HomeMy WebLinkAboutDSD-2024-111 - Supplemental Report to DSD-2024-029 Inclusionary ZoningStaff Report
Development Services Department www.kitchener.ca
REPORT TO: Special Council
DATE OF MEETING: March 18, 2024
SUBMITTED BY: Rosa Bustamante, Director of Planning and Housing Policy, 519-
741-2200 ext. 7319
PREPARED BY: Tim Donegani, Senior Planner, 519-741-2200 ext. 7067
WARD(S) INVOLVED: Ward(s) 3, 9, 10
DATE OF REPORT: March 8, 2024
REPORT NO.: DSD -2024-111
SUBJECT: Supplemental Report to DSD -2024-029 Inclusionary Zoning
RECOMMENDATION:
That the City -initiated Official Plan Amendment OPA23/015/K/TD for the purposes of
introducing Inclusionary Zoning within Protected Major Transit Station Areas be
adopted, in the form shown in the Revised Official Plan Amendment attached to
Report DSD -2024-111 as Attachment `A' and accordingly forwarded to the Region of
Waterloo for approval; and,
That the City -initiated Zoning By-law Amendment ZBA23/027/K/TD to amend Zoning
By-law 2019-051 and Zoning By-law 85-1, be approved in the form shown in the
"Revised Proposed By-law Amendment" attached to Report DSD -2024-111 as
Attachment `B' and Attachment `C' respectively; and,
That staff be directed to enter into a memorandum of understanding with the Region
of Waterloo outlining roles and responsibilities in administration of Inclusionary
Zoning, to the satisfaction of the Director of Planning and Housing Policy; and,
That staff be directed to monitor local market conditions and engage with community
and industry, and report back to Council no later than the end of 2024, 2026, 2028 and
2030, with recommendations on whether inclusionary zoning requirements should
continue to be advanced in the timeframe, with the Market Area categorizations, and
in manner outlined in this report; and further,
That pursuant to Section 35(17) of the Planning Act, R.S.O. C P.13, as amended further
notice is not required to be given in respect of the Zoning By-law Amendment.
*** This information is available in accessible formats upon request. ***
Please call 519-741-2345 or TTY 1-866-969-9994 for assistance.
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REPORT HIGHLIGHTS:
• The purpose of this report is to describe additional dialog between staff and those who
provided oral and written submissions at the statutory public meeting on January 29,
2024, as directed by Council.
• The key finding of this report is that minor refinements to the proposed Official Plan and
zoning, alongside an enhanced monitoring approach, are recommended by staff in
response to these conversations.
• There are no financial implications arising from this report
• This report supports Building a Connected City Together: Focuses on neighbourhoods;
housing and ensuring secure, affordable homes; getting around easily, sustainably and
safely to the places and spaces that matter.
BACKGROUND:
On January 29, 2024, Council deferred the approval of Official Plan and Zoning By-law
amendments to introduce inclusionary zoning via the following motion:
"That the following motion be deferred to the March 18, 2024 Special Council
Meeting to allow staff to dialogue further with those who provided oral and written
submissions in relation to Inclusionary Zoning — Official Plan Amendment and Zoning
By-law Amendment, DSD -2024-029 and how it relates to Growing Together -
Protected Major Transit Station Area Land Use and Zoning Framework, as outlined
in Development Services Department report DSD-2024-005.-
That
SD-2024-005:
That the City -initiated Official Plan Amendment OPA23/0151KITD
for the purposes of introducing Inclusionary Zoning within Protected
Major Transit Station Areas be adopted, in the form shown in the
Official Plan Amendment attached to Report DSD -2024-029 as
Attachment `A' and accordingly forwarded to the Region of Waterloo
for approval; and,
That the City -initiated Zoning By-law Amendment ZBA23/0271KITD
to amend Zoning By-law 2019-051 and Zoning By-law 85-1, be
approved in the form shown in the "Proposed By-law Amendment"
attached to Report DSD -2024-029 as Attachment `B' and
Attachment `C' respectively; and further,
That staff be directed to enter into a memorandum of understanding
with the Region of Waterloo outlining roles and responsibilities in
administration of Inclusionary Zoning, to the satisfaction of the
Director of Planning and Housing Policy. "
REPORT:
In addition to community engagement, and the sharing of information on Engage Kitchener,
staff have hosted at least sixteen in person and virtual meetings with members of the
development industry including the Waterloo Region Homebuilders Association (WRHBA)
and Build Urban since the inclusionary zoning (IZ) project started in 2020. Those
conversations were fruitful and are key drivers of important policy and program details
including relatively low initial set aside rates that increase slowly over time, moderate
affordability focus, a permissive and flexible approach to offsite units, and other
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implementation details that work for their business models. The Build Urban membership is
responsible for the majority of the residential development in Protected Major Transit Station
Areas (PMTSAs) that will be subject to IZ. It is crucial to not only consult with those that may
be the potential tenants, or those that work and advocate on their behalf, of IZ units but it is
also crucial to consult with those who will be responsible for building the IZ units affected by
this policy.
Staff from the cities of Kitchener, Waterloo, Cambridge and the Region of Waterloo met with
representatives from the Waterloo Region Homebuilders Association on February 22 and
with Build Urban on February 29. All of the development industry representatives that
delegated on January 29th were invited to these meetings, and all but one attended. While
disagreeing with IZ in principle, some in attendance also recognized the need to provide
affordable housing close to ION transit stops. The discussions were constructive and
focused on detailed policy and implementation solutions that could both deliver affordable
units and market housing in PMTSAs.
What we heard:
Staff spoke with the one community delegate on March 5, to provide clarity on the project,
its relationship to the Housing Accelerator Fund, and the land value capture mechanism.
The delegate continues to prefer other more fundamental changes to planning frameworks
and processes, that in their opinion, would be more impactful to housing affordability than
IZ.
The development industry should not bear the burden of solving the community's
housing crisis.
