Ontario’s Affordable Homes and Good Jobs Act, 2023 Receives Royal Assent

Bill 134, the Affordable Homes and Good Jobs Act, 2023 (“Bill 134”), received royal assent in Ontario on December 4, 2023.

Bill 134 generally does two things. First, it amends the Development Charges Act, 1997 to create new definitions for the sections which exempt affordable residential units from development charges. Second, Bill 134 enables the City of St. Thomas to grant assistance to the Volkswagen Group (nominally, 1000511515 Ontario Inc.) in support of a proposed electric vehicle battery cell manufacturing facility in the city. This newsflash addresses the changes to the Development Charges Act, 1997.

Development Charges Act, 1997

In November 2022, the More Homes Built Faster Act, 2022 (“Bill 23”) received royal assent in Ontario. This piece of legislation brought forward significant amendments to multiple statutes. One such amendment was the introduction of new sections 4.1, 4.2 and 4.3 of the Development Charges Act, 1997. These sections provide development charge exemptions for the creation of affordable residential units and attainable residential units for non-profit housing developments and for inclusionary zoning residential units.

The development charge exemption for non-profit housing developments and inclusionary zoning residential units has been in force since November 28, 2022. The exemption for affordable and attainable units are not in force.

Bill 134 further amends the Development Charges Act, 1997 to change definitions for affordable residential units (rental and ownership) and to introduce “income based” rents and purchase prices. These definitions, as amended by Bill 134, are set out below.

Affordable Residential Unit, Rental

A residential unit intended for use as a rented residential premises shall be considered to be an affordable residential unit if it meets the following criteria:

The rent is no greater than the lesser of:

i. the income-based affordable rent for the residential unit set out in the Affordable Residential Units bulletin, as identified by the Minister of Municipal Affairs and Housing; and

ii. the average market rent identified for the residential unit set out in the Affordable Residential Units bulletin.

Income-Based Affordable Rent

In identifying the income-based affordable rent applicable to a residential unit, the Minister of Municipal Affairs and Housing shall:

i. determine the income of a household that, in the Minister’s opinion, is at the 60th percentile of gross annual incomes for renter households in the applicable local municipality; and

ii. identify the rent that, in the Minister’s opinion, is equal to 30 per cent of the income of the household.

Affordable Residential Unit, Ownership

A residential unit not intended for use as a rented residential premises shall be considered to be an affordable residential unit if it meets the following criteria:

The price of the residential unit is no greater than the lesser of:

i. the income-based affordable purchase price for the residential unit set out in the Affordable Residential Units bulletin, as identified by the Minister of Municipal Affairs and Housing in accordance with subsection (6); and

ii. 90 per cent of the average purchase price identified for the residential unit set out in the Affordable Residential Units bulletin.

Income-Based Purchase Price

In identifying the income-based affordable purchase price applicable to a residential unit, the Minister of Municipal Affairs and Housing shall:

i. determine the income of a household that, in the Minister’s opinion, is at the 60th percentile of gross annual incomes for households in the applicable local municipality; and

ii. identify the purchase price that, in the Minister’s opinion, would result in annual accommodation costs equal to 30 per cent of the income of the household.

These amended definitions (and the overarching development charge exemptions for affordable and attainable units first introduced by Bill 23) are not yet in force and will come into force on a day to be named by proclamation of the Lieutenant Governor of Ontario.

The Municipal & Land Use Planning Group at Aird & Berlis is one of the largest and most highly recognized practice groups of its kind in Canada. If you have questions or require assistance regarding Bill 134, please contact the author or a member of the group.