Special Council Meeting

4:52Well good evening everyone and welcome to a special City Council meeting.

4:59We are here meeting today on Wednesday, May 29th, 2024.

5:03It is six o'clock to sit to hear what's called a public meeting to hear a complaint under

5:12section 20 of the Development Charges Act 1997.

5:19We don't often have these but you know these are the processes and options available for

5:26people that would like to submit a complaint where we sit in a way as a tribunal to make

5:33a decision based on the complaint.

5:37And so this is a hearing by City Council of that complaint that was originally dated April

5:44the 6th, 2024.

5:47As I said it was made under section 20 of the Development Charges Act 1997 by Justin

5:52Black of Robson Carpenter LLP which is the agent 300 Water Street, Inc.

6:00And that is the complaint.

6:03Regarding the property at 300 Water Street, Ingwelf on the basis of two points.

6:10The first is the amount of the development charges was incorrectly determined.

6:16And the second one is there was an error in the application of the Development Charges

6:21bylaw.

6:23So Council's role will be to give the complaint and the respondent City an opportunity to

6:30make presentations and representations.

6:34And after hearing the evidence and submissions, Council could dismiss the complaint or rectify

6:40any of the incorrect determination or errors that was subject of that complaint.

6:48I would encourage my colleagues to take notes throughout the deliberations.

6:55And at this time I'd like both parties just to introduce themselves.

7:04So maybe I'll start with you and then go over to the City side.

7:09Go right ahead.

7:10You can hit the button there.

7:11Your microphone's returning green.

7:12Yep.

7:13Go ahead.

7:14Thank you.

7:15Justin Black, I'm a lawyer at Robson Carpenter representing the Complaint and 300 Water Street,

7:20Inc.

7:21Great.

7:22Thank you.

7:23Good evening, Mr. Mayor and Council.

7:25Alison Thornton, I'm an associate solicitor with the City of Guelph.

7:29Great.

7:30Thank you.

7:31So at this time I would like to ask you, the Complaintant, Representative, to make the

7:37submissions on behalf of your client.

7:41After those submissions are made, then it would come back to us and we could ask some

7:44follow-up questions if need be and we'll kind of go back and forth.

7:50And I believe we have a time limit of around 10 minutes, please.

7:55And I kind of hold fast to those time limits, so please don't let me cut you off if I don't

8:00like doing that.

8:01So I will turn the microphone over to you.

8:03Please feel free to go and stand where the delegates are.

8:06And whenever you're ready, you can go ahead and start, okay?

8:08Sure.

8:11Thank you.

8:12First off, again, just appreciates everyone's time tonight.

8:17I'm here on behalf of the Complaintant, which is 300 Water Street, Inc.

8:23Just some background, 300 Water Street, Inc. is a company that's part of the Spruce Living

8:30Group of Companies.

8:32Now Spruce Living is a relatively new group of companies that was formed by Mezcon Construction's

8:40Zachary Fisher and Andrew Arkley.

8:43Both Zach and Andrew are longtime Guelph residents and they created the Spruce Living Partnership

8:50with the intention of developing as many residential rental units they can that's feasible to them.

8:59And let me tell you, they are really trying.

9:02And their particular focus is where they're comfortable, which is in the city of Guelph.

9:07And their focus is also where they're comfortable, the type of construction being detached homes,

9:12semi-detached homes and town homes.

9:15That's what Mezcon Construction has done for, I believe, around 14 years.

9:22Now we're here talking about 300 Water Street municipal address, sorry, it was formerly

9:30300 Water Street.

9:31It's since been severed and now there's six separate addresses.

9:36I provided just the Google Maps aerial of the location of the property at page four of our

9:43materials.

9:46And the next page is just an aerial view of the property prior to our clients developing.

9:54It was a triangular piece of land, Water Street and Denver intersection that was completely

10:02vacant.

10:03I don't know the last time there was a house or structure on the property.

10:07I couldn't find anything in our due diligence searches.

10:11So our client acquired this property and began developing.

10:16And their development is comprised of six town home units that are all fronting on Water

10:25Street and then a detached home that fronts on Denver Road.

10:30The detached is not a subject to this hearing.

10:34We have no complaints with the development charges that were paid for that aspect.

10:41But we're here because when our clients were issued building permits for the six town homes,

10:48they were required to pay $228,552 in development charges, which was the full rate applied for

10:59all six of those town home units.

11:04And our position is that our clients were to benefit from the 25% reduction established

11:12in the development charges act for rental buildings, for qualifying rental buildings.

11:18So the proper amount they should have paid was $171,414, which leaves today a requested

11:26return of the difference, which is $57,138.

11:33The 25% reduction is part of the changes to the development charges act that the government

11:41Ontario introduced in late 2022.

11:45The government introduced changes with the intent to promote residential rental units

11:53in Ontario.

11:56And I can only guess that everyone here would agree to some extent that the city of Guelph

12:02is in pretty dire need of more rental housing, just like every other municipality in the

12:08province.

12:10So the incentive was established in the development charges act and it's section 26.2.

12:16But the requirement essentially has, there's three main conditions to meet that requirement.

12:24First it must be a building or units intended for rental use, which the term has been kind

12:33of floated around of purpose built rental.

12:37Second the qualifying building must contain four or more rental residential units.

12:44And to meet the 25% reduction, which is what our clients are seeking, the units in question

12:50have to have three or more bedrooms.

12:55So looking at page eight of our written materials are the building plans for the townhomes.

13:06It clearly shows six contiguous units within a building.

13:12So because there's six units, it meets the requirements of four or more units.

13:18Now of the six units, one of those units has three bedrooms and the other five have four

13:27bedrooms.

13:28So these are rental units that have a minimum of three bedrooms and the majority five have

13:35four bedrooms.

13:38Now the last requirement is the concept of intended for rental use or purpose built rental.

13:48There is no definition in the development charges act to clarify what this means.

13:57All we have are those words and the context.

14:01And this is where my friends, city solicitor, Ms. Thornton and I have disagreed leading

14:07up to this hearing.

14:11So on the focus of purpose built rental, just firstly, I know Ms. Thornton is going to bring

14:18up the survey or letter that was included in our clients' severance application to

14:26split this property up.

14:29And that survey or letter says that the owner's intention was to sell the individual lots.

14:36Now I work with the survey who created that letter a lot and I know he sends a lot of

14:43these letters in to many municipalities across Ontario and I think a bit too much weight

14:50has been placed on those words.

14:52It is typically the case that owners seek severances to be able to sell, but our client's

14:59situation is not typical.

15:01They sought the severance so that their six townhomes could easily meet the zoning requirements

15:08that were in place at the time of their development and also so that they could have six separate

15:15electrical service connections because I understand that electric utilities doesn't permit more

15:21than one electrical connection to any one property.

15:25So they would have had to get a transformer which was, I understand, cost prohibitive

15:30but out of my element to understand.

15:34So notwithstanding that aspect, there's three big pieces of evidence.

15:39I have, in addition to the fact that our office has worked with sprues now on I think six

15:47or seven projects that they have on the go that are all intended to be rentals.

15:53But the first piece of information is that our clients did not enroll this project in

15:57Tarion.

15:59So Tarion is a creature of the New Home Warranties Plan Act and it requires, in order to sell

16:08new units in Ontario, new residential units, the project must be enrolled in Tarion.

16:14So they did not enroll in Tarion which means they are legally prevented from selling units

16:19until their rentals and unless their rentals.

16:23Secondly our clients have been approved for CMHC financing, so Canadian Municipal Housing

16:31Corporation financing and this is through the CMHC's MLI Select Program.

16:39Now this program is only available for rental developments.

16:44So CMHC has approved and confirmed that our clients project here in their eyes is a rental

16:51development and our clients are in the process of finalizing that, we're working on the conditions

16:58now, finalizing that financing which is a long term take out financing with, I think

17:03it's a 40 year amortization period that was in place to incentivize and help developers

17:12create and establish long term rentals.

17:17The last piece and I suspect I'm getting close to my 10 minutes.

17:22Last piece is that our office through working with our clients introduced the concept of

17:30an agreement being entered into between our clients and the City of Guelph.