Many in the development community questioned why they should bear the burden of needed
affordable housing investments. The housing crisis demands an all -of -society response. IZ
is one tool among many that are needed from all orders of government, the private and non-
profit sectors to address this critical issue. The 2024 Regional housing budget is $123 million
and represents a significant government investment in affordable housing. The City's $42
million Housing Accelerator Funding, as well as all the initiatives outlined in Housing for All,
will also shape the future of affordable housing in Kitchener. In addition to these public
investments in housing, IZ provides an opportunity to deliver a modest but meaningful
number of affordable units alongside market rate units in PMTSAs. IZ units are exempt from
DCs, CBCs and parkland dedication. These offsets, along with increased development
permissions and the elimination of parking requirements, are all expected to have positive
impacts on development pro formas. City and Regional Staff continue to explore other
opportunities to allow for the creation of affordable housing faster and easier.
Reduced Rents for IZ Units will be passed on to market tenants and purchasers
The Assessment Report prepared by land economists at NBLC and peer reviewed by Urban
Metrics agreed that IZworks by putting downward pressure on land values. In this way some
of the windfall land value arising from our ION transit system, public investment in PMTSAs
and Growing Together can be captured and directed towards a public benefit of affordable
units. Many in the development community do not agree that a meaningful decrease of land
values would result from an IZ program, and instead it will result in higher market unit prices
and rents and/or reduced supply. As in all markets, the price of development land is affected
by both supply (from land owners) and demand (from developers). Developers have a
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responsibility to be part of the solution by avoiding speculation and incorporating realistic
revenue expectations into their land purchase decisions. In staff's opinion, land value and
market housing will both bear some of the burden of IZ in the short and medium term. Staff
have worked to offset the impact to development pro formas and market housing through:
• DC, CBC and Parkland dedication exemptions for each IZ unit that represents
approximately $33,000; and
• A Growing Together planning framework that:
o increases permitted height and eliminates maximum densities relying on a
new and flexible approach of built form regulations;
o reduces time, risk, application fees and consultant costs by allowing more
projects to proceed directly to a site plan control process; and
o eliminates expensive parking requirements in PMTSAs.
Market conditions are currently very challenging, and it is the wrong time to
implement IZ
Staff heard that there are currently challenging economic conditions for the construction of
new housing and significant uncertainty in the short and medium term. We also heard that
a 2025 start to IZ may be too soon. Staff concur with developers' concerns that an overly
onerous IZ requirement introduced at a time of challenging market conditions could unduly
curtail new housing supply in PMTSAs, and that this is contrary to the City's objectives. In
response to the meetings with delegates, staff recommend a detailed, analytic and data
driven review of local housing and development market conditions together with community
and industry engagement, just prior to initiating the IZ requirements in 2025, and before
increasing set aside rates in 2027, 2029 and 2031. It will consider if any PMTSAs should
have their Market Area characterization adjusted (i.e. Prime, Established, Emerging).
Further this report will consider factors such as market rents, condominium sale prices,
presales and market unit absorption, financing costs, construction costs, building permits,
construction starts and lands sales. This monitoring and adjustment approach is included in
the recommended Official Plan Amendment.
Staff worked with Build Urban and can accommodate a policy revision to the Official Plan to
more clearly convey that the set aside rates need to be adjusted frequently in response to
up-to-date market conditions. Staff continue to place critical importance on communicating
the long-term intent of the policy so that the development community and landowners can
consider IZ as part of their purchase decision and to minimize impacts on market housing.
Staff's revised recommendation includes a set aside range for 2027 to 2030 in the Official
Plan (shown in Table 1 in this report). The set aside range would be evaluated biennially
and implemented through zoning by-law and, and where necessary, Official Plan
amendments approved by Council. Staff have also revised its recommendation to show only
the first set aside rate in the Zoning By-law with the intent that future set aside rates and
changes to any market areas would be implemented through the above-mentioned biennial
review/amendment process. This ensures that a statutory amendment process and Council
decision (informed by market data) is required prior to increasing the set aside rate.
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Table 1. Revised Set aside Rates or000sed in the Official Plan
Concern with Mill and Borden Market Area Characterization
Both Build Urban and WRHBA expressed concerns that the Mill and Borden PMTSAs are
characterized as Established Market Areas, rather than Emerging as was indicated in the
June 2023 discussion paper (see Attachment D regarding the policy evolution from June
2023 to March 2024). They requested that these PMTSAs be returned to the Emerging
classification or indicated as "to be determined" until the late 2024 review.
The Market Area characterizations in the June 2023 Discussion Paper were made on the
advice of NBLC land economist's memo dated September 2022. That memo categorized
each of the Region's PMTSAs as Prime, Established, or Emerging. This categorization
was driven by market parameters driving the viability of market housing development
including:
• achievable condominium unit and parking spot sales prices;
• the pace and volume of new high density apartment sales activity;
• per square foot rents;
• units sizes and suite mix;
• the pricing and volume of residential land acquisition activity; and
• the scale and volume of new high density residential development application
activity.
In response to comments received on the June 2023 Directions Report, NBLC was asked
to review and confirm or update the Market Areas with current market information. NBLC
considered the same market parameters as the previous evaluation. They also considered
some additional indicators, where relevant, to characterize the market areas. Market
factors that impacted their recommended changes to certain market areas included
relatively strong sales activities (Northfield PMTSA), persistent development proposal
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Minimum Percentage of Gross Leasable
Residential Floor Area to be provided as
Protected Major
affordable dwelling units by date of building
Market Area
Transit Station Area
permit issuance
2025-
2027-2028
2029-
2031+
2026
2030+
Prime
• Central
• Victoria Park and
Kitchener City Hall
2%
2-3%
2-4%
5%
• Queen and
Frederick
Established
• Grand River
Hospital
• Kitchener Market
1%
1-2%
1-3%
5%
• Borden
• Mill
Emerging
• Block Line
• Fairway
0%
0-1%
0-2%
5%
• Sportsworld
Concern with Mill and Borden Market Area Characterization
Both Build Urban and WRHBA expressed concerns that the Mill and Borden PMTSAs are
characterized as Established Market Areas, rather than Emerging as was indicated in the
June 2023 discussion paper (see Attachment D regarding the policy evolution from June
2023 to March 2024). They requested that these PMTSAs be returned to the Emerging
classification or indicated as "to be determined" until the late 2024 review.
