Inclusionary zoning may be the solution for the affordable housing crisis in Ontario, but specific details remain to be determined.
On March 14, the provincial government announced a proposal to introduce legislation that would allow municipalities to establish inclusionary zoning policies. These bylaws, having been introduced in certain cities in the United States, would make it mandatory for a certain percentage of a housing development to be marked for affordable housing.
There are several different types of inclusionary zoning, but a few of the options don’t actually provide in-house affordable housing and instead allow developers to have cash “buy-outs” or off-site affordable housing to fulfill the requirements. In those cases, developers can continue creating expensive housing in specific neighbourhoods and avoid mixed-income housing by off-setting housing requirements to poorer neighbourhoods.
The province has committed to create legislation that would allow municipalities to approve inclusionary zoning and set their own standards. It has a long way to being approved, but is being supported by the City of Toronto, which has been pushing for this policy for years.
Inclusionary zoning is an important avenue for affordable housing because it allows people in need to live in different neighbourhoods instead of being pushed into poorer areas that often have less access to transit and inner-city jobs. Mixed-income housing also breaks up the physical barriers associated with social stratification. It provides people with disabilities or a specific set of needs more living options across different and in well-built housing. One of the biggest benefits of inclusionary zoning is that it speeds up the amount of affordable housing being built, so the city doesn’t go years without an increase in development.
The New Toronto Official Plan already contains policies that make it mandatory for developers who request height and density increases over five hectares to create a 20 per cent affordable housing contribution. This policy was launched under section 37 of The Planning Act.
This means that when a developer tries to renegotiate a building contract, it is necessary for them to provide a certain percentage of affordable housing. This is an interesting incentive-based approach to inclusionary zoning because it doesn’t make affordable housing mandatory. Instead, it indicates that if the developer wants expansion, a trade-off in the form of affordable housing must be agreed upon. This allows the developer to back out of the deal if they wish, or commit to it and meet affordable housing requirements.
Toronto Waterfront used this type of incentive program to create affordable housing in the area. The city also allowed them to “buy-out” of the affordable housing arrangement or commit to building the houses by off-setting them to another neighbourhood.
According to a report by the Ontario non-profit housing association, effected developers appealed the policy to the Ontario Municipal Board and the matter remains unresolved. With the new provincial legislation, it could become mandatory for the developers to abide by these building guidelines or harsher ones, especially if Toronto adopts inclusionary zoning officially.
Other forms of inclusionary zoning have been adopted in Canada and the United States. The most effective type of inclusionary zoning was made in Montgomery Country, Maryland in 1973. All developers with more than 50 units must set aside 12.5 per cent to 15 per cent of their units as affordable housing in exchange for a density bonus of 20 per cent. This type of law has been a resounding success because it is extremely specific and it avoids the back-door avoidance of mixed-income housing on the part of greedy developers.
In California, the state participated in a similar type of proposal that Ontario presented on March 14. California created legislation and a model of inclusionary zoning for municipalities to use if they chose. The policy was adopted by San Diego and San Francisco and has been very successful because it allows for state-led backing from a legal standpoint, but allows for flexibility in the specifics of what works in inclusionary zoning for each individual municipality. Over 90 per cent of municipalities in California that have inclusionary zoning include density bonuses. Density bonuses are a tool that permits developers to build more housing units, floor space, or taller buildings then laws permit in exchange for building affordable housing.
In Vancouver, incentive-based inclusionary zoning has been adopted. Land is required to be set aside for affordable housing, but there is no obligation for the developer to build the units unless subsidies are provided. This only produces a certain amount of inclusionary zoning because it is not mandatory, and land is left being unbuilt with no affordable housing on it.
It appears that the most successful form of inclusionary zoning has been when it is mandatory with incentives such as density bonuses included. Other possible incentives could include subsidies, free reductions, or property tax incentives. Incentives also off-set increasing costs for developers and buyers because the government helps to support the mandatory affordable housing agreements.
The first step is for Ontario to set up the municipalities with legislation. It is too early to speculate what inclusionary zoning means for Queen’s Park, but it will be interesting to see the land battle begin with developers when it is all done.