To develop, or not to develop

Too many conversations about municipal development come packed with assumptions, including the assumption that it’s a binary decision: to develop, or not to develop. But that’s not actually the question! Development can be a great thing, or it can be a bad thing; most often it’s a little of both. (I’ve written about the development process before, here.)

It’s also not really optional: unless we decide as a community that we won’t allow any residents to sell or build upon their land for any reason, development will happen. The point of having an Official Plan is that while we can’t stop all development from happening (even if we would want to!), we can decide on what types of development are appropriate for a given piece of land.

Except when we can’t. Two big news stories this week show that federal and provincial authorities can override municipal authority about zoning.

First, last week the Supreme Court of Canada made a ruling, in a 5-4 decision (splitting the court between the 5 Justices appointed by Stephen Harper and the 4 Justices appointed by Justin Trudeau, part of a recent and disturbing trend that hints at the politicization of our court), that opens up greater possibilities for developers to sue municipal governments over zoning issues. This analysis is a bit technical and jargony, but the gist of it is as follows:

  • A private company (Annapolis Group, Inc.) owns 1,000 acres in Halifax, land that is zoned Future Development
  • That zoning in Halifax prohibits development of the land until 2031, but the company wants to develop it now, and its requests to rezone the land have been denied
  • Halifax has, allegedly, been encouraging the public to use the land as a park; it is adjacent to land that the municipality has purchased and promoted as public parkland
  • The company argues that Halifax has effectively expropriated the land, because the company is not able to develop it and Halifax residents are using it as a park. They sued Halifax for $120M
  • Lower courts threw out the case, but the Supreme Court has ruled that the case must be heard

The important distinction the Supreme Court has made is that even though Halifax doesn’t have an “interest” in the land in any legal sense (i.e., owning a share of it or somehow profiting from it), it is advantageous to Halifax to stop the company from developing it and therefore continue using it as parkland. The company argues that the municipality needs to compensate them for that, to the tune of $120 million dollars; or to allow for development.

This is really problematic, because it sets a precedent in Common Law that effectively allows a company to buy up land that it can’t use on the hope of getting the zoning changed, and then suing to cover its losses if the gamble doesn’t pay off. Of course there’s no guarantee that they would win such a lawsuit, but the costs of defending such a lawsuit alone may be enough to cause many municipalities to cave.

The land in question, Blue Mountain – Birch Cove Lakes, near Halifax. The municipality has reserved this land for a potential park, zoning it accordingly, but has not yet moved to purchase it. Even so, Annapolis Group Inc, the current owners, are suing because the municipality won’t rezone it for immediate development.

Zoning determines the value of land. Land that cannot be built upon is cheap, because it’s effectively “useless” in an economic system that values land largely based on what can be built upon it. When a municipality zones land as EP (Environmental Protection) or FD (Future Development), it’s a way for a community to regulate its own growth, determining what should be saved forever and what should be saved for now. Without the ability to do that, development happens in a haphazard way that doesn’t make for a healthy community. But if developers can buy “useless” land for cheap, and then apply for rezoning with the implicit threat of a lawsuit if their application is denied, how much can we really regulate our own growth?

It raises the issue of land banking. Land Banking is when land is purchased for future use rather than immediate use. When this is done by a private individual or corporation, it can be very problematic: speculators may purchase land and just hold it until it becomes more valuable, and then sell it for much-needed development. This raises the cost of development significantly, and at times like these when we desperately need affordable housing, that’s a problem. But some of Brighton’s leaders have been talking about municipal land banking: the municipality purchasing available properties for future municipal use, which might include affordable housing, environmental protection, or public infrastructure. If zoning is the basis for lawsuits against the municipality, we may need to buy land to ensure that zoning sticks, particularly if the intent of a given zone is to prevent development there. We may need to bank land, not just for the sake of specific projects and purposes, but to avoid lawsuits. I’ll write more about Land Banking soon.

Second, the province just passed Bill 23, the More Homes Built Faster Act. There’s a LOT to this bill, passed the day after the municipal election, so I’ll have a full post about it soon, maybe a few. The short of it is that this Act gives the province more power over the development process. For example, the matter of exclusionary zoning was a hot topic in municipal elections across the province, but the PC government has made the debate moot by saying that even zoning that currently only allows for one dwelling unit per lot can now have three dwelling units. (I’m really in favour of 2-3 units per lot in established neighbourhoods, there are a lot of benefits to that density; but not every neighbourhood is the same, and while making this change is probably right for most neighbourhoods in the province, making it by fiat from the provincial government really undermines local decision making!)

Combined with the provincial government’s ability to overrule Conservation Authorities and issue permits in places the CA deems unsafe or environmentally protected; and their issuing of “Strong Mayor” powers to the mayors of Toronto and Ottawa (with plans to extend those powers to other municipalities) explicitly to expedite development; and their repeated attempts to open up the Greenbelt to development, going back several years (and thankfully still unsuccessful); it’s clear that the Ford PCs aren’t content to let municipalities regulate their own land use. They continue to concentrate their power over municipalities, at municipal expense: the Act includes reducing development charges, one of the few ways municipalities can raise the funds needed to expand municipal infrastructure to accommodate new developments.

More to come on this Act, but it’s a great example of how little power municipalities have to decide how we’ll grow.

One thought on “To develop, or not to develop

  1. Hi Jeff, congratulations. I have really appreciated your education on development. And your comments on affordable housing. Which we need more of everywhere, including Brighton (where I gratefully live). We must take care not to become a BANANA (build absolutely nothing anywhere near anyone) community in Brighton.

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