The Market Area characterizations in the June 2023 Discussion Paper were made on the
advice of NBLC land economist's memo dated September 2022. That memo categorized
each of the Region's PMTSAs as Prime, Established, or Emerging. This categorization
was driven by market parameters driving the viability of market housing development
including:
• achievable condominium unit and parking spot sales prices;
• the pace and volume of new high density apartment sales activity;
• per square foot rents;
• units sizes and suite mix;
• the pricing and volume of residential land acquisition activity; and
• the scale and volume of new high density residential development application
activity.
In response to comments received on the June 2023 Directions Report, NBLC was asked
to review and confirm or update the Market Areas with current market information. NBLC
considered the same market parameters as the previous evaluation. They also considered
some additional indicators, where relevant, to characterize the market areas. Market
factors that impacted their recommended changes to certain market areas included
relatively strong sales activities (Northfield PMTSA), persistent development proposal
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activity and strong market position (Uptown Waterloo PMTSAs), and notable recent land
transactions and development application activity (Borden and Mill PMTSAs).
Build Urban has expressed concern with the Borden and Mill categorization "on the face of
it," but have not provided any market data to support their recommendation. NBLC did not
have capacity to update their market review between January 29 and March 18. Without
additional rationale, staff are unable to recommend reclassifying these stations at this time.
As Station Area markets evolve and mature, their Market Area characterization is expected
to change. Confirming market areas characterizations is in scope for the biennial reviews
including the late 2024 market review prior to the IZ by-law requirements coming into force.
Build Urban, the WRHBA, other industry representatives, and the community will be
engaged in these biennial reviews.
How will this all be implemented?
Attendees of both the Build Urban and WRHBA meetings had questions and concerns about
the implementation details and mechanics of the IZ program. Staff highlighted aspects of
the draft IZ implementation guidelines and committed to ongoing dialogue with the industry
to refine and improve the implementation details in response to shared learning. Staff also
see a role in facilitating offsite unit agreements and partnerships between market rate
developers and among developers and the not-for-profit sector.
Can we ensure that units continue to be occupied by eligible low-income
households?
At the statutory public meeting on January 29 questions were raised about the
implementation of qualified households in IZ units. Once a household is qualified through
the initial occupancy of an IZ unit, the tenancies of IZ units are regulated under the
Residential Tenancies Act. In this case IZ units would be reoccupied by another eligible
household. There is no legal mechanism to evict tenants due to an increase in income.
Some tenants will move out of IZ units for a wide variety of reasons including to seek units
more suited to their needs and situation, or homeownership. This is similar to tenancies in
Community Housing that are governed by the Housing Services Act where tenant `turnover'
cannot be compelled due to an increase in income (however tenants can be required to
move into a smaller unit if household composition changes). Nevertheless, both community
housing and IZ units continue to be valuable for the tenants that live in them and the housing
system overall.
Conclusion
2023 was characterized by extremely challenging conditions for developing housing.
Nevertheless, last year Kitchener issued building permits for 3,985 units and saw 2,777
housing starts, the highest and third highest rates respectively in Kitchener's history. Every
strong building permit year that passes without an IZ by-law in force is a missed opportunity
to secure affordable housing for those who could not otherwise afford a place to live. The
Staff recommended IZ policy and by-law, together with policies and Council direction to
frequently monitor and adjust the requirements as market conditions evolve, in consultation
with the community and development industry will allow not only Kitchener, but the Region
of Waterloo as a whole, to show leadership and a commitment to using the tools within our
jurisdiction. City staff will work with the development industry to deliver much needed
affordable housing. This provides the development industry and landowners with a level of
certainty regarding IZ that they can build into their pro formas and land purchase decision,
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while still being responsive to market challenges. The recommended policy supports the
development of critically needed market and affordable housing in PMTSAs
STRATEGIC PLAN ALIGNMENT:
This report supports Building a Connected City Together: Focuses on
neighbourhoods; housing and ensuring secure, affordable homes; getting around
easily, sustainably and safely to the places and spaces that matter.
FINANCIAL IMPLICATIONS:
None.
COMMUNITY ENGAGEMENT:
INFORM —This report has been posted to the City's website with the agenda in advance of
the Council / Committee meeting.
CONSULT — Staff from the cities of Kitchener, Waterloo, Cambridge, and the Region of
Waterloo met with representatives from the Waterloo Region Homebuilders Association on
February 22 and with Build Urban on February 29. All of the development industry
representatives that delegated on January 29th were invited to these meetings, and all but
one attended.
PREVIOUS REPORTS/AUTHORITIES:
• DSD -20-006 Affordable Housing Strategy Phase 2: Housing Needs Assessment
• DSD -20-150 Inclusionary Zoning for Affordable Housing: Background and Fiscal
Impact Analysis
• DSD -2022-281 Growth Related Funding Tools — Cumulative Impact Assessment
• DSD -2022-501 Bill 23 More Homes Built Faster Act — Kitchener Comments
• DSD -2023-071 Inclusionary Zoning for Affordable Housing: Status Update
• DSD -2023-258 Inclusionary Zoning — Policy and Implementation Directions
• DSD -2024-029 Official Plan Amendment OPA23/015/K/TD and Zoning Bylaw
Amendment ZBA23/027/K/TD — Inclusionary Zoning
• Provincial Policy Statement, 2020
• A Place to Grow: Growth plan for the Greater Golden Horseshoe, 2020
• Regional Official Plan
• Planning Act
• Residential Tenancies Act
• Housing Services Act
REVIEWED BY: Natalie Goss, Manager, Policy and Research
APPROVED BY: Justin Readman, General Manager of Development Services
ATTACHMENTS:
Attachment A —
Revised by-law to amend the Official Plan
Attachment B —
Revised proposed by-law to amend Zoning By-law 2019-51
Attachment C
— Revised proposed by-law to amend Zoning By-law 85-1
Attachment D
— Summary of policy evolution June 2023 -March 2024
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AMENDMENT NO. x TO THE OFFICIAL PLAN
OF THE CITY OF KITCHENER
CITY OF KITCHENER
Page 554 of 592
AMENDMENT NO. X TO THE OFFICIAL PLAN
OF THE CITY OF KITCHENER
CITY OF KITCHENER
INDEX
SECTION 1 TITLE AND COMPONENTS
SECTION 2 PURPOSE OF THE AMENDMENT
SECTION 3 BASIS OF THE AMENDMENT
SECTION 4 THE AMENDMENT
APPENDICES
APPENDIX 1 Notice of the Meeting of Planning and Strategic Initiatives
Committee of January 29, 2024
APPENDIX 2 Minutes of the Meeting of Planning and Strategic Initiatives
Committee — January 29, 2024
APPENDIX 3 Minutes of the Meeting of City Council — March 18, 2024
2
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AMENDMENT NO. x TO THE OFFICIAL PLAN OF THE CITY OF KITCHENER
SECTION 1 —TITLE AND COMPONENTS
This amendment shall be referred to as Amendment No. x to the Official Plan of the City of Kitchener.
