Saying No to Nuisance Appeals
PEI’s Planning Act makes it easy for NIMBYs to stall affordable housing.
Last year, Charlottetown City Council approved a variance that would have allowed a vacant house owned by the PEI Housing Corporation to be demolished and replaced with three affordable housing units. To date, the units have not been built and the empty house at 231 Richmond St. remains standing.
What is delaying this project? There are a lot of reasons why residential projects do not break ground right away. Sometimes it has to do with cost overruns or material shortages. Other times it is additional permitting requirements that leave new units in limbo. Unfortunately, this project is being stalled by one person — and not someone working for either the city or the developer.
Last April, the Prince Edward Island Regulatory and Appeals Commission (IRAC) received a planning appeal to stop the demolition of this run down, empty house. The appellant, Andrea Battison, said that the demolition permit should be revoked because it would contribute to a larger trend of “the loss of rich heritage buildings that make up the fabric of the downtown.”
Battison is no stranger to appeals against planning decisions on PEI. She has been listed as the appellant in three other cases since 2010, and has lost every time. Her most recent appeal, to stop the construction of 84 units on a downtown surface parking lot, was dismissed because the city followed proper process and used sound planning practices in approving the project the year prior.
She will likely lose this appeal as well, not least because her “loss of heritage” argument appears to have little standing. The property does not have a heritage designation — rather, it “is surrounded by, and sits in harmony with” actual designated heritage sites. Although frivolous appeals seem pretty innocuous, they can still do real damage to residential development (especially for affordable housing) because they can make projects financially unviable.
Appeals mean that builders and cities have to retain legal counsel to help them navigate IRAC’s deliberations and reporting requirements. When projects are delayed, builders also have to draw up new pro forma documents to account for material and labour cost inflation. Looking at the 84 units stalled by Battison last year, the residential construction price index may have risen by anywhere between 8% and 19% over the time from when City Council approved the project (June 2021) to when the appeal was finally dismissed (October 2022). Until recently, PEI had the highest headline inflation rate in the country, meaning that the Island’s construction costs could have held a comparably high standing as well.
These delays also make it more difficult to attract or retain financing, including from CMHC programs to incentivize affordable housing. This means that even if a project wins at IRAC, it is now likely more expensive to build (reflecting legal and material costs) and less likely to retain federal affordable housing investments.
NIMBY appeals: a legislated nuisance
It begs the question: how are people with no direct stake in a housing project able to get away with stalling it? The answer is simple: PEI’s planning rules let them do it. Section 28 of the Planning Act states that “any person” can appeal either a provincial or municipal council decision to approve or reject a planning permit.
In the case of municipalities, this privilege is even extended to appeals against comprehensive zoning bylaw amendments. Several PEI municipalities are reforming their official plans to relax their zoning restrictions and allow for more types of housing city-wide. It is going to be difficult for the province and feds to demand that local governments make it easier to build if upzoning decisions can be taken to and turfed by IRAC.
To make matters worse, an appellant does not even need to reside in the municipality where the permitting or rezoning decision is taking place, and they can submit their appeal free of charge. This means that, in the midst of a housing crisis, PEI lets individuals with no stake in a project appeal against new housing without paying a cent. There is a huge cost associate with nuisance NIMBY appeals, but it is paid in the form of legal fees by the developer and the municipality, inflated construction prices, and the economic fallout of delayed action on building new homes. The lax rules about who can appeal means that IRAC faces a significant backlog that keeps the Commission from addressing more important matters, like rulings on tax assessments, land protections, and landlord-tenant disputes.
Amending the Planning Act: An appeal to reason
Although it is fully within the rights of NIMBYs to weaponize the Island’s appeals processes, MLAs can amend Section 28 of the Planning Act to refine the scope of what can be appealed by third party applicants (i.e., not the developer, municipality, or immediate tenants). A big first step should be to prevent anyone other than primary residents of the given municipality to launch a third party appeal.
PEI can draw inspiration from the Ontario Housing Task Force’s recommendations to prevent abuse of these processes. For starters, the Task Force recommended that third party applicants be required to pay a $10,000 filing fee. The revenue from these fees can be earmarked for IRAC to hire additional analysts to provide quicker and more comprehensive verdicts on appeals.
The Island’s MLAs can also amend the act by exempting certain types of municipal decisions from appeals. This can include official plan amendments that allow for more units on single residential lots, demolition permits for as-of-right development, and approvals of projects with a certain number of affordable housing units. The Task Force recommended removing the right of appeal against “projects with at least 30% affordable housing in which units are guaranteed affordable for at least 40 years.”
Lastly, the Task Force recommended that commissioners or adjudicators have the discretion to “award full costs to the successful party in any appeal brought by a third party.” This move could allow both municipal governments and developers to recover the legal costs of NIMBY appeals without passing them on to taxpayers or future owners/renters.
One of many steps to take
When it comes to the housing crisis, fixing broken appeals processes is far from the only thing we can or should do. But solving a wicked policy problem is not like hunting a werewolf. We need a lot more to solve it than just a single silver bullet.
Amending Section 28 of the Planning Act can signal the Province’s commitment to expediting housing construction. Developers would no longer need to build in soft costs like retaining counsel when drawing up their pro forma. Municipalities would be able to look more ambitiously at planning reform when they do not need to worry about seasoned complainers. Tenants awaiting decisions on rent hikes would get a quicker and more informed verdict when IRAC can be less distracted by nuisance appeals.
PEI’s housing strategy requires a lot of measures to get to a supply target of 2,000 to 2,400 housing starts a year. But none of this can happen if projects, big and small alike, can be stalled by people who weaponize the Island’s appeals body. For the new strategy to have a lasting impact, fixing this anti-housing loophole is an important step.
