Taking the Powers of Cities Into Account When Developing Your Projects

In recent years, certain municipal powers have been granted, reinforced or expanded. Many of them have a real impact on infrastructure and major projects currently under way, as well as the manner in which redevelopment projects in our cities will be carried out in the very short term.

These changes stem in particular from the adoption of Bill 122 entitled An Act mainly to recognize that municipalities are local governments and to increase their autonomy and powers on 15 June 2017, as well as Bill 155, entitled An Act to amend various legislative provisions concerning municipal affairs and the Société d'habitation du Québec on 19 April 2018.[1]

In this article, we will briefly discuss:

• Changes in relation to contributions for the purposes of parks and playgrounds and the preservation of natural area, 
• The possibility of making the procurement of a permit for the construction of residential units subject to compliance with certain rules relating to affordable, social or family housing, and 
• The City of Montreal's pre-emptive right.

Contributions for the Purposes of Parks and Playgrounds and the Preservation of Natural Area

This well-known contribution has existed since 1993, but was modified in 2017. Firstly, a new condition for which park fees may be charged has been added to the Act respecting land use planning and development, namely where a building permit is requested for works to allow new activities to be carried out on the building.

As was the case previously, this condition must be added to local municipal by-laws in order to be applicable. Local by-laws can of course vary from one municipality to another. More specifically, this means that work that would allow a change as to the use (for example, from industrial to residential for the reallocation of a former factory) could result in the payment of a contribution for the purposes of parks, even in the absence of a subdivision.

The calculation of what can be requested in terms of a contribution for parks (the famous 10%) has also been expanded. When a municipality provides for this in its by-law, here is what it can request:

• Maximum of 10% for a cash-only contribution;
• Maximum of 10% in cash when the contribution is made both in land and cash. This means that in total, the contribution in terms of land and money can be greater than 10%;
• Land with an area greater than 10% when the subdivision or construction is carried out in a central area of the municipality and constitutes all or part of a green space;
• In other cases, a land-only contribution will be a maximum of 10%;

Affordable, Social or Family Housing

In 2017, a new section was added to the Act respecting land use planning and development to allow municipalities to effectively require a number of affordable, social or family housing units when applying for a building permit for residential units; a practise that was previously done on a voluntary basis.

To impose this type of housing in a residential construction project, a municipality must adopt a by-law ensuring that an agreement containing certain conditions is signed before the permit is issued. These conditions must be provided for in the municipal by-law, in accordance with the urban planning guidelines. The agreement with the developer will either provide for the construction of certain affordable, social or family housing units, or the transfer of a building or payment of an amount to the city. The building or amount provided will be used to implement an affordable, social or family housing programme. The municipal by-law must indicate the calculation rules for determining the percentage of affordable, social or family housing, or the calculation for payment by way of a building or money. The agreement also governs the size and number of rooms required in the affordable, social or family housing units, their location in the housing complex or elsewhere in the municipal territory, as well as their design and construction. The agreement may also establish rules to ensure the affordability of housing for a term which it will determine.

Our understanding of the distinction between these three types of housing is that affordable housing is cheaper, social housing is subsidised and family housing is larger. The by-law adopted by each municipality may, however, define these types of housing using more specific criteria. It is obviously possible for a housing unit to meet several of these criteria concurrently.

The draft by-law of the City of Montreal

The City of Montreal adopted a draft By-law to improve the supply of social, affordable and family housing[2] on June 12, 2019. Its final adoption is scheduled for early 2020 and it will come into force on January 1st, 2021. Consultations are currently in progress.[3] We will not discuss the content of this by-law in detail here, as changes may be adopted to the draft by-law following the consultations. The City of Montréal has drawn up the following table, which summarises the contributions currently contemplated under this by-law:

[4]

The City of Montreal's Pre-Emptive Right.

Bill 121, which was adopted in September 2017, amended the Charter of Ville de Montréal to add a section to Schedule C providing for a pre-emptive right for the City. Under this new power, the City could adopt a by-law determining the properties which would be subject to a pre-emptive right; this occurred in October and November 2018 via the adoption of two by-laws, namely the By-law determining the park territories in which the city's pre-emptive right may be exercised and in which immovables may be acquired for the purposes of regional parks and the By-law determining the urban planning sectors in which the city's pre-emptive right may be exercised and the purposes for which buildings can be acquired.

For properties that meet the criteria established by these by-laws, the City of Montreal must enter a notice of intention in the land register, which will remain in effect for 10 years. Owners not selling their property are not required to do anything. However, owners who intend to sell their property and accept an offer must inform the City by sending a notice of intention to alienate their property[5]; failure to do so may result in the City cancelling the sale. Such notice of intention is not required when the proposed sale is between related persons. The City will then have 60 days to decide if it intends to purchase the building under the same conditions as those set out in the offer. If the City does not exercise this right, the sale may take place and the City's pre-emptive right will terminate.

An owner who wishes to sell their property should, therefore, consult the land register and these by-laws in order to establish whether their building is subject to this pre-emptive right.

No other city in the province of Quebec has this right.

These relatively recent rules will certainly have an impact on the way major projects, or even the redevelopment projects within our cities will be carried out in the very short term. Developers must be aware of these rules, not only to be able to ensure compliance when planning a development project, but also to ensure the profitability of the project. It goes without saying that these rules will have an impact on developers' wallets and may as well affect the time required to negotiate the various agreements with municipalities.

  

[1] This does not take into account Bill 121, adopted on 21 September 2017, entitled An Act to increase the autonomy and powers of Ville de Montréal, the metropolis of Québec, and Bill 109, entitled An Act to grant Ville de Québec national capital status and increase its autonomy and powers , which was adopted on 8 December 2016.  [2] Also known as the By-law for a diverse metropolis and better known as the 20-20-20 rule because of the calculation rules contained therein  [3] http://ocpm.qc.ca/fr/metropole-mixte  [4] Available at : https://ville.montreal.qc.ca/pls/portal/docs/page/habitation_fr/media/documents/by-law_for_a_diverse_metropolis-summary.pdf  [5] Form available at https://ville.montreal.qc.ca/pls/portal/docs/PAGE/PRT_VDM_FR/MEDIA/DOCUMENTS/FORMULAIRE_AVIS_INTENTION_ALIENER_IMMEUBLE.PDF