17:35This agreement would prevent our clients from selling any of the units unless they paid

17:44the 25% savings that they would have plus interest at whatever time they would want

17:51to sell.

17:53This is an agreement that would be registered on title to the property and would prevent

17:59our clients from selling without the City's involvement, surely by the land registry office

18:05seeing that notice and not permitting a transfer until our clients have satisfied the City's

18:13conditions in that agreement.

18:16So this would give the City assurances that if our client was wanting to sell they would

18:21first have to come to the City to pay the development charges that they are hopefully

18:28saving today, the 25% plus interest at an inflation factor that can be arranged in the

18:35agreement.

18:36This isn't a new concept for our office.

18:39We have created an agreement for a similar situation in the City of Waterloo for a condominium

18:46development that had essentially the same complaint.

18:50They were considered there was a question or purpose-built rentals because it was a condo

18:55and the City agreed with us and we created an agreement that's been registered on title.

19:04That's the extent of our submissions right now and I'll await questioning.

19:08Thank you.

19:11Great.

19:12Thank you very much.

19:15Are there any follow-up questions at this time?

19:17Sure.

19:18I'll start with, I saw a few hands.

19:20I'll start with Downer and then Koran and I saw and then yeah, let's just go with those

19:27two and I'll get to the other ones in a minute.

19:30Thank you.

19:31Through you, Mayor Guthrie.

19:32Can you tell me, one of the things you said why you did the separate rents was for the

19:36six townhomes was to meet zoning requirements.

19:40What zoning requirements were, well you did it because for the electrical hookups, what

19:46you said, one of the reasons was to meet zoning requirements.

19:51What zoning requirements would have been required for the six townhouses?

19:59So without the severance, the property would have been considered one whole property which

20:08means that the development would have been subject to the zoning bylaw requirements imposed

20:16for that area and I don't have the exact zoning provision from me but it was one of the basic

20:26residential zones which would mean that six units were more than what were permitted.

20:32I think it was three or something.

20:36In order for them to meet what they wanted to build, the six townhomes and the detached,

20:43they would have had to go through the zoning bylaw amendment to permit that and it was

20:46number of units and I admit I'm not a planning lawyer or a planner so I don't have the proper

20:52vernacular but it was to do with the number of units that they were trying to build on

20:57the property.

20:58Oh, okay because I thought we zoned that for at least six but anyway, it doesn't matter.

21:05I think there's changes being implemented this year that were not available at the time.

21:12Okay, thank you.

21:15Thank you.

21:16Corrine and then Busetil.

21:17Yeah, have you determined what the rental rate is going to be?

21:24Are these affordable rentals and whether or not they've been advertised for rent at this

21:29time and what the rental rate is?

21:36So I don't believe these 300 Water Street is not designated affordable rentals.

21:48And I don't think through the CMHC program this one, it's not to do it, it doesn't have

21:55affordability metrics but I do know that they have, last time I talked to our clients,

22:03they have four out of the six units signed up for rentals when our clients get occupancy

22:11in hopefully a month or two.

22:18And thank you.

22:19Busetil then alt.

22:22Thank you for the presentation.

22:23I had a question about Tarion.

22:25In your presentation you said not registered therefore right now.

22:31Is this something that can be done at a later date?

22:38Or theoretically it could.

22:42I'm trying to think, I don't think I have come across a situation where I've seen it.

22:53Yeah, so the Ontario New Home Warranties Plan Act, technically it requires prior to construction

23:02for projects to be enrolled with Tarion.

23:05So you would be initially breaching that obligation if you enrolled after the fact.

23:14But I do know some people who have enrolled a month or two after they start a construction.

23:21So it is theoretically possible.

23:27I don't believe Mezcon construction who built the units are a Tarion registered builder.

23:38Or HCRA and Tarion Registries which is even a step before the project could be enrolled.

23:45So there would be a lot for them to do to enroll.

23:49But yes, theoretically possible but not planned.

23:55Thank you for that.

23:56I'm so a bit murky on that because my understanding is that some of the rental buildings when

24:01they change ownership there's an opportunity.

24:03But perhaps that's something to explore further.

24:06The other thing is you mentioned about the CMHC financing.

24:10Can you speak a little bit more about that?

24:15Sure.

24:16So the CMHC financing, so there's a few programs that are available.

24:22Our clients went through the MLI select program which is essentially it provides developers

24:31with traditional financing through a bank that's secured by CMHC.

24:41So the bank, what results is the CMHC provides a lower interest rate than what developers

24:51would see going through the normal means such as traditional Schedule 1 banks or private

25:00financing.

25:01The interest rates are far more favorable.

25:03But in order for CMHC to agree there has to be a lot of conditions met.

25:10And for MLI select it's a point based system where you get more points for I think green

25:20building or greener buildings, so better built buildings and other aspects like that.

25:29But one of the requirements under this program, a hard stop requirement is that the property

25:34be a rental property.

25:38So it's not available to builders who are intending to sell.

25:43The financing terms prevent a sale of the property essentially.

25:50It locks it in as rentals.

25:52Thank you.

25:53I should have been a little bit clearer.

25:54How long is that lock in?

25:57So right.

25:58So it is considered a traditional mortgage in Ontario, so it's subject to the five-year

26:06renewals.

26:08So the initial term of the mortgage is five years.

26:13The amortization is set out so it's a more prolonged investment.

26:19So the amortization schedule is about a 40-year term.

26:24But just like normal mortgages the initial term is five years before renewal.

26:30Thank you.

26:31That's all.

26:34Thank you, Mayor.

26:35Thank you.

26:36Thank you very much, Mayor Guthrie.

26:38Through you to Mr. Black.

26:41Mr. Black, thanks for presenting.

26:43I think my question is simple.

26:47What I think I'm hearing you state is that staff has interpreted an intention or a purpose

26:55as a consequence of what was on a surveyors statement and because of an electros requirement

27:03for a hookup.

27:04Is that correct?

27:08So the electra hookup is my point, which was one of the reasons why our clients sought

27:17the severance.

27:21The point of, and through my conversations with Ms. Thornton, is that the start of the

27:28application process for our client severance for Water Street contains a cover letter by

27:35the surveyor.

27:36And in that cover letter it said the intention of the owner was to sell the units, which

27:42I think has been too much focus on that wording because it is kind of a boilerplate cover

27:49letter that's used a lot.

27:53It does get modified.

27:55But again, the intention for our client to do the severance was to meet with the zoning

28:02bylaws at the time and the service connections that electra have.

28:08So the cover letter was actually in error when it was sent out is what I'm understanding

28:13from you?

28:14Yes.

28:15So, yeah, and I've actually seen they've corrected.

28:21There's been, I think, three cover letters since for our client provided to the Committee

28:27of Adjustment for Guelph from Jeff Buesman and that statement has been removed.

28:35And so it's correct now.

28:37But yeah, I think at the time it was miscommunication.

28:42So just to clarify, it has been removed but was not clarified.

28:50So these new letters are for separate properties?

28:54Got you.

28:55Yeah.

28:57The next question, I believe that I heard you also state that if in fact there ever

29:01was in the future a sale of these properties that that 58,000 approximately would be paid

29:10back if that ever arose.

29:12Is that correct?

29:14It's correct only if the city agrees with us to enter into this agreement.

29:21I think, and that's one thing that we were kind of promoting as a gesture of intent and

29:29goodwill because it's our interpretation of Development Charges Act does not require any

29:36sort of agreement.

29:37I think that in this case, if we push this to the tribunal, we could be successful without

29:43having to meet that agreement.

29:46But I think that agreement provides the certainty that the city is looking for with this being

29:52a rental.

29:53And it's, I think, a happy medium between the two parties.

29:57Yeah.

29:58Okay.

29:59And the last point, just clarification for me because you've provided us with a lot of

30:03information.

30:04What I understand from everything that I've heard, there is no intent to register this

30:09as condo with Terri and or anywhere else.

30:12Correct.

30:14This property is not a condo.

30:18Thank you.

30:19Thank you.

