We heard recently that the city of Toronto is getting around to collecting outstanding bills developers owe to pay for things like recreation centres and parks. This is all part of a system known as Section 37 of Ontario’s Planning Act, which allows Toronto to collect community benefits from developers in return for the city giving them more height and density.
On the face of it, this matter appears to be nothing more than a series of clerical errors and calls for additional oversight gone unheeded; the inertia of a bureaucracy playing catch up to the constant flow of new development applications. But bigger consequences loom in Toronto’s residential condominium boom where growth must pay for growth. There are missed opportunities where the city is affected but not sufficiently compensated.
Pointing the finger at a developer shirking their responsibility to pay up is easy, but when looking deeper we see a municipal system with cracks and blind spots. Insufficient monitoring and enforcement of community benefits has led to some deals falling through, such as the plan to restore Mimico’s historical train station. Toronto’s Ombudsman found that insufficient city enforcement protocols allowed one developer to walk away from what they agreed to deliver. In another case, an agreement for a community centre in a new condo building was changed to a location one kilometre away at the behest of the local councillor (the justification being that building a larger community centre could service more people and therefore be more cost-effective). Even so, this reinforces the opaque nature of development deals when decisions are ostensibly made in the public interest then changed out of public view. In both instances, communities lose out on investments they expected, creating frustration and conflict in a process that can span decades. Digging deeper, the devil is in the details. Neighbourhoods are led to believe that Section 37 agreements are legally binding, but since 2014, city planning staff include a clause that enables funds unspent three years after development approval to be reallocated.
Development contributions improve the fabric of neighbourhoods. In the past six years alone, the city has received upwards of $300-million in Section 37 funds mostly in concentrated growth areas like downtown and midtown. In the last three years, Section 37 has secured upward of $90-million towards 150 community facility projects (child care, libraries, recreation centres) making important contribution toward Toronto’s 10-year capital plan. But when neither the city nor developers are held accountable, the promise of Section 37 falls down. It took eight years to ensure outstanding bills were accounted for, the same period that parts of Toronto have experienced the most explosive growth in its history.
Instances of lack of enforcement and accountability may be the exception not the norm, but they have nonetheless sparked policy change. Newly created provincial legislation will require municipalities like Toronto to report annually on their financials for community benefits, while also spending 60 per cent of cash benefits in the calendar year. This requirement may not be a bad thing, ensuring contributions are accounted for and spent more quickly. Deploying funds can take years as monies often sit idle while infrastructure needs grow. Often city councillors pool multiple Section 37’s to fund a bigger and more impactful project. At the same time, however, this practice can span a decade. The John Street Cultural Corridor project, for example, has received upwards of $15-million in Section 37 earmarked toward public realm and pedestrian upgrades since the mid-2000s, but only now are investments and construction beginning. In that time, the area has seen a steady increase in population placing significant strain on existing infrastructure to support growth.
These issues may seem minor and out of sight, which they sometimes can be. But they are consequential. They send a clear signal that the city needs to be consistently accountable for important public decisions. In essence, the city is preventing itself from achieving its goals of building livable and healthy communities. Citizens are also wondering if and when they will get their community centre or park upgrade. Toronto is tripping over itself to build higher and denser buildings, but if supporting community infrastructure doesn’t follow – reliably, consistently and in a timely manner – the promise of development will fail.
Credit: Jeff Biggar teaches City Studies at the University of Toronto Scarborough.