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Toronto's new inclusionary zoning policy went to Planning and Housing Committee this week. Agenda item, here. The recommendations were approved, which means that the item will move onto City Council next month for final approval.
Here's a summary of some what is being proposed (though keep in mind that I am not a planner and you should probably do your own due diligence if you're looking to buy land and/or develop here):
IZ to come into force next year in 2022.
IZ to only apply on projects with 100 or more residential units.
Three distinct market areas across the City with differing set aside rates (see below charts). This strategy acknowledges the fact that you generally need submarkets with expensive housing and rising prices to be able to absorb the financial burden of the affordable housing units. I've written a lot about this dynamic on the blog. Relevant posts, here.
It's in the chart, but it's perhaps worth repeating: Purpose-built rental projects will not be required to deliver any affordable housing units at the outset of this policy. This is important to note because the margins on purpose-built rentals are razor thin.
The set aside rates are planned to increase to 8-22% by 2030.
The affordable units will need to remain affordable for 99 years. And the rents and prices are to be geared toward low and moderate income households, which are currently defined as those earning between $32,000 and $92,000.
Clear transition period for the development industry.
Ongoing monitoring of the policy to make sure it doesn't suck.
If you're interested, the full staff recommendation report can be found here and the draft OPA and zoning by-law can be found here and here.
https://twitter.com/donnelly_b/status/1451744401923973121?s=20
It upsets me when I read things like this (click here if you can't see the embedded tweet above). I think it creates a false sense of a free lunch and ignores all of the nuances and complexities associated with inclusionary zoning.
IZ is an obligation to provide a certain number of affordable units in new housing developments. There's a lot of detail and debate around where this should apply, how much needs to be provided, and at what degree of affordability.
But at the end of the day, it's important to keep in mind that at meaningful levels of affordability, these IZ homes are going to be built at steep losses. More info on the economic impacts of IZ can be found here.
The simple math is that the costs to build these homes are going to be greater than the revenues that they bring in. Which is why developers aren't out building affordable housing everywhere. There's no margin.
In order to build, somebody or something needs to provide a subsidy so that this revenue-expense shortfall can be made up. How this works its way through the market is where I have tried to focus the discussion when writing about IZ. There are complexities. Some lessons from Portland, here.
But to just assume that these costs will get magically absorbed by housing developers, with no other knock-on effects or distortions to the market, is incorrect.
https://vimeo.com/582847449
News has just dropped that architect Bjarke Ingels, Roni Bahar, and Nick Chim are launching a new "design living" company called Nabr. Their website says that it is "coming soon to Silicon Valley" and so presumably there will be tech involved and we should actually be calling it a startup.
The video embedded at the top of this post (link here) will tell you a little bit about it. But from what I can glean from their website, the focus is on using technology and modular construction to deliver housing that is more personal / adaptable, more sustainable, and more attainable. There is a note on their site about buying with only 1% down.
We have talked a lot on this blog about the antiquated and slow-moving nature of design, development, and construction. So what it absolutely clear is that there are many problems to be solved here. I am excited to see what the team brings forward.
Toronto's new inclusionary zoning policy went to Planning and Housing Committee this week. Agenda item, here. The recommendations were approved, which means that the item will move onto City Council next month for final approval.
Here's a summary of some what is being proposed (though keep in mind that I am not a planner and you should probably do your own due diligence if you're looking to buy land and/or develop here):
IZ to come into force next year in 2022.
IZ to only apply on projects with 100 or more residential units.
Three distinct market areas across the City with differing set aside rates (see below charts). This strategy acknowledges the fact that you generally need submarkets with expensive housing and rising prices to be able to absorb the financial burden of the affordable housing units. I've written a lot about this dynamic on the blog. Relevant posts, here.
It's in the chart, but it's perhaps worth repeating: Purpose-built rental projects will not be required to deliver any affordable housing units at the outset of this policy. This is important to note because the margins on purpose-built rentals are razor thin.
The set aside rates are planned to increase to 8-22% by 2030.
The affordable units will need to remain affordable for 99 years. And the rents and prices are to be geared toward low and moderate income households, which are currently defined as those earning between $32,000 and $92,000.
Clear transition period for the development industry.
Ongoing monitoring of the policy to make sure it doesn't suck.
If you're interested, the full staff recommendation report can be found here and the draft OPA and zoning by-law can be found here and here.
https://twitter.com/donnelly_b/status/1451744401923973121?s=20
It upsets me when I read things like this (click here if you can't see the embedded tweet above). I think it creates a false sense of a free lunch and ignores all of the nuances and complexities associated with inclusionary zoning.
IZ is an obligation to provide a certain number of affordable units in new housing developments. There's a lot of detail and debate around where this should apply, how much needs to be provided, and at what degree of affordability.
But at the end of the day, it's important to keep in mind that at meaningful levels of affordability, these IZ homes are going to be built at steep losses. More info on the economic impacts of IZ can be found here.
The simple math is that the costs to build these homes are going to be greater than the revenues that they bring in. Which is why developers aren't out building affordable housing everywhere. There's no margin.
In order to build, somebody or something needs to provide a subsidy so that this revenue-expense shortfall can be made up. How this works its way through the market is where I have tried to focus the discussion when writing about IZ. There are complexities. Some lessons from Portland, here.
But to just assume that these costs will get magically absorbed by housing developers, with no other knock-on effects or distortions to the market, is incorrect.
https://vimeo.com/582847449
News has just dropped that architect Bjarke Ingels, Roni Bahar, and Nick Chim are launching a new "design living" company called Nabr. Their website says that it is "coming soon to Silicon Valley" and so presumably there will be tech involved and we should actually be calling it a startup.
The video embedded at the top of this post (link here) will tell you a little bit about it. But from what I can glean from their website, the focus is on using technology and modular construction to deliver housing that is more personal / adaptable, more sustainable, and more attainable. There is a note on their site about buying with only 1% down.
We have talked a lot on this blog about the antiquated and slow-moving nature of design, development, and construction. So what it absolutely clear is that there are many problems to be solved here. I am excited to see what the team brings forward.
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