30:20Thank you, Councillor O'Rourke and then Billings.

30:24Thank you, Mayor Guthrie.

30:25Through you to Mr. Black.

30:27I'm just wondering if you've submitted any documentation of your commitment with CMHC

30:32to the city?

30:37I have not submitted.

30:41I know documentation is available.

30:47I'm not as much involved in the actual, it's the brokers who have been arranging, but I

30:53have seen through a few of their other projects that there are documents.

30:57And this, there would be at the time for Water Street right now at the very least a signed

31:02commitment letter between CMHC and 300 Water Street Inc.

31:07But I did not include that in the materials now.

31:10Okay.

31:11So it's understandable that at the time of the issuance of the building permit, there's

31:15no, there's no evidence of, I take you at your word and I'm impressed with the, what

31:21was submitted.

31:22But there's not been any documentation of the commitment with CMHC.

31:26And I'm curious just based on the document that you provided, this MLI select is based

31:32on a couple of points, affordability, energy efficiency and accessibility.

31:39The number of points trigger the conditions of the agreement.

31:47So I'm just wondering what was the level, the curiosity and you can tell me the pounce

31:52all, what was the level of subsidy?

31:57I, so there is no, there's no, there's no subsidy in these financing arrangements.

32:05CMHC provides a mortgage with favorable interest rates.

32:12And I think, I haven't seen the numbers for Water Street, but other projects I've seen,

32:18it's an interest rate closer to around 5%, which is far less than, not that far less

32:25than, but it's lower than prime right now.

32:28So the CMHC provides the, again, the incentive through lower interest rates and they also

32:35provide construction financing.

32:37And then after construction, it's take out financing for the long term.

32:41Right, but I thought I heard you say that that interest rate was determined based on

32:48the criteria.

32:50And the criteria in the document you provided is about affordability or energy efficiency

32:55or accessibility.

32:56And so I'm curious, what are the features here that are driving, I don't need to know

33:03the interest rate.

33:07So, sorry, you're asking what the development, what the townhomes at 300 Water Street, what

33:14level they've met under the CMHC program?

33:19I don't have that information.

33:25Yeah, I don't have that information, sorry.

33:30Okay.

33:31And then it's a similar question to the piece around CMHC, but what's the evidence of single

33:40ownership of all of the units?

33:42So under like one administration and that intent to create long term rental?

33:48So, well, so actually that's a good point, I really should have explained that prior.

33:56The property right now, it's split into, the townhomes are split into six separate lots,

34:02but all the lots are owned by 300 Water Street.

34:06There's no other owner right now and there's not intended to be and the CMHC mortgage will

34:15be registered on all six under the name of 300 Water Street being the borrower.

34:21Okay.

34:23That's helpful.

34:24Thank you.

34:25Thank you.

34:26Billings then downer.

34:27So, through you, Mr. Mayor, you mentioned there was a similar issue in Waterloo, it

34:35was a condo building, and that you had a similar agreement, perhaps similar.

34:41So what you're proposing with before us is the owner confirms the property is a purpose

34:47built rental and agrees to keep the property as a rental for a minimum of 10 years.

34:53Was the Waterloo agreement longer for than the 10 years or basically identical to what

34:59you're proposing that's in front of us?

35:03Yeah.

35:04Thank you.

35:05Thank you for that question.

35:07The Waterloo situation was a condominium building.

35:14So it was developed and built out, excuse me, and registered as a condo, which meant

35:20that and I think it was 200 units.

35:23It meant that technically each of those 200 units was capable of being sold off separately,

35:30but in that situation, the developer intended to retain all of the units and keep it as

35:39a rental building.

35:41There's various reasons why we have a lot of clients who actually develop as a condo

35:47to then keep it as rentals, but so the intention again was there was the owner remain the same.

35:53They were willing, they wanted to keep it as rentals.

35:56They didn't want to sell it, so they wanted the reduction in development charges just

36:00like here.

36:02So the similarity is that the just like just in the condo perspective where you can legally

36:08separately convey condo units here because there's a severance, you can legally separately

36:14convey townhome unit.

36:18The term in that agreement, I think they ended up, it was either 15 or 20 years and I know

36:28the materials I submitted said 10 and I actually just cut off the phone with Andrew Arcley prior

36:35to this hearing and he was suggesting that they don't care what the term length is in

36:40the agreement with the city, they're fine with 20.

36:44Their intention is to rent, so it's no effect for them what the term length is.

36:49So then would they be saying then even up to the 40 years because you mentioned twice

36:55now this evening that the amortization is over 40 years.

37:00So would they care whether it was stated 40 years in the agreement?

37:08Again I don't, based on my conversations I don't think so.

37:13Because the intention of that agreement is that if at the time they want to sell for

37:20whatever reason they would be paying the development charges set today that they should have paid

37:27plus an inflation factor.

37:28Again, that's not their intention.

37:31I mean 40 years is a long time but I don't see that being, like if that's the one aspect

37:39that makes that agreement I don't think it's going to ruin the deal there.

37:44Okay, last question on the reason why I was asking about the Waterloo agreement.

37:51If it's the same or very similar to this one because when it comes to registering something

37:58on title there's rules as to what they will accept to be registered or not.

38:04So what you're saying is for sure 100% you know what you put in front of us that can

38:10be registered on title.

38:12Yeah it's an agreement registered under I believe it's section 118 of the Land Titles

38:18Act which was done in the situation for Waterloo and there's no reason that it cannot be done

38:26here either.

38:28It's the agreement gets registered on title to the properties.

38:34It's set out as a notice.

38:35The agreement would be shown on title which would show any person searching title that

38:40that agreement exists.

38:42Okay, thank you for your help.

38:46Thank you.

38:47Okay, we've got only a couple more here.

38:50Downer is just going to come back and then Klassen, Karlie do you have, no, okay so just

38:55downer and then myself.

38:58Thank you.

38:59Through you Mr. Mayor.

39:00So I'm just sort of not understanding completely this CMHC mortgage.

39:06If Spruce Living decided in a couple of years to do that are they committed to having that

39:19mortgage with CMHC now once they enter into that or could they go into another mortgage

39:25and not have to keep the rental agreement with CMHC, that they have with CMHC.

39:33So they could then at that point, what I'm wondering if at that point say in three years

39:37they decide, I don't know maybe they want to dissolve their company.

39:40I don't know whatever they want to do.

39:42But what if they decided to sell a couple of those units because they could because they're

39:48separate.

39:52What would stopping them then from selling it to somebody else under the condition saying

39:58that it was rental but having a mortgage with somebody else.

40:01So I'm just wondering what are those conditions with CMHC?

40:06Yes, so while the CMHC mortgage is registered on title, the owner will not be able to sell

40:17the property.

40:19That would for the CMHC mortgage to exist on title at the time of property transfer,

40:25the buyer would have to assume that mortgage and the lender CMHC would have to approve

40:32of that assumption and that's not in the terms for that to happen.

40:39It's theoretically possible for Spruce to get out of the mortgage prior to the even

40:45within the next five years.

40:50Just like I don't think there's really anything that can be registered in a mortgage that

40:55would actually prevent that.

40:57It would just be the amount of default and penalties in a mortgage situation.

41:04And that was another thing that I just spoke to Andrew prior to this hearing today.

41:08He said that the penalties and interest that they have to pay if they wanted to get out

41:13of the CMHC is staggeringly high, that it does not make sense for their margins.

41:20So there's nothing barring economics and breaching the mortgage.

41:27They can't be prevented from getting out of it but it doesn't make sense economically

41:33if that makes sense.

41:35Okay.

41:36Yeah, so I just wondered if there was any sort of if individual units could be sold at some

41:44time.

41:46So that's a beyond a five-year mortgage then with CMHC?

41:50So the intention is that it's going to be beyond five years.

41:54It follows the same mortgage setup in Ontario that mortgages come up for renewal every five

42:01years so then you renew for another five years and another five years.

42:05The intention is that it's going to be longer than that for sure.

42:14Just go back to Councillor O'Rourke before I go.

42:16So Councillor O'Rourke, please.

42:18Thank you, my duthrie.

