary zoning can also only be applied to new developments.

Pros and cons of section 37:

Section 37 gives the local councillor and community the opportunity to choose how to use development funds to benefit a particular neighbourhood, which makes the funding flexible. It helps to create good neighbourhoods and give people access to parks, public art infrastructure, and community centres. These types of infrastructure are often ignored by the city in light of other projects that need funding, and shouldering private developers with the burden is a good solution. On the other hand, section 37 can be misused if the local councillor chooses a project that isn’t effective in the community. Though community funding is important, families, seniors, and low-income individuals need homes to live in, and this trumps public art installations.

What is a possible solution for the city and province? 

When the city rejected the inclusionary zoning proposal last week, they also said that if the zoning proposal were approved they would want a 10 per cent affordable housing mandate for the new developments going up, instead of just targeting inclusionary zoning at mid-to-low income households.

A potential solution is to have both options available for developers. By allowing them to choose between section 37 and inclusionary zoning, both community funding and affordable housing needs may be fulfilled. Most would choose section 37 as it stands, but if it were mandated that the community funding would have to equal the cost of building and maintaining 10 per cent affordable housing, it would even the playing field between the two policies. As well, Open Door could be maintained and continued alongside inclusionary zoning to the benefit of the  95,000 people on the affordable waitlist to obtain housing.

The state of affordable housing in Toronto is not of casual concern. It is a state of emergency. The staggering amount of people desperate for housing, and who are forced to resort to the streets or use most of their income to pay rent, is unacceptable. Instead of city and provincial councillors bickering over which policy is better, everyone need to bring all solutions to the table and create a viable plan to work together. After all, people’s lives depend on it.