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  • Yexi Wang and Adam Huang

Toronto’s Inclusionary Zoning Policy: Will housing prices decline?

As Toronto expands, residents across the city are struggling with housing affordability. While the amount of new housing supply is growing, the city is also experiencing significant price escalation and rent increases. Inclusionary zoning is a land use planning policy tool to encourage market housing development by supporting a diverse range of housing supply; and eventually create more inclusive, complete and equitable communities.

The City of Toronto approved its new inclusionary zoning framework on November 9, 2021.

Inclusionary zoning creates affordable housing options for households earning too much for social housing qualification but not enough to afford market rents or property prices. These “low- to moderate-income households” generally fall between the 30th and 60th percentile of the income distribution, which includes households earning approximately $32,000 and $92,000 per year in Toronto. The City has developed a new HousingTO Action Plan to address the full spectrum of housing in Toronto from now to 2030.

Goal: increase affordable housing - how do they plans increase affordable housing

Housing, especially when it is directed to affordability within a large metropolitan, is quite a hard topic to resolve. With Toronto’s HousingTO Action Plan, rental replacement policies, site restrictions, and zoning changes are some of the implementations the city aims to support the action plan while serving Torontonians. Rental replacement policies were set in stone to protect existing housing options rather than being demolished for new developments that contribute to rising housing prices. New development sizing restrictions aim to guarantee 20% of additional residential units to be affordable to the first priority community in the area. Finally, zoning changes help ensure that a % threshold of affordable housing is met within numerous set areas. Each specific region has been given set % priorities where affordable housing must be available to the immediate community.

In addition to inclusionary zoning, the City also has programs, such as the Housing Now Initiative and Modular Housing Initiative, that support the development of new affordable rental and ownership homes.

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