In order to address the lack of affordable housing within the City of Toronto, Toronto City Council has adopted an Inclusionary Zoning (IZ) policy framework that will impact select future residential developments located in the City.
What is IZ?
IZ is a regulatory tool that requires that developers to allocate a certain percentage of dwelling units within a proposed residential development as affordable housing.
The purpose of IZ is to support individuals who are priced out of the current housing market. The goal is to support the creation of new affordable housing units, create inclusive and equitable communities, and ultimately increase the supply of affordable housing.
IZ will apply to residential developments that are (1) within a Protected Major Transit Station Area, (which are located approximately 500-800 metres from a higher order transit station) and (2) within an identified Market Area, as identified on Official Plan Map 37.
How Will Developers be Impacted?
IZ will apply to all residential developments within the eligible areas noted above that are greater than 100 dwelling units and have more than 8,000 m2 of residential gross floor area. Developers will be required allocate a certain percentage of the development to affordable housing, which amount will increase yearly as outlined in the chart below:
Condominium units could either be allocated as affordable ownership units, or developers could transfer them to an affordable housing services provider, such as Habitat for Humanity, who would oversee the rental of these units.
These units are still part of the condominium corporation, and residents will still be bound by the Condominium Act and the Corporation’s governing documents.
Although no one tool is going to solve the housing crisis, IZ has been adopted by major cities throughout North America, such as Boston, Chicago, Montreal, and Vancouver, and has proven to have a meaningful impact.
Developers proposing a new residential condominium within the City must consider the impact that IZ will have on their project. If you have any questions on how IZ may impact your development, please reach out to our team to discuss.