What is Inclusionary Housing, and why does it matter?

The challenge of providing affordable housing in rapidly growing urban centers is not new, nor is it easily solved. Around the world, major cities struggle to provide quality and affordable housing options. London and New York, for example, have had long-standing, well-documented crises of affordability that have only accelerated as these cities have become more and more desirable, resulting in considerable growth. As Toronto also grows, we will increasingly be no exception. As I write this, our market is reaching a feverish pitch – with small, semi-detached homes in walkable areas now tipping out over the $800,000 mark. In addition, there are currently 78,000 households on the waiting list for social housing in this city. We already need to be doing more to keep Toronto affordable and inclusive for all.

One of the ways some cities have managed their affordability challenge is to introduce inclusionary housing policies (sometimes known as inclusionary zoning) which make planning approvals conditional on new housing developments containing a specific proportion of affordable units. Simply put, laws are enabled that require new private, market housing developments to also include affordable units. Unlike many U.S. cities, however, Toronto does not have the legislative authority to implement inclusionary housing.

All of that could change if a bill in the Ontario legislature is passed this year.  Bill 39 would allow municipalities to set inclusionary housing requirements for all new developments of 20 or more units (cities can decide whether or not they want to trigger the policy at a higher threshold). Municipalities would also be able to determine exactly how the term ‘affordable’ is defined and could set criteria on unit size, location, and construction standards among other regulations.

The City of Toronto has already shown its support for inclusionary housing policies. In December 2013, Council voted to support City Planning’s recommendation to request that the province grant municipalities the authority to implement inclusionary housing. If we are going to achieve our Official Plan’s vision of a diverse, equitable and inclusive city, we need the legislative powers to ensure that as our market housing grows, our affordable housing stock increases accordingly.  Bill 39 proposes a critical, important change to our local planning powers.

After David Hulchanski’s highly circulated ‘Three Cities‘ report, the challenges of a divided city in Toronto are well known. We still need better tools to overcome these problems. An inclusionary housing policy would help ensure that affordable housing requirements are applied consistently and transparently, while also allowing the City to plan more reliably for its housing needs. It would also create a level playing-field for developers who could avoid the undue burdens, such as land price speculation, that can arise when policies are applied inconsistently (currently, without the heft of regulatory requirements, we negotiate affordable housing where we can on a site-by-site basis).  When Inclusionary Housing requirements are put in place, land values adjust to accommodate this requirement.

Other global centres are out in front of us on this issue. Less than a year ago, New York City was given the opportunity to implement inclusionary housing and took full advantage. The city now has a comprehensive housing strategy which, in addition to creating inclusionary housing policies, looks at how the whole planning system can help to improve housing affordability. For example, we know that proximity to excellent public transit reduces overall household costs, and increases access to jobs throughout the city. But today, housing close to public transit sells for a premium, forcing residents with less choice to the periphery of the city where transportation costs are higher. This is an incredible catch-22. Inclusionary Housing would ensure that as we approve new developments along our main transit corridors, we are providing access to affordable housing in these developments that are in the locations that can be best leveraged to improve overall quality of life.

In an era of minimal higher level government investment in affordable housing, it is clear that more action is needed locally to ensure that Toronto continues to be a city that can accommodate a broad range of demographics and incomes. Inclusionary Housing is a policy tool that will have a significant impact on access to affordable housing in our climate of accelerated growth.

After all, we are seeking to create a city of complete communities, that is, places with a diversity of housing types (apartments, townhomes, semi and singles) and tenures (rental, ownership), geared towards a variety of incomes.