This amendment is comprised of Sections 1 to 4 inclusive.
SECTION 2 — PURPOSE OF THE AMENDMENT
The purpose of this Amendment is to introduce Inclusionary Zoning policies that will permit the
City to require affordable housing units in new developments to be included as part of other
housing development within Protected Major Transit Station Areas ("PMTSAs").
The amendment:
• Introduces goals and objectives for the Inclusionary Zoning policy and a description of
measures and procedures used to attain these goals and objectives;
• Sets the minimum size of development to which Inclusionary Zoning policies apply as 50
units or more;
• Specifies that the policy initially applies to the Protected Major Transit Station Areas west
of the Conestoga Expressway;
• Establishes a requirement in each Protected Major Transit Station Area that up to 5% of
the gross leasable residential floor area be set aside as affordable housing, with the set
aside requirements phased in over multiple years;
• Specifies that affordable units are to be rented by low and moderate income renter
households
• Authorizes all housing types and sizes to be provided as affordable units, and requires
that they be similar in size and number of bedrooms to market units giving rise to the
Inclusionary Zoning requirement;
• Establishes a minimum period of affordability of 25 years;
• Outlines the measures and incentives to support these policies;
• Outlines that the maximum rents for affordable units will be determined according to
Average Market Rent and median renter income in the regional market area;
• Amends the definition of affordable housing as it applies to the Inclusionary Zoning policies
to align with these criteria;
• Enables the provision of off-site affordable units, provided they are located within an
PMTSA in the City, and are occupied in a timely fashion; and
• Sets out the approach to monitoring that ensures required affordable units remain
affordable for 25 years.
SECTION 3 — BASIS OF THE AMENDMENT
Section 16(4)-16(13) of the Planning Act provides that municipal official plans may contain policies
authorizing Inclusionary Zoning by requiring the inclusion of affordable housing units within
buildings containing other residential units. These sections along with Ontario Regulation 232/18
outline the required processes and prescribed content of Official Plan polices authorizing
Inclusionary Zoning. The requirements have been met in the preparation of this amendment.
The Regional Official Plan designates Protected Major Transit Station Areas and encourages
municipalities to implement Inclusionary Zoning.
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This Official Plan amendment has regard for matters of provincial interest, is consistent with and
conforms to the Provincial Policy Statement (2020), A Place to Grow: Growth Plan for the Greater
Golden Horseshoe (2019) as amended, and the Regional Official Plan (2009) as amended.
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SECTION 4—THE AMENDMENT
The City of Kitchener Official Plan is hereby amended as follows:
1. Section 4 is hereby amended by adding the following after Objective 4.1.6:
"4.1.7 To ensure that new affordable housing is provided alongside market housing within
Protected Major Transit Station Areas through Inclusionary Zoning."
2. Section 4.C.1 is amended by adding the following policies after policy 4.C.1.42 :
"Inclusionary Zoning
4.C.1.43 Inclusionary Zoning is a tool that allows the City to require affordable
housing to be provided in new developments within Protected Major Transit Station
Areas. Policies for Inclusionary Zoning are intended to support the development of mixed -
income communities and equitable access to higher order transit by increasing the supply
of affordable housing for low and moderate income households within these areas.
(a) Inclusionary Zoning will be implemented in conjunction with other planning tools
to increase the supply of affordable housing within Protected Major Transit Station
Areas that might not otherwise be built, contributing to diverse, mixed -income
communities that offer a range of housing options that are affordable for a range
of household incomes.
(b) Inclusionary Zoning policies will be informed by ongoing monitoring and
periodic assessment reports in accordance with Provincial requirements, or more
frequently as necessary, to create and increase the supply of affordable housing
without negatively impacting new market housing supply.
(c) The City will work collaboratively with the Region, private and non-profit
developers and housing providers, to leverage expertise to achieve affordable
housing objectives.
(d) Inclusionary zoning will be implemented through the Zoning By-law and guided
by Inclusionary Zoning Implementation Guidelines."
4.C.1.44 The City will enact a Zoning by-law for Inclusionary Zoning, pursuant to the
Planning Act and in accordance with the policies of this Plan, to require affordable
housing to be included in developments containing dwelling units located within a
Protected Major Transit Station Area as shown on Map 4.
4.C.1.45 Notwithstanding policy 4.C.1.44, Inclusionary Zoning will not apply to:
a) development containing fewer than 50 new dwelling units;
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b) the portions of a development containing residential care homes, retirement homes,
group homes, nursing homes or post -secondary student residences;
c) the development or redevelopment proposed by a non-profit housing provider or is
proposed by a partnership in which:
(i) a non-profit housing provider has an interest that is greater than 51 per cent,
and
(ii) a minimum of 51 per cent of the dwelling units are intended as affordable
housing, excluding any offsite dwelling units that would be located in the
development or redevelopment;
d) developments that are otherwise exempt under the Planning Act;
e) Lands located within the Block Line, Fairway or Sportsword Protected Major Transit
Station Areas until such time as a comprehensive city -initiated Official Plan Amendment
updating the planning framework for these areas has been completed.
