Official Plan Amendment 231 - Ontario Land Tribunal Hearing - Request for Directions

Official Plan Amendment 231 introduced office policies to Chapter 3 of the Official Plan, including Policy 3.5.1.9 which requires office replacement in the Downtown and Central Waterfront, Centres, and within 500 metres of an existing or an approved and funded subway, light rapid transit or GO train station. In these areas, any development that includes residential units on a property with at least 1,000 square metres of existing non-residential gross floor area used for offices is required to increase the non-residential gross floor area used for office purposes. Policy 3.5.1.9 was appealed by a number of appellants, has not been adjudicated by the Ontario Land Tribunal and is not in effect. The Ontario Land Tribunal has not yet scheduled a hearing respecting this policy. However, similar policies have subsequently come into force through separate amendments to the Official Plan, but only in certain parts of Downtown and Midtown Toronto. In May 2018, Toronto City Council adopted the Downtown Official Plan Amendment (Official Plan Amendment 406) pursuant to Section 26 of the Planning Act. In July 2018, Toronto City Council adopted the Midtown Official Plan Amendment (Official Plan Amendment 405), also pursuant to Section 26 of the Planning Act. Official Plan Amendments 405 and 406 were submitted to the Ministry of Municipal Affairs and Housing for review and approval. The Minister issued a decision approving the Official Plan Amendments with modifications in June 2019. The Official Plan Amendments were not subject to appeal and are now in force. The Downtown Plan contains numerous policies that emphasize the importance of Downtown as an economic driver for the city, region and province, with the protection and promotion of non-residential uses in the Financial District, the Health Sciences District, the King-Spadina and King-Parliament Secondary Plan Areas and the Bloor-Bay Office Corridor. The policies required 100 percent replacement for all office GFA, but allowed for replacement to be provided at another nearby site. The Yonge Eglinton Secondary Plan requires that in Mixed Use Areas A and B, tall buildings and large redevelopment sites capable of accommodating multiple buildings will provide 100 percent replacement of any existing office gross floor area located on the site. All or a portion of the office replacement may be transferred to a receiving site within the Yonge Eglinton Secondary Plan area, subject to certain requirements. In 2023 and 2024, the City of Toronto's Planning and Housing Committee and Executive Committee, respectively, requested City Planning and Economic Development and Culture staff study the potential conversion of office space across the City into housing, consider what zoning and other regulatory or policy relief may be required to enable economically viable office conversions and evaluate the feasibility of requiring the provision of affordable housing in lieu of the replacement of office space. The Office Space Needs Study was initiated in the forth quarter of 2023 to analyze current office market conditions, understand the benefits and risks of converting office space to alternative uses, and explore policy options that would balance office needs in the short-term and long-term, while ensuring the City's economic role remains competitive and resilient. The City retained a land economics and planning consultant ("Parcel Economics") to prepare an in-depth analysis and report respecting office needs to inform any revised policy proposal. In June 2024, the Planning and Housing Committee endorsed a proposed policy direction through Item PH14.9, which asked staff to bring forward a new replacement policy that: - directs staff to revisit the policy framework every four (4) years or until, in Council's opinion, the supply and availability of office in the City has returned to a healthy state, putting in place a temporary office replacement policy framework that is responsive to market conditions and Council priorities. - varies on location within the city, with a focus on the geographies corresponding to existing replacement policies of Chapter 3 (3.5.1.9), Downtown Plan and Yonge-Eglinton Secondary Plan. - reduces office replacement from 100 percent to a minimum of 25 percent of existing office space and that such replacement may be replaced with other identified alternative uses. - allows the replacement of office space with any other non-residential use and a combination of affordable and/or supportive housing. - is based on the above and includes wording that allows the temporary policy framework to prevail over existing Secondary Plans contained in Chapter Six of the Official Plan in the case of a conflict. The consultant's background report was made public in July 2024 as part of PH14.9 and included analysis of market and economic trends, the policy framework, a jurisdictional scan and the results of stakeholder interviews. Staff conducted further consultation. The consultant's final report was made public in November 2024 as part of a report to Planning and Housing Committee (PH17.13). Based on the findings of the consultant's report, staff recommended that any replacement policy apply only to four key areas of the Downtown Plan and Yonge-Eglinton Secondary Plan with in-force office replacement policies. The four key areas are: Financial District, Bay-Bloor Corridor, Health Sciences District; and Yonge-Eglinton Mixed Use Areas A and B. The consultant's report acknowledged that the feasibility of new office development is challenging in the near term but noted that consideration should be given to balancing current development pressures that predominantly focus on residential uses with longer-term goals relating to growth in office and other forms of employment and recommended that any revised policy or policies be monitored in response to market conditions and other factors. Based on the direction from Planning and Housing Committee through PH14.19 and PH17.9, City staff pursued implementation of the modified policy through the existing Official Plan Amendment 231 appeal process, including that the modified policy would delete office replacement requirements of Policy 3.5.1.9 outside of the Downtown and Midtown and override the in-force policies of the Downtown Plan and Yonge-Eglinton Secondary Plan, such that office replacement requirements, as amended, would be reduced for sites currently subject to the Downtown Plan and Yonge-Eglinton Secondary Plan, which currently require 100 percent replacement. The City approached Official Plan Amendment 231 appellants who had identified Policy 3.5.1.9 in their notices of appeal to canvass interest in mediation. The City also issued public notice of its intent to consider modifications to the policy and wrote to owners of office buildings in Downtown and Yonge-Eglinton Secondary Plan Areas inviting them to express an interest in participating in further discussions regarding revised policies regardless of whether they were an appellant or party in Official Plan Amendment 231 litigation at the Ontario Land Tribunal. Approximately 26 parties engaged in mediation represented by over 15 legal counsel. Three days of mediation were held in October 2025, with the expanded appellant group. Through adoption of PH17.13, Planning and Housing Committee requested the City Solicitor to report back on implementation through Official Plan Amendment 231. The City Solicitor requires further directions on the outcome of mediation.

Attachment 1 and the entirety of Confidential Appendix A to this report from the City Solicitor is to remain confidential at the discretion of the City Solicitor, as it contains advice which is subject to solicitor-client privilege.