42:19Through you to Mr. Black.

42:20Just a quick question.

42:21I took a peek at the Spruce Living website.

42:24Is the expectation that these units will all be leased by this September?

42:30That's the hope.

42:32Yeah.

42:33They want, yeah.

42:36Yeah, yeah.

42:38I mean, essentially for all their projects, they want to have leases lined up the second

42:44they get occupancy for all their projects.

42:47And I think, yeah, actually Water Street, their forecast is that occupancy certificates

42:52are going to be available September 1st is what their goal is.

42:55So they want to be fully leased by then.

42:58And did you say there are rental agreements already in place?

43:02They have arrangements with tenants that they are going to be renting.

43:11The tenancy term will start when they get the occupancy in September.

43:15They have, when I spoke, they had four out of the six and that was a few days ago, so

43:20I don't know if they have the other two.

43:22Okay, thanks.

43:24And I'm sorry, I just need to go back to Billings one more time and then over to me.

43:29I apologize.

43:30I just forgot.

43:32And I just want to confirm that, for example, after this evening, if it ended up not being

43:41favorable to you, then is your next step?

43:44Not that you will, but you could go to the OLT with this matter.

43:51Correct.

43:52Yeah, the dispute process under section 20 Development Charges Act allows us to appeal

43:59the council's decision today to the tribunal.

44:02Okay, thank you.

44:07Okay, now you get me.

44:10So I want to try to help me focus and filter down to really the nuts and bolts, okay?

44:19So I'm going back to the three positions or the three tests that have to be met, which

44:28is basically the basis of your complaint, okay?

44:33So would I be correct in your assertion that it doesn't really matter what mortgage was

44:40coming from anywhere if I'm looking at the three tests?

44:47That's correct.

44:48Okay, perfect.

44:50Because here's my first question, I want to go one by one.

44:54So the first one is, a Development Charge for Residential Unit intended for use as

44:59a rented residential premise with three or more bedrooms.

45:06You meet that test.

45:07That's what your assertion is?

45:09Correct.

45:10And based on that, is there a disagreement with the city on that one?

45:14Not that I'm aware of.

45:15Okay, that's fine.

45:16We'll get to that, I'm sure, but I'll ask the same questions here.

45:20So number one, as you understand, you're meeting it and there's no real contest there.

45:26Okay.

45:27And number two, let's move to number two.

45:29A Development Charge for Residential Unit intended for the use as a rented residential

45:34premises with two or more bedrooms shall be reduced.

45:38You're saying you meet that one too?

45:40Yes, so that condition, so the Development Charges Act there is a scale of percentages

45:47based on number of bedrooms.

45:50So these 300 Water Street doesn't have any two bedrooms?

45:55Okay, because I see number two is the 20%.

45:58I'm sorry, but so if we go back to number one, that's the 25% threshold because you

46:02meet that threshold and that's your assertion that you meet it and that would equal the

46:0625%.

46:07Correct.

46:08Okay.

46:09Okay.

46:10Okay.

46:11So then your perspective of, and it also meets Canadian mortgage housing, special deals

46:17with stuff is really a separate issue.

46:22It's good to know, that's your position, it's good to know because it kind of validates

46:26that it's going to be rental because you couldn't have met the criteria to get that

46:31special rate if it wasn't rental.

46:32So that's what you're trying to present.

46:35Essentially, yeah.

46:36The issue is that the Ontario government and the release of the legislation didn't clearly

46:40define what a purpose-built rental is.

46:43So the CMHC mortgage, the Tarion enrollment, this agreement, they're all evidence that

46:50we're providing to show our clients intention to rent.

46:52Yeah.

46:53Okay.

46:54Okay.

46:55Now you mentioned in your opening remarks before we got into questions that there was

46:58maybe one and maybe there's a few we'll hear from Alison in a second, but where there

47:03is some conflict or friction on, I thought I heard you say on one kind of point.

47:08Can you explain that a bit for us?

47:10Yeah.

47:11So our conversations leading up to today, all that I'm aware of is the city staff having

47:18agreed that this project is a purpose-built rental meeting the definition in their eye,

47:24in the city staff's eyes.

47:26And because there's no actual definition, we're reading in what, you know, intended

47:32rental use means.

47:35City staff's initial letter to us said that any condo wouldn't meet that condition and

47:41by the same logic, any property capable of separate conveyance like this doesn't meet

47:45that definition.

47:47But we don't have anything to go off of to confirm that from the Ontario government that

47:53I'm aware of.

47:55Okay.

47:58And so my last question is more based on the history of your clients.

48:06You mentioned they've been guelphites for a long time.

48:08They're developers for a long time that make this type of a product.

48:13Has there been anything from your perspective through your clients to you to send us where

48:21you feel representing them that there is anything untowards here where they are going to all

48:27of a sudden flip this, turn into a condo and sell?

48:32I mean, the fact that you're coming up with this other agreement option is sort of, I

48:36think, a side thing, not really based on the development charges complaint that we're talking

48:42about.

48:43But you feel confident that not only does it meet the 25% reduction, but the fact that

48:49there's the confidence in your clients to adhere to what they're saying out loud in

48:55the community that they live in.

48:57Yeah.

48:58I really do.

48:59And I think that's one reason why I feel so passionate about this situation is because

49:06there's all sorts of types of developers in this world.

49:09And we see all sorts of clients come through our office.

49:14And I've really grown a great relationship with Spruce, with Andrew and Zach, because

49:21I think they're legitimate and they mean what they say.

49:25And as I said earlier, I have seen through our office working with them at least six

49:31projects now that are on the go through various stages.

49:35And they are really trying to develop the exact same model for all so that they can keep doing

49:41what they're doing.

49:42And that is building what they know how to build, which is detached semis or towns, and

49:49then renting them out.

49:51That is all that I've seen.

49:53There's never even been talk of selling.

49:55Okay.

49:56Well, thank you very much.

49:59And there's no further questions.

50:00And I think all of us here asked a lot of clarity questions.

50:05So we appreciate your answers.

50:07And at this time, we'll move it over to the respondent, which is the city, and give Alison

50:14the ability now to make that presentation to us.

50:16And thank you very much.

50:17Thank you.

50:23Thank you, Mr. Mayor.

50:25Members of council, I am here before you today representing this position of city staff and

50:31particular finance department to address this complaint, which is effectively arguing that

50:38a $57,000 subsidy for purpose built rental housing should have been offered and was not.

50:46I thought I was going to be able to tell you that tonight there would be no math, but I've

50:51been corrected.

50:54If you are inclined to agree with Mr. Black's position in principle, there is a calculation

51:02error.

51:03The city's portion of development charges is not the full amount that's stated in the

51:09complaint.

51:11But and I'll just get the number.

51:13It's 211,506.

51:17So if the 25% is found by this council as a matter of statutory interpretation to be

51:23applicable, it should be 25% of that 211,506, which is sorry, I have been provided with

51:34this number.

51:35It's in the range of 52,057.

51:40I will get you that exact number.

51:42So please do note that because there is no provision anywhere for us to be also providing

51:48back the education component.

51:51That's not eligible for these discounts.

51:55With that said, I do want to move to the main substance of my submissions.

52:00This is a statutory interpretation question.

52:04This particular building permit was issued prior to your most recent development charge

52:11bylaw, but I will come to our most recent development charge bylaw because this issue

52:15did come up in January and it was presented in a staff report.

52:21But the question today is whether the act and its definitions intend purpose-built rentals

52:29or just rentals because what's happened here is six separate lots have been created.

52:36And yes, we do look at Mr. Buseman's letter, which was sent to a decision-making authority

52:43on behalf of the owner, so we look at it.

52:46But it's not just the letter, but the outcome.

52:49What we're dealing with here is we have six units separately conveyable as of right.

52:57And then the question is, should we confine the applicability of this, what is a taxpayer

53:05funded subsidy?

53:08Because our development charges are based on our calculation of what these units are

53:12going to cost to service.

53:15So do we apply this provincial government-imposed subsidy to all potential rental for whatever

53:24period of time based on I intend to rent?

53:29Or do we apply it only as we have in the current bylaw, which is for a building on a lot?