4.C.1.46 Development subject to Inclusionary Zoning shall provide a minimum
percentage of new gross leasable residential floor area as affordable dwelling units in
accordance with Table 3.
Table 3: Inclusionary Zonina Set -Aside Requirements
6
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Minimum Percentage of Gross Leasable
Residential Floor Area to be provided as
Protected Major
affordable dwelling units by date of building
Market Area
Transit Station Area
permit issuance
2025-
2027-2028
2029-
2031+
2026
2030+
Prime
• Central
• Victoria Park and
Kitchener City Hall
2%
2-3%
2-4%
5%
• Queen and
Frederick
Established
• Grand River
Hospital
• Kitchener Market
1%
1-2%
1-3%
5%
• Borden
• Mill
Emerging
. Block Line
• Fairway
0%
0-1%
0-2%
5%
• Sportsworld
6
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4.C.1.47 Notwithstanding Policy 4.C.1.46, any lands within a Protected Major Transit
Station Area that were designated for employment or industrial purposes in accordance
with the Secondary Plan or Official Plan in effect on the day prior to the effective date of
Official Plan Number xx, must provide affordable dwelling units in accordance with the
Prime Market Area in Table 3.
4.C.1.48 Affordable dwelling units required under Policy 4.C.1.46 will be provided as
rental dwelling units.
4.C.1.49 The City, in consultation with the Region and the Cities of Waterloo and
Cambridge will establish maximum rents for the required affordable dwelling units on an
annual basis as described in definition of affordable housing/affordability in Schedule A.
4.C.1.50 Affordable dwelling units required under Policy 4.C.1.46 shall be:
(a) occupied by low or moderate income renter households as described in the definition
of affordable housing/affordability in Schedule A, with a maximum income at the time of
their initial tenancy of 3.5 times the dwelling unit's rent,-
(b)
ent,
(b) rented in accordance with policies of this plan for a period of at least 25 years from
the date of first residential occupancy of the affordable dwelling unit;
(c) similar to the market -rate portion of the development giving rise to the requirement for
affordable dwelling units in terms of dwelling unit mix and size, as appropriate, to achieve
a balanced mix of dwelling unit types and sizes and support the creation of affordable
units suitable for a range of household sizes; and
(d) first occupied prior to or coincident and proportional to the first occupancy of the
market dwelling units in the development giving rise to the affordable dwelling units.
4.C.1.51 The City, in consultation with the Region, will support developments in
meeting their Inclusionary Zoning requirements by exempting developments that contain
the required affordable dwelling units, on a prorated basis, from park dedication
requirements, development charges, and community benefit charges in accordance with
Provincial legislation.
4.C.1.52 Affordable dwelling units will be provided within the building giving rise to
the Inclusionary Zoning requirements, or offsite in a building located within a Protected
Major Transit Station Area as shown on Map 4, and on lands subject to the Inclusionary
Zoning provisions of the zoning by-law.
4.C.1.53 Further to Policy 4.C.1.50 d), the timing of first occupancy of offsite
affordable dwelling units will be prior to or coincident and proportional to the occupancy
of market units on the site giving rise to the requirement for the affordable dwelling units.
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4.C.1.54 The City, with support from the Region, will ensure ongoing affordable rents
of the dwelling units, and their occupancy by eligible households, by establishing and
maintaining a list of eligible tenants, outlining reporting requirements, and securing these
requirements through agreements as outlined in section 17.E.17.
4.C.1.55 The City shall prepare an assessment report a minimum of every 5 years,
in accordance with the Provincial requirements, for the purpose of determining whether
any Inclusionary Zoning policies in this Plan should be amended.
4.C.1.56 The City, together with the Region, shall monitor the impact of Inclusionary
Zoning on the affordable housing supply and will prepare and make publicly available a
report every two years in accordance with Provincial requirements. The report will contain
information including:
a) the number of affordable dwelling units,-
b)
nits,b) the types of affordable dwelling units;
c) the location of the affordable dwelling units;
d) the range of household incomes for which the affordable dwelling units were
provided;
e) the number of affordable dwelling units that were converted to units at market
value; and
f) the proceeds (if any) that were received by the municipality from the sale of
affordable dwelling units.
The City may initiate amendments to these policies is response to the findings of this
report in advance of the 5 -year assessment report update.
4.C.1.56 The City will preprare a report to Council before the end of 2024, 2026, 2028
and 2030, on local market conditions, including engagement with the development
industry, and provide a recommendation on whether the Minimum Percentage of Gross
Leasable Residential Floor Area to be provided as affordable dwelling units should be
imposed or increased in January the following year; and if any of the Protected Major
Trasnit Station Areas should be reclassified as a different Market Area in Table 3. This
report will analyse factors such as market rents, condominium sale prices, presales and
market unit absorption, financing costs, construction costs, building permits, construction
starts and lands sales.
3. Section 17.E.17 is deleted in its entirety and replaced as follows:
I7.E.17 Inclusionary Zoning Agreements
An owner of a development subject to an Inclusionary Zoning By-law will enter into one
or more agreements with the City, and if applicable, an offsite affordable dwelling unit
owner, to be registered on title, securing:
a) the requirements of Section 4.C.1.43-56
b) requirements for the timely delivery of the affordable dwelling units including
any phasing if applicable;
Page 561 of 592
c) the approach to determining maximum rent and permitted rent increases;
d) Adjustments to the maximum permitted rent in the event the purpose built rental
housing, is converted to condominium tenure,
e) requirements ensuring the occupants of affordable dwelling units have the
same building and amenity access as occupants of market units
f) requirements ensuring affordable dwelling units are provided to eligible
tenants;
g) requirements for ongoing administration, reporting and monitoring of the
affordable dwelling units over the affordability period;
h) conditions for offsite affordable dwelling unit delivery if applicable;
i) provisions that apply in the event of default of the agreement; and
j) other standards or arrangements as appropriate."
