Seeking Feedback on Future Regulations To Create A Balanced Framework Around Municipal Rental Replacement By-Laws
Bill or Act:
Municipal Act, 2001 and City of Toronto Act, 2006
Summary of Decision:
Bill 97, the Helping Homebuyers, Protecting Tenants Act, 2023, received Royal Assent on June 8, 2023.
Bill 97 amends s.99.1 of the Municipal Act, 2001 and s.111 of City of Toronto Act, 2006 giving the Minister of Municipal Affairs and Housing new regulation-making authority to govern municipal powers that regulate the demolition/conversion of residential rental properties of six or more units.
The legislative changes on their own do not change existing municipal by-laws. Rather, the new regulation-making authority will help enable the Province to establish a balanced regulatory framework for municipal rental replacement by-laws that would increase consistency across and between municipalities that establish these by-laws and help streamline the construction and revitalization of rental housing, while protecting tenants.
The ministry sought feedback on areas being considered for potential regulations. A summary of feedback is provided below.
In instances where a municipality requires replacement of demolished units, the majority of respondents were supportive of tenants being provided a replacement unit, at or near the demolished unit, at a similar rent. Feedback referenced a need for flexibility and discretion where replacement may not be necessary (e.g., when the municipality's vacancy rate is high).
Most respondents were supportive of a common set of rules outlining tenant compensation requirements, with various suggestions on the types of compensation that should be provided.
The majority of respondents were supportive of requiring replacement units to include the same number of bedrooms as the previous unit. Feedback was mixed on whether replacement units should be permitted to be smaller than units they are replacing.
The government is considering the feedback received to inform the development of future regulations, if any, under this new authority.
Analysis of Regulatory Impact:
There are no anticipated regulatory impacts of this legislation as it is only creating a regulation-making power. However, if the authority is utilized, future regulations made under the Minister's regulation-making authority could directly affect the by-laws of a very small number of municipalities that currently choose to have rental replacement by-laws. Work on future regulations would consider possible administrative/other costs to impacted municipalities. The proposal to create Minister's regulation-making authority will not create any fiscal impacts for the provincial government.
April 6, 2023
Summary of Proposal:
Under s.99.1 of the Municipal Act, 2001 (MA) and s.111 of City of Toronto Act, 2006 (COTA), municipalities may enact bylaws to prohibit and regulate the demolition or conversion of multi-unit residential rental properties of six or more units.
Rental replacement by-laws vary among municipalities and include requirements around number, size, type, and cost of rental units, as well as right of first refusal for existing tenants. Only a small number of municipalities are known to have rental replacement bylaws.
Proposed Legislative Amendment:
The government is proposing to enact a Minister's regulation-making authority to enable the Minister to set minimum requirements which municipalities must impose on landowners, if they have rental replacement by-laws. This would increase consistency across and between municipalities that establish by-laws.
Proposed changes build on recent changes made under Bill 23, More Homes Built Faster Act, 2022, which provided the Minister with authority to prescribe limits to municipal powers related to demolition and conversion of residential rental properties of six or more units. The proposed changes would provide the Minister the authority to make regulations to create a balanced framework around municipal rental replacement by-laws that could help provide additional protections to tenants while working to increase housing supply.
Proposed New Regulations:
As part of their regulation of demolition and conversion of residential rental buildings of six or more units, municipalities may require demolished units to be replaced with newly constructed units, often referred to as 'replacement units'.
The Ministry of Municipal Affairs and Housing is seeking feedback on potential regulations that would apply to municipalities that pass bylaws under s.99.1 of the MA and s.111 of COTA. The regulations would prescribe limits to municipal powers under those sections, as well as minimum requirements that municipalities must impose on landowners of 'replacement units' to increase protections for displaced tenants.
Where tenants are displaced due to the demolition/conversion of their rental unit, the government intends to consider future regulations that would regulate matters such as:
1. Prescribe minimum requirements for landowners to give tenants the option to rent a 'replacement unit' at the same location as their demolished unit, and at a similar rent. This requirement would apply in instances where a 'replacement unit' is required to be built at the same location as the demolished unit.
2. Set common rules about the types of compensation that would be required to be provided to displaced tenants.
3. Prescribe minimum requirements for landowners to build 'replacement units' with the same core features (e.g., same number of bedrooms) as demolished units.
4. Limit municipalities from imposing minimum square footage requirements for 'replacement units'.
The government is seeking feedback on additional elements that could be included as part of this proposal. For example:
A. Should rent for replacement units be regulated? If so, how?
B. Are there any types of entities/institutions that own or operate residential rental properties of six or more units that should be exempt from rental replacement rules? If so, what are they, and why should they be exempt?
C. Are there any other elements the government should consider?
Royal Assent Date:
June 8, 2023