New Toronto zoning policy could force some developers to set aside up to 22 per cent of units for affordable housing

The CN Tower is reflected in a high rise building behind a construction crane in downtown Toronto on Saturday, Feb. 4, 2012. (Pawel Dwulit / THE CANADIAN PRESS)

TORONTO -

A new zoning policy which would require that some developers construct affordable housing alongside market-rate units will be up for debate today as city council meets for the first time following its summer break.

The new inclusionary zoning framework would initially require that the developers of condominiums with 100 or more units set aside five to 10 per cent of their total square footage for affordable rental and ownership units.

But the policy aims to increase the share of units that must be set aside for affordable housing to 8 to 22 per cent by 2030, depending on the location of the development and the type of below-market rate unit that is provided.

The city says that the affordable units would be priced so that households making between $32,486 and $91,611 per year can live in them without shelling out more than 30 per cent of their monthly income on shelter costs.

According to a staff report, one-bedroom apartments would therefore go for $1,090 a month while two-bedroom apartments would go for $1,661 and three-bedroom apartments would go for $1,858.

Ownership costs would be capped at $190,100 for a one-bedroom unit, $242,600 for a two-bedroom unit or $291,700 for a three-bedroom unit.

“In a nutshell, inclusionary zoning means by law that new developments must include an affordable housing component where rents or the cost of ownership will be less than our expensive marketplace otherwise offers,” Mayor John Tory told reporters at city hall on Tuesday morning. “The private development industry has been very successful, even through the pandemic, and that's good for jobs and for the economy. But the long term health of the city itself and its economy requires that our development industry should play an increasing role in the supply of affordable housing.”

The policy which will go before council today as Tory’s first key item of business won’t initially apply to purpose-built rental units as the city continues its effort to encourage the development of that type of housing.

However, staff are recommending that affordable housing requirements for purpose-built rental developments begin to be introduced at a “modest rate” starting in 2026.

The policy will apply to the former City of Toronto, North Toronto, the western part of North York, the North Yonge corridor, South Etobiocke, Scarborough City Centre and southwest Scarborough at first, all areas that staff say have experienced an acceleration in development and shelter costs.

Developers in the downtown core will face the most stringent requirements, having to set aside 7 to 10 per cent of all units for affordable housing as soon as next year and 16 top 22 per cent by 2030.

Meanwhile, the requirements in most parts of the city’s inner suburbs will be less onerous, requiring that developers only set aside five to seven per cent of all units for affordable housing starting in 2022 and eight to 11 per cent after 2030.

Speaking with reporters, Tory said that he believes the new policy along with a handful of other affordable housing initiatives already underway will help create 12,000 additional below-market units over the next five years, helping to fulfill a commitment to create 40,000 new affordable rental housing units by 2030.

The mayor, however, committed to reviewing the program in one year and “recalibrate” certain aspects if necessary.

“When we hear criticisms of percentages I sit in a position where I have heard them on both sides. On the one side I have heard the housing advocates who say that the policy isn’t anywhere near strong enough in terms of the requirements placed on the development industry. On the other side I have the development industry who we have to rely on to build the housing saying it is too stringent. So I tend to think when I hear that, that you are doing too much or too little, that you have landed in perhaps the right place,” he told reporters. “Having said all that I am very willing to review this so if there are some things that are obvious after a year, in terms of either the ability to do more or an impact that it’s having that is negative on our overall production of affordable housing, then together we can have another look at this.”