4. Schedule A is amended by adding the following definitions into the existing text in
alphabetical order:
-Non-profit housing provider means,
(a) a corporation to which the Not -for -Profit Corporations Act, 2010 applies that is in
good standing under that Act and whose primary objective is to provide housing,
(b) a corporation without share capital to which the Canada Business Corporations Act
applies, that is in good standing under that Act and whose primary objective is to
provide housing,
(c) a non-profit housing co-operative that is in good standing under the Co-operative
Corporations Act, or
(d) an organization that is a registered charity within the meaning of the Income Tax Act
(Canada) or a non-profit organization exempt from tax under paragraph 149 (1) (1) of
that Act, and whose land is owned by the organization, all or part of which is to be used
as affordable housing";
and
"Purpose Built Rental Housing means a multiple dwelling where individual dwelling
units are not units in a plan of condominium, and which is intended for use as rented
residential premises."
5. Schedule A is amended by adding the following text after the final paragraph of the
definition of Affordable Housing/Affordability:
"Notwithstanding the preceding, for the purposes of policies relating to Inclusionary
Zoning in section 4, affordable housing means:
c) for dwelling units within buildings that are not within purpose-built rental
housing, in accordance with subsection b); and
9
Page 562 of 592
d) for dwelling units within purpose-built rental housing, the greater of the value
calculated in accordance with subsection c); or 30% of median renter income for
the regional market area, as published from time to time by Canada Mortgage
and Housing Corporation."
6. Schedule B is amended by inserting the words "Inclusionary Zoning
Implementation Brief" between the words "Existing Conditions Plan" and
"Neighbourhood Design Report or Brief'
10
Page 563 of 592
APPENDIX 1 — Statutory Public Meeting Notice
Advertised in The Record — January 5, 2024
NOTICE OF PUBLIC MEETING �
proposing lndusionary Zoning requirements for
Aordabte housing within major transit station areas {:i
Tim Donegani, Senior Ptanner
tim.donegani,,4)kitchener.ca
519.741,2200 x7067
Have Your Voice Heard!
Planning & Strategic Initiatives Committee
Gate: January 29.2024
Location; Council Chambers,
Kitchener City Hall
200 King Street West
orVirtuat Zoom Meeting
Go to kitchener ca/meet i ngs
and select
Current agendas and reports
(posted 10 days before meeting)
Appear as a delegation
• Watch a meeting
To learn more visit-
www.engagewr.ca/
inclusionary -zoning
The City of Kitchener will consider city -initiated Official Plan an Zoning 6y -law
amendments that would require some affordable housing units tote included as part of
new buildings within Protected Major Transit Station Areas. These requirements are
called Inclusionary Zoning and would establish a minimum number of units that would
be required to be set aside to be rented to low and moderate income households at
affordable rents for the next 25 yearn
11
Page 564 of 592
APPENDIX 2 Minutes of the Meeting of Planning and Strategic Initiatives
Committee — October 22, 2019
12
Page 565 of 592
APPENDIX 3 Minutes of the Meeting of City Council — October 28, 2019
13
Page 566 of 592
14
Page 567 of 592
BY-LAW NUMBER XXX
OF THE
CORPORATION OF THE CITY OF KITCHENER
(Being a by-law to amend By-law 2019-051 known as the
Zoning By-law 2019 for the City of Kitchener — Inclusionary
Zoning
WHEREAS it is deemed expedient to amend By-law 2019-051;
NOW THEREFORE the Council of the Corporation of the City of Kitchener
enacts as following amendments to by-law 2019-051:
1. Section 4 is hereby amended by deleting section 4.3 in its entirely and replacing it as
follows:
"4.3 INCLUSIONARY ZONING
a) For the purposes of this Section 4.3,
Affordable Unit - means a dwelling unit where the maximum rent is in accordance with
subsections 4.3 e) and is occupied by an eligible tenant in accordance with subsection
4.3 d) of this By-law.
Complete Application - means an application that contains sufficient particulars and
information to allow it to be processed and approved. An application that is incomplete
becomes a complete application on the date that the required particulars and information
are provided to the City.
Development —means the construction, erection or placing of one or more buildings or
structures on land or the making of an addition or alteration to a building or structure that
has the effect of substantially increasing the size or usability thereof.
Eligible Tenant(s) - means a tenant is eligible to occupy affordable units in accordance
with subsection 4.3 f)
Gross Leasable Residential Floor Area - means the aggregate horizontal area of
dwelling units in a building measured from the exterior faces of the exterior walls of all
storeys of a building. For greater clarity, Gross Leasable Residential Floor Area does not
include common or parking areas or storage lockers.
Page 568 of 592
Non-profit housing provider -means
i) a corporation to which the Not -for -Profit Corporations Act, 2010 applies that is in
good standing under that Act and whose primary objective is to provide housing;
ii) a corporation without share capital to which the Canada Business Corporations
Act applies, that is in good standing under that Act and whose primary objective is
to provide housing;
iii) a non-profit housing co-operative that is in good standing under the Co-operative
Corporations Act; or
iv) an organization that is a registered charity within the meaning of the Income Tax
Act (Canada) or a non-profit organization exempt from tax under paragraph
149(1)(1) of that Act, and whose land is owned by the organization, all or part of
which is to be used as affordable housing.
Purpose -Built Rental Housing - means all or part of a multiple dwelling or mixed use
building where dwelling units are not a unit within a registered plan of condominium per
section 2 of the Condominium Act, and which is intended for use as rented residential
premises."
Regional Market Area —means the real estate market within the geographical boundary
of the Region of Waterloo.
b) The following regulations shall apply to the following Protected Major Transit Station
Areas identified on Appendix F to this By-law:
• Grand River Hospital;
• Central Station;
• Victoria Park/Kitchener City Hall;
• Queen/Frederick;
• Kitchener Market;
• Borden; and
• Mill.
