It goes by the bureaucratic name of “inclusionary zoning,” but it’s a powerful new tool offered by the provincial government that gives Ontario cities the power to compel developers to include affordable housing units in large new residential projects, even luxury condos.
And while it’s optional, the head of London council’s planning committee says inclusionary zoning could be useful in hitting the London Plan’s target of 25 per cent affordable housing in all developments.
“We need to improve and increase the amount of affordable housing and inclusionary zoning could be a tool to accomplish that,” said Coun. Stephen Turner.
The province passed new affordable housing legislation that included inclusionary zoning more than a year ago, but some of the details of the regulations were just released last month and municipalities are expected to comment by Feb. 1.
The regulations would apply to new housing of 20 units or more, but not rentals. It would only requires five to 10 per cent of the units be affordable and would require municipalities to cover as much as 40 per cent of the cost of an affordable unit.
That cost could cause municipalities to balk, but Turner said there are other ways to get around that requirement by offering developers financial incentives through “bonusing,” allowing greater height and density than is normally permitted.
“It’s a trade-off. We are not putting more public money into it, but they have the opportunity to generate more revenue,” said Turner
The city already has been working with developers to create more affordable rental units through the Housing Development Corp. (HDC). The agency offers loans and grants to residential housing developers to reduce the cost of construction.
In return, the developer must rent some or all completed rental units below market rates.
Turner said inclusionary zoning could create the same healthy mix in the new housing market and avoid the stigma associated with affordable housing.
“You are creating mixed buildings that are not just affordable housing and segmented away from the rest of the community,” said Turner.
Peder Madsen, president of the London Home Builders’ Association, said inclusionary zoning has been “on the radar” for residential developer for years. He said it could benefit the community as long as developers do not have to shoulder the whole cost burden.
“We are supportive of a model where the cost of delivering government-mandated units would be shared with the governments,” said Madsen.
Madsen said if developers have to bear the full cost of creating and selling more affordable units, they will have to recover that cost from sale of regular units.
Gregg Barrett of the city’s planning department said his staff is scrambling to provide a report to council on the new regulations so it can meet the Feb. 1 deadline for comment.