City council has adopted a sweeping new zoning policy which will require that some developers construct affordable housing alongside market-rate units starting in 2022.

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

But the policy aims to increase the share of units that must be set aside for affordable housing to eight 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.

The rules won’t apply to purpose-built rental units until 2026 as the city continues its effort to encourage the development of that type of housing.

“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.”

Some councillors pushed for more agressive timeline

The new policy was approved by city council with a 23-2 vote following a debate that stretched on for most of the day on Tuesday.

Prior to the vote Coun. Mike Layton, who represents University-Rosedale, attempted to amend the motion so that the policy would be fully phased in by 2026’ not 2030.

In arguing for the change he called the framework a “once in a generation policy” but said that council needs to make sure it is implemented in a fashion “that actually makes a difference in people’s lives.”

His motion, however, was ultimately defeated by a vote of 18 to eight.

“Let’s make the most of this and not lose this opportunity. Let’s treat the housing crisis as that, a crisis,” Layton said during the debate, suggesting that his motion could double the number of new affordable units created over the next five years.

Layton argued that accelerating the implementation of the inclusionary zoning policy would still leave developers with a “motivating 15 per cent profit margin” while resulting in the creation of thousands of additional affordable units.

But some members of council expressed concerns about straying from the staff-recommended thresholds amid concerns that a more aggressive rollout could be the subject of appeals at the Ontario Land Tribunal and lead to further delays in getting much needed affordable housing built.

Tory, in fact, warned members of council that Toronto could “end up with something that is a far worse outcome for the city” if they are not careful with the policy they put in place.   

“I am sick and tired of telling Torontonians we are not ambitious in terms of the city we want to build because we are afraid of Doug Ford,” an exasperated Parkdale-High Park Coun. Gord Perks said during the debate. “Sure he has kicked us around and changed the size of council and limited inclusionary zoning to only around transit stations and it hurts and it is tiring. But I ask you: is the fact that it hurts and it is tiring, is that enough to go back to Torontonians and say 'we just gave up, we didn't feel like pushing back on Premier Ford and his ties to the development industry.'" 

It should be noted that while the new inclusionary zoning policy will apply to wide swaths of the city it will not be in effect in areas where the rise in housing costs has been less pronounced.

Most of the old City of Toronto will fall under the new framework, though, as will North Toronto, the western part of North York, the North Yonge corridor, South Etobiocke, Scarborough City Centre and southwest Scarborough.

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

City staff have promised to review the policy after one year.