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May 2022

What is Inclusionary Zoning and How Will It Affect Your Development?

By Slonee Malhotra

Inclusionary zoning (IZ) is a regulatory tool intended to increase the availability of affordable housing by requiring developers to either contribute a set amount toward affordable housing or sell off a percentage of the units at a lower price point.[1] The tool will be implemented in Toronto on September 18, 2022, and in Kitchener, Waterloo, and Cambridge sometime during 2023[2]. The policy will be tailored to the region's specific housing needs.[3]

IZ is introduced to combat the current housing market crisis and create mixed-income developments where the market has not done so on its own. The tool has three objectives. First, to increase the supply of affordable housing for low to moderate-income households (between $32,000-$92,000/year, depending on household size). Second, to encourage market housing development by supporting a diverse range of housing supply. Third, to create inclusive and equitable communities. [4]

Which Developments will be Impacted?

IZ will apply to residential developments that are:

  1. Located within an identified IZ Market Area;
  2. Located near public transit or where a Development Permit System exists; and
  3. Contain more than 100 dwelling units and have 8000m2 of residential gross floor area.[5]

IZ will only apply to developments located within proximity, approximately 800m, from major public transit stations. In Toronto, these areas are known as Protected Major Transit Station Areas, a complete list of which should be before the minister before July 2022.[6] In Kitchener and Waterloo, the Ontario government requires IZ within 800m of ION stations.[7]

IZ can apply where the city implements a Development Permit System (DPS).[8] As of yet, no DPS areas have been identified within Toronto or Waterloo Region.


[1] Sarah Morrey, What is Inclusionary Zoning and How Will Developers be Impacted? (May 9, 2022), online: Lash/Condo Law <https://www.lashcondolaw.com/what-is-inclusionary-zoning-and-how-will-developers-be-impacted/> [Morrey].

[2] Terry Pender, Province limits affordable housing to region’s ‘urban spine’ (August 21, 2021), online:” The Record <https://www.therecord.com/news/waterloo-region/2021/08/21/province-limits-affordable-housing-to-regions-urban-spine.html?rf> [Pender].

[3] Cristine Ono, Inclusionary Zoning Policy, online: Toronto https://www.toronto.ca/city-government/planning-development/planning-studies-initiatives/inclusionary-zoning-policy/ [Ono].

[4] Ibid.

[5] Morrey, supra note 1.

[6] Andrew L. Jeanrie, Robert Blunt, & Stephanie Brazzel, Toronto City Council Adopts Inclusionary Zoning Framework (November 24, 2021), online: Bennet Jones <https://www.bennettjones.com/Blogs-Section/Toronto-City-Council-Adopts-Inclusionary-Zoning-Framework>.

[7] Pender, supra note 2.

[8] Ono, supra note 3.

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