53:38And why did we recommend to this council and why did this council endorse in the current

53:43form of bylaw a building on a lot, not on six lots?

53:49That's because in our official plan we have condominium control provisions.

53:54So the commitment we don't need to register an agreement on title.

53:58We are entitled to restrict conversions from a condominium property, a property on one

54:06lot or to a condominium property from a rental unit.

54:11If this is built on one lot, if instead of going to the committee of adjustment to sever,

54:16the owners had decided to come to this council and ask for a zoning change and they had built

54:22one building on one lot, then we would have that security of our official plan condominium

54:30conversion provisions.

54:32We would have the assurance that for an indefinite period we would have rental housing stock.

54:39And only if those condominium conversion policies were satisfied would those units be sold.

54:46Because it is, they have now created in-law six separately conveyable units.

54:54Whatever assurances are provided and we're not here to judge the individuals behind the

55:01project but we are making an interpretation of a statute.

55:07And if we, if council today says that for six lots that happen to have party walls,

55:18we are prepared to apply a taxpayer funded subsidy then we will as a city have to take

55:29everyone's word for it and basically 25% of every multiple unit development we won't

55:38be able to distinguish.

55:40The distinction we have drawn, we recommended back in January is this is intended to apply

55:47to one building on one lot so that we have those condominium conversion protections.

55:54If we, if we just enter into what's been proposed as a 10, it was proposed, what I prepared

56:00for today was the proposal was a 10-year commitment.

56:05Now I'm hearing it floated, well maybe it's a 40-year commitment.

56:09Mr. Mayor and Council, the administrative burden on your staff, we have to, for every

56:15condominium building, so we have 120 lots in a building, we have to be separately monitoring

56:22120 different ownership units over a period of 40 years.

56:28That is not the intention.

56:30The intention is that this thing is supposed to operate itself.

56:36In our submission, and this is what staff recommended to you when we decided how do

56:41we implement Bill 23 in our by-law, what we said was a building on a lot so that we have

56:48the protection of condominium conversion.

56:51And the term purpose-built rental is applied.

56:55It is a building on a lot.

56:57I know that it isn't the term in the statute itself, but I did provide you in the brief

57:04and if you want to look at it and assure yourself it's at tab 12.

57:09Minister Clark, who was the Minister of Municipal Affairs and Housing at the time that Bill

57:1523 was passed, referred to purpose-built rental.

57:20And he talks about the further incentive to build that type of rental housing.

57:26So it's not just any rental housing, it is purpose-built rental housing that we have

57:31that long-term assurance, that we don't have to enter into agreements on title of every

57:37single ownership unit in order to assure that we are building these.

57:45Perhaps there has been some regret on the part of these owners that they went with the

57:50severance option as opposed to the rezoning option, but this is a precedent setting case.

57:56If in this situation where an owner came to or an owner's agent went to our committee

58:02of adjustment and said, we want to create six units for individual sale, we nevertheless

58:08look past that and we say you qualify for this taxpayer-funded rental subsidy, then

58:16we are offering 25% to every multiple unit building in the city, regardless of the underlying

58:25tenancy or manner in which it's built.

58:30So we are going to be imposing, if we go the agreement route, we're imposing an administrative

58:37burden and as Mr. Black has suggested, if you read the statute to not require that it

58:45be a building on a lot, all we can do is rely on someone say so.

58:51I don't want to cast dispersion because there may have been a legitimate change of heart,

58:57but in August of 2023, the committee of adjustment of the city of Guelph was asked to create six

59:03separate ownership units.

59:05That's what we have as staff to work with and that's why we applied the interpretation

59:11we did.

59:13So I think that basically sums up my position.

59:16In January, we recommended to you a new form of bylaw where we implemented based on one

59:22building on a lot.

59:24We believe that that's a faithful interpretation of legislative intent and whether or not that

59:31particular bylaw applies in this case, we still take the same interpretation.

59:36This is purpose-built rental, not just anything that someone says I am willing to rent out.

59:43And we don't have to inquire into their other financing obligations.

59:47I don't know if the CMHC mortgage could pay off in five years if there's enough money

59:51to do it, but that's not our concern.

59:53It's a statutory interpretation question.

59:56Our six ownership lots eligible for this discount or not.

1:00:00So with that, I will take your questions.

1:00:03Thank you.

1:00:04Thank you, Alison.

1:00:05Councillor Allt, please.

1:00:07Thank you very much, Mayor Guthrie.

1:00:09Through you to staff, to Ms. Thornton.

1:00:13I think I have a couple of questions.

1:00:16The first one might be longer.

1:00:20You started off, you clarified what was the first question, that this is clearly a precedent

1:00:25moving forward in my understanding, and that we must be attentive to the precedent, especially

1:00:33in consideration of the statute that the statute that we're looking at.

1:00:40I think I also heard you say that essentially if we were to do this, we would be seeing

1:00:46essentially our goalposts shifting for virtually every purpose-built rental moving forward

1:00:54that what is important to us is the long-term usage.

1:01:00Is that correct?

1:01:02Through you, Mr. Mayor, to Councillor Allt, yes it is.

1:01:05If we determine today that this is supposed to be applied to every situation where there's

1:01:13a shared wall on six separate lots, then we have moved the goalposts significantly.

1:01:21You've also said that our own by-law, which was never appealed, is not valid.

1:01:26Okay, that's fairly important.

1:01:28You say it was never appealed.

1:01:30Can you please explain the significance of that?

1:01:34Yes, through you, Mr. Mayor, to Councillor Allt.

1:01:37So in this city's interpretation of Bill 23, it was implemented through the current by-law,

1:01:46which is in your material.

1:01:48It's actually got a bunch of parts because we have a parent and a child by-law, but it's

1:01:52starting at, it's at tab four.

1:01:56We have interpreted in our by-law that rental housing, the rental housing discount applies

1:02:03only to a building on a lot, and that's in our definition section.

1:02:08And so that was up for, it was passed on January the 16th.

1:02:13It was posted.

1:02:15It was up for appeal for a period of 40 days.

1:02:18That appeal period has long lapsed and that by-law is now in effect.

1:02:22So yeah, there was an opportunity for anyone who thought that interpretation was wrong

1:02:27to have appealed it.

1:02:29It wasn't.

1:02:30So now we're into a question of interpretation.

1:02:33And what we're saying today is, did we get it wrong?

1:02:35Are we just going to tell the public we thought we got it wrong and that that's not valid,

1:02:39even though it wasn't appealed?

1:02:40Okay, thank you.

1:02:42That leads to the next question.

1:02:43What I'm also hearing from you is that if in fact we were to grant this appeal, moving

1:02:50forward, the potential for this to become onerous with appeals is significant.

1:02:57Am I interpreting that correctly?

1:02:59Through you, Mr. Mayor to Councillor All.

1:03:01Yes.

1:03:02I guess the, well it will either become expensive or onerous or both.

1:03:06So if we do, if we go over the route of trying to secure the commitment by agreements registered

1:03:16on each property and that would be six registrations, we then have to do that for every condo.

1:03:22So we have to do 120 registrations.

1:03:25A section 118 of the Land Titles Act means that every time it gets refinanced, the city

1:03:31realty department has to approve or not approve.

1:03:34So that's for, that will be for potentially hundreds of units within the city.

1:03:40Thank you.

1:03:41That certainly does sound onerous to me.

1:03:44The simple question, it was mentioned by the, by the appellant that there was a potential

1:03:53to pay Expo's facto this $52,000.

1:03:58I was wondering if I could get a comment from you on that please.

1:04:01Through you, Mr. Mayor to Councillor All.

1:04:03So the $52,000, I gather that that's an allusion to the form of agreement.

1:04:12So the potential, I think what was, what was present provided in the material would be

1:04:17over the 10 year period, if at some point someone decided it was in their better interest

1:04:21to sell it, they would refund us that money.

1:04:24So we'd have to be monitoring.

1:04:26If we do this on an ongoing basis, we'd have to be monitoring those amounts that were not

1:04:31paid that would otherwise have been paid.