C) Section 4.3 of this By-law does not apply to the following developments:
i) Existing buildings except where any addition or change in use would result
in 50 or more new dwelling units;
ii) Development that would add fewer than 50 dwelling units to a lot,-
iii)
ot,iii) Development where a non-profit housing provider has an interest that is
greater than 51 per cent;
iv) Development that, on or before the effective date of the zoning by-law
amendment bringing this section 4.3 Inclusionary Zoning provisions into
this By-law, is the subject of a complete application for:
a. a plan of subdivision under section 51 of the Planning Act;
Page 569 of 592
b. a description or an amendment to a description under section 9 of
the Condominium Act;
c. Building permit; and/or
d. Site plan control under section 41 of the Planning Act;
V) Development that is exempt in accordance with the Planning Act and
associated regulations;
vi) Large Residential Care Facility;
vii) Lodging House;
viii) Group Home
ix) Hospice;
X) A student residence owned and/or operated by a post -secondary school;
or
A) The portion of any development that has received a `shell' building permit
prior to January 1, 2025.
d) A percentage of gross leasable residential floor area shall be provided as affordable
units in accordance with Table 4-1.
Table 4-1: Inclusionary Zonina Set-aside Reauirements
e) The maximum rent that can be charged for affordable units will be determined
annually by the City, in consultation with the Region and according to the following
definition:
i) within buildings that are not purpose-built rental housing, the lesser of average
market rent for the regional market area according to the number of bedrooms; or
Page 570 of 592
Minimum Percentage of Gross Leasable
Market Area
Protected Major Transit
Residential Floor Area to be provided for
Station Area
affordable units
Prime
. Central Station
• Victoria Park/Kitchener
2%
City Hall
• Queen/Frederick
Established
. Grand River Hospital
• Kitchener Market
1%
• Borden
• Mill
Emerging
. Block Line
• Fairway
0%
• S ortsworld
e) The maximum rent that can be charged for affordable units will be determined
annually by the City, in consultation with the Region and according to the following
definition:
i) within buildings that are not purpose-built rental housing, the lesser of average
market rent for the regional market area according to the number of bedrooms; or
Page 570 of 592
30% of the 60th percentile household income for renter households for the regional
market area; and
ii) within purpose-built rental housing, the greater of the figure calculated in
accordance with subsection 4.3 e) i) above or 30% of median renter household
income for regional market area, as published from time to time by Canada
Mortgage and Housing Corporation.
f) Tenants of affordable units shall be pre -approved by the City in consultation with the
Region and have a maximum household income of 3.5 times the unit's rent at the
time the tenant first occupies the unit.
g) Affordable units shall be similar to market units in terms of mix, type, size, and quality
as further detailed in the agreements described in section 4.3 i).
h) Affordable units shall not exceed the maximum rent set out in subsection 4.3 e) and
will be provided to eligible tenants in accordance with subsection 4.3 f) for a
minimum of 25 years after the date the unit is first occupied.
i) Inclusionary Zoning requirements in Section 4.3 and related matters outlined in the
City's Official Plan and Planning Act shall be secured by one or more legal
agreements with the City, owner, and owner of offsite units if applicable, to the
satisfaction of the City Solicitor, and registered on title of the lands."
2. Section 19 is hereby amended by adding Site Specific Provision (4) as follows:
"Within the lands zoned SGA -2, SGA -3, or SGA -4 and shown as affected by this
provision on Zoning Grid Schedules 117, 118, 119, 143, 144, and 145 of Appendix
A, despite Table 4-1 of Section 4.3 of this By-law, the minimum amount of Gross
Leasable Residential Floor Area to be provided as Affordable units shall be in
accordance with the Prime Market Areas in Table 4-1. "
3. Zoning Grid Schedule Numbers 117, 118, 119, 143, 144, and 145 of Appendix A of By-
law Number 2019-051 are hereby amended by adding Site Specific Provision (4) as
shown on Attachment 1.
4. Appendix F is hereby added to By-law 2019-051 as shown on Attachment 2.
5. The following marginal note, which does not form part of this By-law in accordance with
section 1. 10, is added adjacent to Table 4-1 as follows:
"The City intends to amend the zoning by-law periodically to adjust the rates in this table
up to 5% by the year 2031 and according to market conditions as outlined in Official Plan
Table 3 and policy 4.C.1.56."
6. This By-law shall become effective when Official Plan Amendment No. xx (Inclusionary
Zoning), comes into effect pursuant to Section 24(2) of the Planning Act, R.S.O. 1990, c.
P. 13, as amended.
Page 571 of 592
PASSED at the Council Chambers in the City of Kitchener this day of , 2024.
Mayor
Clerk
Page 572 of 592
Attachment 1
Map showing the locations on Appendix A to By-law 2019-051 where Site Specific
Provision (4) apply
Page 573 of 592
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Attachment 2
New Appendix F to By -Law 2019-051 that shows detailed PMTSA boundaries and labels
Page 580 of 592
Appendix F. Protected Major Transit Station Areas
YL Trac scut I?a 7W
Page 581 of 592
BY-LAW NUMBER xxx
OF THE
CORPORATION OF THE CITY OF KITCHENER
(Being a by-law to amend By-law 85-1 known as the Zoning
By-law for the City of Kitchener — Inclusionary Zoning
WHEREAS it is deemed expedient to amend By-law 85-1;
NOW THEREFORE the Council of the Corporation of the City of Kitchener
enacts as following amendments to By-law 85-1:
1. Section 5 is hereby amended by adding the following section after section 5.33 FOUR TO
TEN DWELLING UNITS ON A LOT:
"5.34 INCLUSIONARY ZONING
a) For the purposes of this Section 5.34
"Affordable Unit" means a dwelling unit where the maximum rent is in accordance with
subsection 5.34 e), and is occupied by an eligible tenant in accordance with subsection
5.34 f) of this By-law.
"Complete Application" means an application that contains sufficient particulars and
information to allow it to be processed and approved. An application that is incomplete
becomes a complete application on the date that the required particulars and information
are provided to the City.
"Development" means the construction, erection or placing of one or more buildings or
structures on land or the making of an addition or alteration to a building or structure that
has the effect of substantially increasing the size or usability thereof.
"Eligible Tenant(s)" - means a tenant that is eligible to occupy affordable units in
accordance with subsection 5.34 f)
"Gross Leasable Residential Floor Area" means the aggregate horizontal area of
dwelling units in a building measured from the exterior faces of the exterior walls of all
storeys of a building. For greater clarity, Gross Leasable Residential Floor Area does not
include common or parking areas or storage lockers.
