Can Inclusionary Zoning Solve Toronto’s Housing Crisis? A Look at Policies, Challenges, and the Path Forward

Introduction

The federal government didn’t make Toronto unaffordable—you did. We all did. When money was essentially “free,” we spent, borrowed, and upgraded. We were anxious, nervous, uncertain, and felt unsafe—so we spent our way to comfort in an expensive “nesting” process.

Can we really blame the government for making borrowing cheap? Would another government have done it differently? Probably not. But now, it’s time to pull our heads out of our collective asses and shift the housing crisis conversation to where it truly belongs: housing the unhoused and the under-housed.

While inclusionary zoning is often presented as a solution, the real answer lies in governments at all levels taking back responsibility for affordable housing. Instead of relying on private developers to solve a public crisis, we need a bold shift toward building housing as a public good.

What Is Inclusionary Zoning?

Inclusionary zoning (IZ) is a regulatory tool that requires developers to allocate a portion of new residential units as affordable housing. It’s designed to integrate affordability into market-driven developments.

How It Works in Ontario:

Eligibility: Applies to developments with 10 or more residential units.
Affordability Period: Units must remain affordable for at least 99 years in Toronto.
Target Areas: IZ policies focus on areas around major transit hubs, where density is increasing.
Developer Incentives: Municipalities may offer reduced fees, tax breaks, or expedited approvals to offset costs.

Toronto’s Inclusionary Zoning Policies

Toronto adopted inclusionary zoning in 2021 to ensure affordability requirements are built into the city’s growth strategy.

Current Requirements:

Developers must allocate 5%-10% of residential units as affordable housing, depending on location and project size.
Affordable units are aimed at households earning 30%-60% of Toronto’s median income.

While inclusionary zoning is a step forward, it’s not nearly enough to address the broader housing crisis.

What Has Inclusionary Zoning Achieved?

Initial Results

Inclusionary zoning is in its early stages in Toronto, and its contribution to affordable housing production is limited.

Broader Context: HousingTO 2020-2030 Action Plan

Toronto plans to create 40,000 affordable rental homes by 2030, with inclusionary zoning expected to account for only a small fraction of these units annually.
Most affordable housing will need to come from public land development, non-profit partnerships, and direct government investments.

The Case for Government-Led Affordable Housing

Here’s the uncomfortable truth: private developers cannot and will not solve the affordable housing crisis. Their primary obligation is to shareholders and profit margins—not to the public good. Inclusionary zoning asks them to build affordable units while maintaining profitability, which inherently limits what they can deliver.

The Solution? Take Affordable Housing Out of Private Hands

What Governments Can Do:

Build and Operate Housing Directly: Governments must reclaim responsibility for affordable housing by developing purpose-built rentals and supportive housing themselves.
Stop Selling Public Land: Publicly owned land is a finite resource. Instead of selling it to private developers, cities should use it to create long-term affordable housing.
Fund Housing at Scale: Massive public investment is needed to build enough housing to meet demand, from low-income rentals to supportive housing for the unhoused.
Commit to Housing as a Right, Not a Commodity: Housing policy should focus on providing shelter for those in need, not enabling middle- and upper-class buyers to purchase market-rate homes more easily.

Challenges of Inclusionary Zoning

Low Impact: Requiring 5%-10% of units to be affordable barely scratches the surface of the city’s needs.
Developer Resistance: The policy places financial strain on developers, potentially reducing overall housing supply.
Geographic Gaps: IZ applies only to specific areas, leaving much of the city unaffected.

Final Thoughts: The Real Crisis Requires Bold Solutions

Inclusionary zoning is a step forward, but it’s not enough. Solving the housing crisis requires governments at all levels to take ownership of the problem—not rely on private developers to fix it.

Publicly built, publicly owned housing should form the backbone of any serious strategy to address affordability. The conversation must shift away from enabling market-rate buyers and focus instead on providing housing for the unhoused and underhoused.

The housing crisis isn’t about who can buy a home. It’s about ensuring everyone has a safe place to live. It’s time we stopped relying on the private sector to solve a public issue and started treating housing as the basic human right it is.