1:04:34And does somebody at some point in the future decide actually I'll make enough profit to

1:04:39pay the city back.

1:04:40So we're, we are talking about a pretty significant ongoing administrative burden if we don't

1:04:45stick with our current interpretation.

1:04:47So you're suggesting that the potential exists for us to be actually monitoring real estate

1:04:51sales into the future?

1:04:54Through you, Mr. Mayor to Councillor All, that would be inevitable if we go the agreement

1:04:59where we would have to the form of restriction of section 118 of the land titles would require

1:05:08that we be involved in every single transaction on every single unit.

1:05:11Thank you.

1:05:14Any further questions?

1:05:15Okay.

1:05:16Councillor Katelyn, please.

1:05:17Thank you.

1:05:18Through you to staff.

1:05:20Is there any availability for the developers to kind of undo what they've done in terms

1:05:25of the unparsaling so that they do meet the qualifications for the land style that we

1:05:31would need and then it would not end up being a precedent?

1:05:37Through you, Mr. Mayor to Councillor Katelyn.

1:05:40Theoretically, yes, there is a provision.

1:05:43I understand there would probably have require some zoning bylaw amendment if you but if

1:05:48you were if you were earnest in saying I want to create a rental, a single rental building

1:05:54on a lot, there are means by which you can uncover.

1:05:59There are applications you could go through.

1:06:01Thank you very much.

1:06:06Thank you.

1:06:07Okay.

1:06:08I guess I just have a few questions then.

1:06:15I guess my I'm trying to understand.

1:06:19I'm trying to kind of put blinders on, I guess, if that's the best way of describing it, that

1:06:23your argument seems to be like if this thing happens here, it means forever and ever we'll

1:06:29have administrative burdens on all this other stuff and it will be onerous and all this

1:06:32kind of stuff.

1:06:34But I'm trying to make the decision based on the complaint on this particular issue right

1:06:39here.

1:06:40So I'm not dismiss some of the argument that you're making, but I'm trying to just be focused

1:06:45on whether this meets the test of the complaint and what's happening here.

1:06:52So can you please try to describe to me if your point is one building, one lot, I think

1:07:05that's where you were trying to get at from your original point of view.

1:07:11Would they have been eligible to make a submission like they are today to receive a 25% reduction

1:07:18if they did six of them, if they were all under different entities?

1:07:23Two and three, Mr. Mayor, just I'm not I'm not I'm not clear what your question is.

1:07:33Sure, I'll try again.

1:07:35Thank you.

1:07:37What's been described as to us is that you have this one piece of property that was severed,

1:07:45that you have one entity that is owning it all.

1:07:51And so your position, I believe, is that if it was one building on one lot that we could

1:07:58maybe have a discussion here.

1:08:00But because they severed and they have six, even though I think one doesn't apply or whatever,

1:08:06whatever, they severed, your position is then we can't afford this 25% reduction.

1:08:12My question to you then is if each one of those severed parcels was its own entity, like

1:08:20Ontario Limited 300 Water Street point one and Ontario Limited 300 Water Street point

1:08:26two, like separate legal entities, would you agree that the 25% would be applicable to every

1:08:33single one of those severed lots?

1:08:35Okay, so I do understand your question now.

1:08:37Thank you, Mr. Mayor.

1:08:38And the answer is no, because in order to qualify, you have to have at least four units

1:08:46within a building, all of which are rental.

1:08:50So what they have created here is one unit on each lot, and that will not qualify.

1:08:59And that actually is the ongoing administrative burden because they were set up so that they

1:09:04can change hands readily.

1:09:06As opposed to the one building that has a bunch of units in it that would have to go

1:09:11through a condo conversion in order for any of those units to be sold.

1:09:15These are all set up to be readily sold.

1:09:17So the only way to sort of reverse engineer it is through these kinds of agreements, which

1:09:23the act doesn't contemplate.

1:09:25Yeah, and I think I'm trying to put the blinder on this sort of separate, like we'll make

1:09:33an agreement with you over here on this, which is very nice.

1:09:37But again, I'm trying to put the blinders on on exactly what's being discussed here

1:09:41under the complaint.

1:09:42Do you have any commentary back to the Waterloo example?

1:09:49Like if your submission is that this is onerous in its precedent setting and we're going to

1:09:54have to have an administrative burden, could you explain to me then why would Waterloo

1:09:59enter into some sort of agreement?

1:10:01Wouldn't that same arguments probably have been made with that city?

1:10:07Can you explain why would they enter into this agreement to get this done and why do

1:10:12you feel it's so onerous then?

1:10:14So to you and through you, Mr. Mayor, I can only speculate why another municipality might

1:10:18do this.

1:10:20There are two answers to that.

1:10:22One is it's always free to a municipality if you want to incent other rental other than

1:10:29purpose built rental.

1:10:31If you decide that providing that taxpayer funded subsidy is something you want to do,

1:10:36you always can do it.

1:10:37Back in January, you could have done it at any point in the future.

1:10:41You can say, you know what, we want more rental.

1:10:43We don't care if it's long term, maybe 10 years is good enough.

1:10:47You can you can do that.

1:10:49The other thing is, you know, everybody and it was asked of Mr. Black, you know, everybody's

1:10:55a little bit afraid of the OLT.

1:10:58But what I'm going to say in response to that is if you just give it away and we don't fight

1:11:02for it, then we've given it away.

1:11:04Period.

1:11:05I am prepared to fight for it because I do think that the city staff has come up with

1:11:10a reasonable interpretation of the act and its intent, particularly given Minister Clark's

1:11:14statements about purpose built rental as opposed to other kinds of rental.

1:11:18OK, and that it's a good segue.

1:11:21You didn't mean to.

1:11:22But this is my last question.

1:11:23I'm trying to separate based on your response here.

1:11:29You are kind of bringing like up what a politician said in the media versus what does the statute

1:11:36say?

1:11:38So I'm just wondering intent of what a politician says versus what the statute says defined and

1:11:46what's allowable is where I wouldn't mind your response.

1:11:50Because I think that to me is more important.

1:11:53Can you can you try to use?

1:11:57Can you try to can you try to make your argument based on the statute?

1:12:03And not and not sort of what a politician used to used to be a municipal.

1:12:08Although I can say that minister in the past, I can say that answered is admissible.

1:12:13So I and it was made by the minister before the act was enacted.

1:12:17So I do think it informs the intention of the act.

1:12:20Nevertheless, what the statute says literally is rental housing development means a development

1:12:24of a building or structure with four or more residential units, all of which all of which

1:12:29are intended for use as rented residential premises.

1:12:33So it's a building.

1:12:34We have interpreted a building on a lot because we interpret the intention not to be time

1:12:39limited but indefinite, which gives us the condominium conversion protections.

1:12:45There are other sections though.

1:12:46I think it's worth noting, Mr. Mayor, there are other sections of what was enacted through

1:12:52Bill 23 that do actually provide for agreements and provide for a period of time under which

1:12:59those are entered into.

1:13:00So for affordable housing, for example, we're going to be starting as of June the 1st to

1:13:05enter into agreements secured on title for affordable housing that has a 25 year period.

1:13:10So in my in my submission, if the legislature intended for it to be other than purpose built,

1:13:16so any other kinds of rental, they would have had the foresight to say, okay, registered

1:13:22on title for 25 years, for 10 years.

1:13:24They didn't do it.

1:13:26And the reason is that the protection for a building on a lot is the condominium conversion

1:13:32provisions of an official plan.

1:13:34All right.

1:13:35I really appreciate your responses.

1:13:37Thank you very much.

1:13:39All right.

1:13:40That Oh, sorry.

1:13:41Before I go on to the next portion, I'll just end with Councillor Caron.

1:13:45Yeah, one last question just for clarity for me.

1:13:49There is a reduction for two or more units on a lot.

1:13:55Is that correct?

1:13:56I know that we're the one that's being argued here today is four units.

1:14:01But there's also a smaller percentage is it 10 or 15% for a lot that has two or more units.

1:14:09So through you, Mr. Mayor to Councillor Caron, I am going to interpret your question.

1:14:14There are various different exemptions and reductions.

