“You can neither lie to a neighbourhood park, nor reason with it. ‘Artists conceptions’ and persuasive renderings can put pictures of life into proposed neighbourhood parks or parks malls, and verbal rationalizations can conjure up users who ought to appreciate them, but in real life only diverse surroundings have the practical power of inducing a natural, continuing flow of life and use.”
-Jane Jacobs, The Death and Life of Great American Cities
There is no question that parks and public recreational areas while appreciated are often taken for granted. There is no doubting that parks are useful in ensuring the health, well-being and continuing vibrancy of our communities, take for example High Park in Toronto, Central Park in New York, Victoria Park in London, all central to the community fabric. However, more often than not there is disagreement over how parks are planned, what type of parks and who is responsible for paying for them.
The Ontario Government recently ended the consultation phase of its promised Housing Supply Action Plan. As part of this consultation, the government identified the fact that in high-growth urban areas, elevated prices have made it too difficult for people to afford housing. The government is also examining whether part of the housing affordability problem may be the result of government-imposed fees and charges.[1]
One of the specific areas that is under review is the municipal authority to require land developers to provide land for parks or to pay the municipality a fee to acquire the needed parkland (referred to as “cash-in-lieu”). The intention is that public parks are areas of land that are dedicated to be used for the public interest.
While the cash-in-lieu regime is a long-term concept, it is relatively unknown to new home owners, who inevitably pay this fee in the price of new housing.
Overview of Conveyance of Parkland and Payment of Cash-in-lieu of Parkland
The Planning Act (“Act”) has three sections that provide municipalities with the authority to take land for parks or to require cash-in-lieu of conveying the land:
- Development / Redevelopment: Section 42 provides that the taking may be imposed as a condition of “development or redevelopment” approval.
- Subdivisions: Section 51.1 provides that the taking may be imposed as a condition of “approval of a plan of subdivision”.
- Consents: Section 53(12) provides that section 51.1 applies to the granting of provisional consents to sever land.
Land Taking
Under each section of the Act, limits are imposed on how much land can be taken by the municipality for the purposes of parkland. The limits are 2% of industrial or commercial lands and 5% of all other development lands (“Standard Requirement”).
The goal is that the Standard Requirement will result in sufficient land to provide a park that meets the needs of the residents in a low to medium density development (detached homes, townhomes, and semi-detached homes). Unfortunately, when it comes to higher density development like apartment buildings, the Standard Requirement of 5% likely can result in insufficient parkland to meet the needs of the future residents of a high-rise.
To address this scenario, municipalities are also permitted to take an alternative to the Standard 5% of residential land up to a maximum of one hectare of land for each 300 dwelling units proposed (“Alternative Requirement”).
This Alternative Requirement can only be employed if the municipality’s Official Plan has specific policies dealing with this alternative requirement, and the municipality has prepared a parks plan that evaluates the need for parkland in the municipality.
As a practical matter, most municipalities impose the requirement that results in the greatest amount of land being conveyed to the municipality.
Cash Payment Alternative (Cash-in-lieu)
The Act gives a municipality the ability to opt for the payment of the value of land rather than the land itself. This “cash-in-lieu” of parkland makes sense since the location or size of the land available may not be suitable for a park. The Ontario Municipal Board (now the Local Planning Appeal Tribunal or “LPAT”) has been clear that the decision of whether to require conveyance of land or to accept cash-in-lieu is at the sole discretion of the municipality.
If the municipality opts for cash-in-lieu, there are two different rules depending on whether the Standard Requirement or the Alternative Requirement is chosen by the municipality:
- Standard Requirement: the municipality may require a payment of cash-in-lieu to the value of the land otherwise required to be conveyed. That is, they may require payment in cash of the value of up to 5% of the residential land.
- Alternative Requirement: the municipality may require a payment of cash-in-lieu calculated by using a rate of one hectare of land for each 500 dwellings units proposed, or a lesser rate as specified in a by-law.
The complexity of imposing the cash in-lieu requirement is valuing the land, and this is often done through a municipal by-law. For example, in the City of London, the parkland conveyance by-law establishes that a cash-in-lieu payment under the Alternative Requirement is determined based on the type and number of houses in the proposed development. As of September 1, 2018, the cash-in-lieu price for a residential detached dwelling ranges from $1000 to $1900 depending on the frontage.[2] The City of Toronto calculates the parkland dedication on the basis of 0.4 hectares per 300 units with a cap of 10 to 20 percent of the site area, or cash-in-lieu.[3] A study by the Building Industry and Land Development Association (BILD) found that this parkland fee can add almost $20,000 to the cost of a new high-rise condo unit in Toronto.[4]
The Act also provides that a dispute over the value of the land may be appealed to the Local Planning Appeal Tribunal, with the value determined by the LPAT in accordance with the Expropriations Act.
Most municipalities require payment at the time of the first building permit rather than at the time of development approval likely because this is when land is at its most valuable.
Inherent Value of Good Park Planning
Most people recognize the value of having high quality municipal parks, and the reality is that park land costs money. A general principle of land use planning in Ontario is that growth should pay for growth. That is, it only makes sense that the development that requires the additional parks should do its part to pay for this crucial municipal infrastructure.
The question is whether this regime needs to be revisited in light of the costs of development. BILD also reports that up to one-quarter of the price of new housing in the Greater Toronto Area consists of fees, taxes and charges imposed by federal, provincial and municipal governments.[5] There is no question that parks are an integral part of our community and are integrated into our lifestyle. However, the question for developers and municipalities alike is whether there are innovative ways to provide “park” and “park-like” spaces in a manner that reduces costs to developers, new home buyers, and the municipalities that have long term maintenance costs for park areas.
[1] Theme three of the Government’s Consultation document.
[2] City of London Parkland Conveyance and Levy By-law, CP-9 Consolidated, July 28, 2018.
[3] City of Toronto Municipal Code, Chapter 415, Article III.
[4] http://torontostoreys.com/2018/10/toronto-condos-expensive-parkland/