"Non-profit housing provider" means
Page 582 of 592
i) a corporation to which the Not -for -Profit Corporations Act, 2010 applies that is in
good standing under that Act and whose primary objective is to provide housing;
ii) a corporation without share capital to which the Canada Business Corporations
Act applies, that is in good standing under that Act and whose primary objective is
to provide housing;
iii) a non-profit housing co-operative that is in good standing under the Co-operative
Corporations Act; or
iv) an organization that is a registered charity within the meaning of the Income Tax
Act (Canada) or a non-profit organization exempt from tax under paragraph
149(1)(1) of that Act, and whose land is owned by the organization, all or part of
which is to be used as affordable housing.
"Purpose -Built Rental Housing" means all or part of a multiple dwelling or mixed use
building where dwelling units are not a unit within a registered condominium per section 2
of the Condominium Act, and which is intended for use as a rented residential premises.
"Regional Market Area" means the real estate market within the geographical boundary
of the Region of Waterloo.
b) The following regulations shall apply to the following Protected Major Transit Station
Areas identified on Appendix F to this by-law:
• Grand River Hospital;
• Central Station;
• Victoria Park/ Kitchener City Hall;
• Queen/ Frederick;
• Kitchener Market;
• Borden; and
• Mill.
C) Section 5.34 of this By-law does not apply to the following developments:
i) Existing buildings except where any addition or change in use would result in 50
or more new dwelling units;
ii) Development that would add fewer than 50 dwelling units to a lot;
iii) Development where a non-profit housing provider has an interest that is greater
than 51 per cent;
iv) Development that, on or before the effective date of the zoning by-law
amendment bringing this section 5.34 Inclusionary Zoning provisions into this By-
law, is the subject of a complete application for:
a. a plan of subdivision under section 51 of the Planning Act;
Page 583 of 592
b. a description or an amendment to a description under section 9 of
the Condominium Act; or
c. Building permit; and/or
d. Site plan control under section 41 of the Planning Act;
V) Development that is exempt in accordance with the Planning Act and associated
regulations;
vi) Residential Care Facility;
vii) Lodging House;
viii) Group Home;
ix) Correctional Group Home;
x) Hospice;
A) A student residence owned and/or operated by a post -secondary school; or
xii) The portion of any development that has received a `shell' building permit prior to
January 1, 2025.
d) A percentage of gross leasable residential floor area shall be provided as
affordable units in accordance with Table 5-1.
Table 5-1: Inclusionary Zonina Set -Aside Reauirements
e) The maximum rent that can be charged for affordable units will be determined
annually by the City, in consultation with the Region and according to the following
definition:
i) within buildings that are not purpose-built rental housing, the lesser of average
market rent for the regional market area according to the number of bedrooms;
Page 584 of 592
Protected Major Transit
Minimum Percentage of Gross Leasable
Market Area
Station Area
Residential Floor Area to be provided for
affordable units
Prime
. Central Station
• Victoria Park/Kitchener
2%
City Hall
• Queen/Frederick
Established
. Grand River Hospital
• Kitchener Market
1 %
• Borden
• Mill
Emerging
. Block Line
• Fairway
0%
• S ortsworld
e) The maximum rent that can be charged for affordable units will be determined
annually by the City, in consultation with the Region and according to the following
definition:
i) within buildings that are not purpose-built rental housing, the lesser of average
market rent for the regional market area according to the number of bedrooms;
Page 584 of 592
or 30% of the 601h percentile household income for renter households for the
regional market area; and
ii) within purpose-built rental housing, the greater of the figure calculated in
accordance with subsection 5.34 e) i) above or 30% of median renter
household income for regional market area, as published from time to time by
Canada Mortgage and Housing Corporation.
f) Tenants of affordable units shall be pre -approved by the City in consultation with the
Region and have a maximum household income of 3.5 times the unit's rent at the
time the tenant first occupies the unit.
g) Affordable units shall be similar to market units in terms of mix, type, size, and quality
as further detailed in the agreements described in section 5.34 i).
h) Affordable units shall not exceed the maximum rent set out in subsection 5.34 e) and
will be provided to eligible households in accordance with subsection 5.34 f) for a
minimum of 25 years after the date the unit is first occupied.
i) Inclusionary Zoning requirements in Section 5.34 and related matters outlined in the
City's Official Plan and Planning Act shall be secured by one or more legal
agreements with the City, owner, and owner of offsite units if applicable, to the
satisfaction of the City Solicitor, and registered on title of the lands."
2. APPENDIX "D" - SPECIAL REGULATION PROVISIONS FOR SPECIFIC LANDS to By-
law 85-1 is hereby amended by adding Special Regulation Provision 808R as follows:
"Notwithstanding Table 5-1 in section 5.34 of this By-law, within the lands zoned
M-2 on Schedule 143 of Appendix A, the percentage of gross leasable residential
floor area to be provided as affordable units shall be in accordance with the Prime
Market Areas in Table 5-1 ."
3 Schedule Number 143 of Appendix A to By-law Number 85-1 is amended by adding
Special Regulation Provision (808R) in accordance with Attachment 1.
4. Appendix J is hereby added to By-law 85-1 in accordance with Attachment 2.
5. This By-law shall become effective only if Official Plan Amendment No. xx (Inclusionary
Zoning), comes into effect pursuant to Section 24(2) of the Planning Act, R.S.O. 1990, c.
P. 13, as amended.
Page 585 of 592
PASSED at the Council Chambers in the City of Kitchener this day of , 2024.
Mayor
Clerk
Page 586 of 592
Attachment 1 Changes to Appendix A to By-law Number 85-1 to add Special Regulation
Provision (808R) to specified lands
Page 587 of 592
z
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Attachment 2
New Appendix J that shows detailed PMTSA boundaries and labels
Page 589 of 592
Appendix J. Protected Wor Transit Station Areas
Protected MTSA
Light Rail Transit (LRT)
Station
Kitchener
Market
Lands within Protected Major Transit Station Areas are subject to Inclusionary Zoning requirements, as outlined in Section 5 —
General Regulations and any other section(s) of Zoning By-law 85-1.
NETPoC SCALE 1 78.01 C
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Page 590 of 592
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