1:14:20I think what you might be referring to, there's a smaller discount, there's a smaller subsidy

1:14:26for a two bedroom.

1:14:28We also have exemptions for our dues, additional dwelling units.

1:14:33So you may also have heard of other situations where development charges are not applicable

1:14:39on additional units within the main house.

1:14:43There are a bunch of these things.

1:14:44I've been dealing with it for about 1820 months of actually more than that almost now, but

1:14:50of interpreting.

1:14:51So there are you might be hearing about different provisions, but this provision in particular

1:14:56differentiates based on bedrooms, not on units.

1:14:59You need to have at least four units within the building to qualify for this particular

1:15:03subsidy.

1:15:04Okay, thanks.

1:15:05Then the reason I ask is we've been talking about these units as if they are one.

1:15:10There's only one unit.

1:15:11It's my understanding and I should have asked the developer at the podium, but it's my understanding

1:15:17that each of these units has a main dwelling unit and an accessory dwelling unit for a total

1:15:22of six bedrooms.

1:15:28Is that your understanding as well?

1:15:32My understanding is two dwelling units, a primary unit and an accessory unit in each

1:15:38of the townhouses.

1:15:43I just, my understanding, I just had some confirmation from staff.

1:15:50There are six town homes, each of which have three or four bedrooms.

1:15:55So they each qualify for the 25, if they qualify, by based on the number of bedrooms, they would

1:16:05qualify for the 25% as opposed to the smaller subsidy that's applicable for units with fewer

1:16:12bedrooms.

1:16:13Basically, I think this is, as Minister Clark said, it was too incent, not only the construction

1:16:20of purpose-built rental, but also purpose-built rental that families could occupy.

1:16:25Okay.

1:16:26I may have been misinformed then.

1:16:28I thought there was an accessory apartment, a two-bedroom accessory apartment in each

1:16:33of these units for a total of six bedrooms.

1:16:37I can follow up with staff.

1:16:39Okay.

1:16:40And Councillor Caron, I think in the process here, Justin Black will be able to have a

1:16:49moment of response as well.

1:16:51So that's part of the process.

1:16:52So the fact that you've asked that question out loud, maybe we'll hear it in a response.

1:16:57So that's good.

1:16:59We can maybe get clarity that way.

1:17:01Just before we go to you, I have one last question from Councillor O'Rourke.

1:17:04Thank you, Mayor Guthrie.

1:17:06Through you to Ms. Thornton.

1:17:08I have a question about page 102 of your submission.

1:17:12Excuse me.

1:17:14Around the Guelph DC bylaw.

1:17:16And so when I was preparing, I was, I got bogged down in what is a building, what is a lot,

1:17:21what is a unit, what is a dwelling?

1:17:24So I need some clarification because the mid part of the page there says Guelph DC bylaw

1:17:312019 defines rental housing development as the residential housing development of a building

1:17:38or structure with four or more dwelling units, all of which are intended for use as rented

1:17:43residential premises.

1:17:45And then it says a dwelling unit is a part of the definition of dwelling unit is a clarification

1:17:52of townhouse, which means a dwelling unit that's within a building that is divided vertically

1:17:57into three or more separate dwelling units.

1:17:59So this is a townhouse complex, right?

1:18:03It's a townhouse complex, but it's on six separate lots now.

1:18:08But then the complicated even more that it says on street townhouse means a townhouse

1:18:13where each dwelling unit is located on a separate lot and has legal frontage on a public street.

1:18:19So, so I think we can agree it's all in a building.

1:18:23And I looked up the Ontario building code.

1:18:24It's not easy to find definition of what a building is.

1:18:27I was trying to get at what is a building, but can you help me parse this out because

1:18:31I am a bit lost in the verbiage here.

1:18:34All right.

1:18:35So through you, Mr. Mayor, to Councillor O'Rourke, I think we have to be a little bit careful

1:18:41about using definitions in the 2019 bylaw because the 2019 bylaw was passed prior to

1:18:48the implementation of these revisions to bill 23.

1:18:54So for purpose, this bylaw did not contemplate this subsidy.

1:18:59This bylaw was passed at a point in time where every, every developed unit would have paid

1:19:05development charges.

1:19:07When so our interpret our statutory interpretation doesn't really show up until the current bylaw

1:19:13because at that point we were implementing the subsidy.

1:19:18These are on street townhouses.

1:19:19They are individual units bought and sold each with its own piece of land.

1:19:27Although they do share pop common walls and yes, there are other definitions for other

1:19:33purposes and other acts because building code deals with very different subject matter than

1:19:39administrating us administering a subsidy.

1:19:44Thank you.

1:19:45Okay.

1:19:46Thank you so much.

1:19:48Thank you.

1:19:49We appreciate it.

1:19:50And now back to we have an opportunity for a response from the complaint.

1:19:57And just so everyone knows, there's no questions here.

1:20:00It's just a, it's just a response.

1:20:02Okay.

1:20:03So we're to listen and, and, you know, make it as distinct as possible, please.

1:20:08And then, and then we will, we will conferred back to make our decision in a minute.

1:20:15Okay.

1:20:16Go ahead.

1:20:17Certainly.

1:20:18I think it's a good back of decorum with through you, Mr. Mayor.

1:20:21I, I live in word documents.

1:20:22So I'm not a, I'm not normally anyway, speaking just quickly to answer counselor's question.

1:20:30So there, the building permits that we're talking about right now are for six above ground

1:20:37units.

1:20:38There's potential for basements in the future.

1:20:42the permits hold here were for six above ground townhome units.

1:20:49And each of those six townhome units has, well,

1:20:52one of them has three bedrooms and the other five have four bedrooms.

1:20:58So, yeah, trying to make my response here sink as possible.

1:21:04Firstly, we, looking at the strict wording of the Development Charges Act,

1:21:10I think it's pretty clear our project, our client's development,

1:21:14meets the requirements, right?

1:21:16There's a building with six units, which is above the four minimum.

1:21:20Each of those have three bedrooms or more, which is the other requirement,

1:21:24and they are intended for use as rental.

1:21:27The intended for use as rental is the contentious point here,

1:21:33where staff disagree with us.

1:21:36I don't see myself what purpose-built rental versus other rental are.

1:21:42I don't know what another rental is if it's not purpose-built.

1:21:48But anyways, there's talk about, so what I'm struggling with the fact is

1:21:57that I really think that looking at the wording of the legislation,

1:22:02that our client's development here clearly meets the requirements,

1:22:07such that we don't have to provide any compromise.

1:22:12We can go to the OLT and get a ruling without this agreement concept.

1:22:17We've introduced this agreement concept as a way to show our intent,

1:22:22our client's intent to keep this as a rental,

1:22:25and a way that provides assurance to the City of Guelph.

1:22:29We talk about this being a precedent-setting situation, and I think it is,

1:22:36but I also think the City of Guelph through Council has the opportunity

1:22:40to make it a strong, favorable precedent for the City.

1:22:45We're here today to deal with rental housing and the promotion of rental housing.

1:22:50Our clients are desperately trying to show you that they are renting out and intend to rent,

1:22:56and they're willing to lock in that commitment,

1:22:59register on title through an agreement for really whatever term council is okay with,

1:23:0610, 20, 10, 20 years.

1:23:09This agreement concept I really think is a favorable solution for both our client and the City,

1:23:19and it's not going to set a dangerous precedent for other projects.

1:23:23I say that because to get to where we are now,

1:23:28you have to first meet the strict wording of the legislation, right?

1:23:33You have to have a building with six or more units that are rented,

1:23:37number of bedrooms, and there has to be the intent to use as rental.

1:23:44Every development in Guelph that goes through a condo process or a severance process

1:23:51is not going to have that intent to rent.

1:23:54So you're faced with a situation only in situations like this,

1:23:59where a developer is bringing forth clear evidence of an intent to rent,

1:24:03and that would be the only instance where an agreement like this would come into play.

1:24:08An agreement like this is not required to be registered on every single condominium,

1:24:13every condo unit registered in the City of Guelph,

1:24:17because 90% of those condo units are intended to be sold to third parties,

1:24:25not retained as a rental.

