Inclusionary Zoning: Low-Income Communities Left Off the Map

Toronto’s housing crisis existed long before COVID-19, but the pandemic has intensified housing challenges and shone light on the urgent need for immediate solutions, and medium and long-term policy interventions. Low-income and equity-seeking groups identified affordable housing as the top priority for COVID-19 recovery in SPT-supported consultations

Though Inclusionary Zoning will not end Toronto’s housing crisis on its own, this promising tool would increase the supply of affordable ownership and affordable rental housing in the city. So what is Inclusionary Zoning? In Toronto, Inclusionary Zoning (IZ) would require a percentage of new condominium and new purpose-built rental housing to be affordable to residents with low to moderate incomes, benefitting a growing segment of Toronto residents who don’t earn enough to afford market prices but earn too much to be eligible for social housing.

In 2018 the Province of Ontario gave municipalities including the City of Toronto the power to implement their own IZ regulations. But in 2019 the Ford government limited IZ to Protected Major Transit Station Areas as part of Bill 108.

The City recently released its Draft Inclusionary Zoning Framework and are inviting feedback from the public.

We are pleased to see that the draft policy includes some important recommendations made by housing advocates, many of which were also proposed in our 2018 report Inclusionary Zoning: Evidence and Implications for Ontario: 

  • a longer affordability period (99 years), 
  • using an income-based approach to the City’s definition of "affordable housing," and 
  • not requiring the municipality to provide incentives for developers of market-rate housing (except for those proposing to build more affordable housing units than required by current "set aside" rates, i.e., the proportion of square footage or units that must be set aside for affordable housing).

Yet the draft policy could be improved, especially to prioritize the housing needs of low-income residents. It proposes a very low set aside rate of 510% on new condominiums and only 2.5-5% for new purpose-built rental housing. Furthermore, these proposed rates don’t apply to developments of fewer than 100 units.

Major cities across North America such as New York, San Francisco, Boston, and Montreal have successfully dedicated 10–35% of new developments to affordable units. The City’s financial analysis reveals that we could support higher set aside rates in many parts of the city and developers would not be deterred from building in these areas. And Council's Planning and Housing Committee asked staff to explore increasing set aside rates upwards of 10-30% for condo developments and 5–20% for purpose-built rental buildings.

The regulations should include higher set aside requirements for affordable housing.

Secondly, while the Province has restricted IZ to Protected Major Transit Station Areas, the City is proposing to further limit IZ to Strong and Moderate Market areas. This means that IZ won’t be applied in many low-income communities and Neighbourhood Improvement Areas, including those across northwest and northeast Toronto. Given the deep and long-standing need for affordable housing across Toronto, why further restrict the application of inclusionary zoning? 

Toronto Public Health data have exposed the disproportionate impact of COVID-19 on racialized and low-income communities in Toronto’s Neighbourhood Improvement Areas, many of which have already experienced high eviction rates. Moving forward, the City needs to develop IZ regulations through an equity lens that recognizes housing as a fundamental human right, taking ambitious steps to increase our affordable housing supply across all of Toronto and prioritizing the needs of low-income communities. 

City staff are aiming to provide their final recommendations on the IZ policy to the Planning and Housing Committee in the first half of 2021.

Want to influence those recommendations? Give feedback on the draft policy at one of three virtual public meetings the City is hosting — the first is tomorrow, October 29, with other opportunities on November 5 and November 10

Learn more about the City of Toronto’s Inclusionary Zoning Policy on their website.

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