Real Estate

Inclusionary zoning could unite or further divide

By Mia Clarke, Associate Editor

The Ontario government’s plan to create more affordable housing comes with a controversial inclusionary zoning provision, Toronto real estate lawyer Matthias Duensing writes in The Lawyer’s Daily.

As part of its long-term affordable housing strategy, the government passed the Promoting Affordable Housing Act, says Duensing, principal of Duensing Law.

“The new provisions will create housing opportunities for lower- to middle-income families in high-density urban areas where housing would otherwise be unattainable,” he writes.

“The resultant mixed-income developments propose to create a cross-sectional societal mingling of rich, poor, young and old, within the same complex," he tells

Duensing says such an approach has worked in major cities across the United States, including New York City and San Francisco, and in London, England. He says Alberta and Manitoba are also working on an inclusionary zoning plan.

“If passed as drafted, the inclusionary zoning provisions would provide a framework through which municipalities can require developers to create affordable or below-market-value housing units within new condominium buildings (but not rental buildings) of a minimum of 20 units,” he writes.

Duensing says the rules would require municipalities to subsidize the units by paying the developer 40 per cent of the costs or offset the amount by waiving certain fees and payments.

He says many Ontario cities will be unable to afford the price tag.

“Certain — as yet unnamed — municipalities will be required to implement mandatory inclusionary housing in their cities (likely Toronto and other large, high-density urban centres),” Duensing writes.

“Cities adopting mandatory inclusionary housing would be required to specify the geographical areas within the city that may be usable for inclusionary housing, demographic information relating to what household incomes would be eligible for the subsidized housing and the market price for the units versus affordable housing prices,” he says.

“The province has proposed to cap the number of units within a new condominium development to five per cent of units or five per cent of the total gross floor area, to a maximum of 10 per cent of units or 10 per cent of the total gross floor area for condominiums located near a major transit hub.”

Duensing says the units would have to be maintained at an affordable price for 20 to 30 years.

“What constitutes ‘affordable’ is subject to a calculation that includes current market prices and income levels,” he explains.

The changes have been met with mixed review, says Duensing. While some praise the government’s effort to make urban housing more affordable, others say it doesn’t go far enough to meet the province’s need — and may further divide economic classes in the process.

“Of note, the proposals do not appear to expressly include certain development standards as to the construction quality, distribution, location and floor space requirements of the affordable units,” he writes.

”It is reasonable to assume that a developer would, if they can get away with it, try to locate its affordable housing units on lower levels, clustered together, built with the lowest quality of permissible materials and with substandard views.”

For example, says Duensing, New York City was ”roundly criticized for approving a separate entrance at the back of a luxury condominium for its affordable housing unit tenants. The state quickly passed a law disallowing the economic segregation — or otherwise — of affordable housing units from market-rate units.”

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