1:24:27It's only when an owner, landowner, comes to the City and says,

1:24:32I've constructed a purpose-built rental, I am renting it out,

1:24:37I would like the rebate allotted.

1:24:42And again, without this agreement, I think it's an as of right

1:24:47that those developers are going to get this reduction,

1:24:50which brings in a lot of the concerns why we're here today,

1:24:55because the legislation is pretty vague,

1:24:57and that's why I think the agreement protects the City's interests

1:25:02in showing that anyone willing to enter into that agreement

1:25:06shows the intent that they're going to rent.

1:25:08Now, I can appreciate that staff are already overwhelmed with everything else,

1:25:15so the concern of administrative burden is legitimate,

1:25:20but I don't think that there is an administrative burden here,

1:25:25and that's really because of the strict technical nature of this agreement.

1:25:32And I'll try my best here.

1:25:34So it's an agreement between the landowner and the City of Guelph

1:25:39that says essentially owner has received,

1:25:44owner has only paid 75% of the development charges that they should have paid.

1:25:49They saved 25% because it's a rental.

1:25:53If owner wants to sell a unit in the future at some point,

1:25:59they have to pay that 25% plus an inflation factor,

1:26:04probably pursuant to the Consumer Price Index,

1:26:06which is I think what we did for City of Waterloo,

1:26:09and that would be on that day,

1:26:12the owner would have to pay the amounts plus interest,

1:26:16and that agreement gets registered on title,

1:26:20and the City staff don't have to monitor any property.

1:26:26They don't have to monitor any property

1:26:28because the land registry office is monitoring it for you.

1:26:32That agreement is registered on title.

1:26:35The owner cannot do anything with that property

1:26:38until they engage the City of Guelph and say,

1:26:41we want to sell, we got to pay our DCs.

1:26:44The City of Guelph doesn't,

1:26:46aside from, I mean, throwing the signed agreement in some electronic folder,

1:26:53can forget about it until an owner comes knocking and says,

1:26:57I actually want to sell this, I've changed my mind.

1:26:59There's no administrative follow-ups, checks, reviews

1:27:04based on the agreement being registered on title to that property,

1:27:09which is a public record that every landowner and purchaser

1:27:14and anyone pulling title will see that agreement.

1:27:17They'll see it, and I do a lot of commercial transactions.

1:27:21You see a notice like this, and you immediately pull it,

1:27:24you immediately see what the agreement says,

1:27:26and you go, wow, vendor can't sell this to me until they pay the City DCs.

1:27:32Land registry office is going to prevent a transfer from happening.

1:27:38So I really don't see the administrative burden.

1:27:47There's a few other points, and I'll just be brief.

1:27:52A Councillor today brought up the concept of can an owner cancel a consent.

1:27:59And it's funny that this brought up and that I didn't bring it up

1:28:03because that's a planning act aspect, which is where severances come in.

1:28:09And the government actually introduced a new provision under the Planning Act

1:28:14that allows an owner to apply to cancel consents.

1:28:19It doesn't actually merge the properties back together right away,

1:28:23but it cancels the consent such that they can't transfer in the future without approval,

1:28:29and if they own a budding, then it actually does merge right away.

1:28:33Our client, through a separate property,

1:28:38so Spruce, through a separate property in the City of Guelph,

1:28:41they're going to be able to apply to the City of Guelph to get a response

1:28:44from the H City staff asking if they could complete that cancellation.

1:28:49Sorry, I don't have any recourse, so I'm going to rise on a point of order.

1:28:54I don't have any response, and there's stuff that was not in material

1:28:57and that does not arise out of my submissions,

1:29:00and because it's my only recourse, I really apologize to this panel

1:29:05and to Mr. Black for doing it,

1:29:07but I don't have any opportunity to respond to other matters.

1:29:12I'm sort of asking that maybe this is offside.

1:29:17Okay, I'm going to uphold the point of order

1:29:19if you could only do a response and not bring up any new information,

1:29:24but other than what you can wrap up with, I think that would be prudent.

1:29:29Thank you very much.

1:29:30Sure, sorry about that.

1:29:31Yeah, so really no administrative burden with this agreement.

1:29:37I think it's protection for the city.

1:29:39It's in the city's best interest because you may come across a different situation

1:29:45where an owner comes with a bigger property, a condo, a 200-unit condo,

1:29:49they keep as rentals.

1:29:50They're pushing for the rental rebate.

1:29:53They have the incentive because the costs and savings are high,

1:29:56that they go to the OLT.

1:29:58They get a favorable ruling because we're dealing with strict, pretty clear legislation

1:30:03that doesn't read in the concerns that were brought up by city staff,

1:30:07and you don't have this agreement.

1:30:10Whereas right now, you set this precedent,

1:30:12you introduce this agreement in situations like this,

1:30:16and basically say, we agree, we'll give you the rebate, but enter into this agreement.

1:30:21I don't know of a developer that's not going to enter into that

1:30:25to avoid the headache of the fight.

1:30:28Last point, and this project falls under the 2019 City of Guelph DC bylaw.

1:30:39So everything in the 2024 bylaw did not apply to this particular project at the time.

1:30:46And I don't want to get into it too much, but I see the staffs,

1:30:52I see city's intention in how they tried to define Lott in the 2024 bylaw.

1:30:58I actually just don't think it is as limiting as what is thought.

1:31:03For example, any owner who owns six abutting properties,

1:31:10or eight abutting properties, or 20 abutting properties all under the same ownership,

1:31:14is able to legally convey that property under the Planning Act,

1:31:19and it meets the definition of Lott under the DC bylaw.

1:31:22I know that's not the intention of the DC bylaw,

1:31:25it's wording the definition of Lott, but it pretty clearly to me falls under.

1:31:30But again, that doesn't apply because we were looking at the 2019 bylaw.

1:31:35Last point, I really encourage Guelph Council to follow with our idea of the agreement,

1:31:43because I really think it's favorable to both parties here. Thank you.

1:31:47Thank you so much for your response.

1:31:50And to both of you, thank you.

1:31:54We'll now look to move into a closed session.

1:31:58And Councillor Prusantile looks like you're willing to move that motion.

1:32:03But I'll just read it out loud here.

1:32:05That as per Section 9-1b, or the statutory powers of the statutory procedures,

1:32:13I'm sorry, I'll start again, of the statutory powers procedure act,

1:32:18intimate financial or personal matters or other matters may be disclosed at the hearing

1:32:25of such a nature having regard to the circumstances that the desirability

1:32:29of avoiding disclosure thereof in the interests of any person affected,

1:32:33or in the public interest, it weighs the desirability of adhering to the principle

1:32:37that hearings be open to the public. So that's moved by yourself.

1:32:41Councillor Prusantile, with Councillor Allt, thank you so much.

1:32:44We only need to second that. Is there anyone against that? No one.

1:32:49So we will now convene into closed session.

1:32:54And we will come back out and there will be a...

1:32:58I think as everyone knows, we can, you know, state the decision publicly immediately,

1:33:04or we can also reserve the right to send correspondence at a further date.

1:33:10So, but either way, we will come back out and say one of those two things based on our decision.

1:33:16Okay, so thank you very much. Well, thank you.

2:16:07I'll just call the tribunal back to order.

2:16:10So as we went into closed session to consider the matter, we sitting as a tribunal,

2:16:16we did come to a decision and we are not going to state the decision orally here tonight,

2:16:23but to let, you know, both parties know, and especially the Complaintant Party,

2:16:28that written decision will be sent within the timelines that are required,

2:16:33but a decision has been made by us. So you'll look forward to that as soon as possible.

2:16:38And I know that staff will get on that for you, but we thank you both for your submissions.

2:16:43And as I said, a decision has been made. Okay.

2:16:46So with that, thank you everyone for being here.

2:16:49I'm looking to formally shut down the tribunal through a motion of adjournment.

2:16:53Councillor Klassen and Councillor Allt will move that for us and is anyone against?

2:16:58That's nobody. So consider the tribunal closed and we're good to go.

2:17:03So thank you very much.