Oh boy, have we spoken a lot about inclusionary zoning over the years (see here, here, and the full list of 43 posts that I have tagged with "inclusionary zoning" here). Politicians tend to like this policy because they can present it as no-cost or "free" affordable housing. Few people have much sympathy for real estate developers, so it's easy to just say, "Don't worry, we'll just get the developers to pay for it."

But the reality of inclusionary zoning is that you need a robust housing market that can absorb the additional cost burden of delivering affordable homes. There's no such thing as a free lunch in economics, which is why when you read IZ reports and policy documents, you'll typically find language to the effect that it only works in a strong economy and a strong housing market.

These two descriptors do not generally apply in Ontario today, and so the province has just proposed an amendment that will pause the inclusionary zoning by-law. More specifically: developments with a complete application for a zoning by-law amendment, site plan approval, or a building permit on or before July 1, 2027, will not be subject to IZ in the cities of Toronto, Mississauga, and Kitchener.

Why?

Because IZ is deemed unviable under the current market conditions. In other words, there's nobody to whom the cost of building affordable housing can be passed. If you'd like to comment on this proposal, you can do that here, and you have until January 19, 2026.

Cover photo by Gleb Kozenko on Unsplash