Inclusionary Zoning | City of Hamilton

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Engage Hamilton

Exploring Inclusionary Zoning as an Affordable Housing Tool

The City of Hamilton is exploring the feasibility of adopting a tool known as Inclusionary Zoning to help increase the supply of housing in Hamilton.

Before this tool can be adopted, the Province requires the City to conduct a detailed assessment of housing need and the potential impacts Inclusionary Zoning may have on the overall housing market.

To follow & provide input, visit engage.hamilton.ca/inclusionaryzoning

Exploring Inclusionary Zoning as an Affordable Housing Tool

The lack of sufficient affordable housing is an issue in Hamilton, across the Province, and more broadly across Canada. The City of Hamilton is exploring the feasibility of adopting a tool known as Inclusionary Zoning to help increase the supply of affordable housing locally.

Inclusionary Zoning requires new market rate residential development within a Protected Major Transit Station Area (PMTSA) to include a certain percentage of new affordable housing units. Inclusionary Zoning is one tool that could help increase the supply of more affordable housing units in the City over the long term.

View map indicating potential PMTSAs in Hamilton(PDF, 660.72 KB)

Study Area Map of Inclusionary Zoning for Delineating MTSA and PMTSA

How Does Inclusionary Zoning Work in Ontario?

Ontario Regulation 232/18 under the Planning Act was enacted in April 2018 by the Province of Ontario. The regulation allows municipalities to secure affordable housing in new residential developments with more than 10 units that are located within a PMTSA.

Inclusionary Zoning policies must be carefully designed to ensure that residential development continues to be viable and does not significantly disrupt the supply of market rate housing. Inclusionary Zoning policies can include a range of measures to reduce the financial impact of providing affordable units on the private development industry. These measures may include phasing in Inclusionary Zoning requirements, establishing more permissive planning regulations (e.g. increased height, increased density, reduced parking requirements etc.), or providing financial incentives, among others.

Before a municipality can adopt an Inclusionary Zoning policy framework, the Province requires municipalities to conduct a detailed assessment of the potential impacts Inclusionary Zoning may have on the overall housing market within the City.

Project Components

Timeline

Frequently Asked Questions

Based on Provincial legislation there are several studies that must be undertaken before a municipality may enact an Inclusionary Zoning policy.

Provincial legislation limits the use of Inclusionary Zoning to PMTSAs.
A Major Transit Station Areas (MTSA) is defined in the Province’s A Place to Grow: Growth Plan for the Greater Golden Horseshoe as the area within an approximate 500 to 800 metre radius of an existing or planned higher order transit station or stop within a settlement area; or the area including and around a major bus depot in an urban core.
Within Hamilton, the area around planned Light Rail Transit stops and the existing and planned GO Stations are considered MTSAs (see map).
Some or all of the City’s MTSAs may be identified as PMTSAs.
To be identified as a PMTSA, the City needs to identify the following in the specific area:
- the number of people and jobs/hectare to be accommodated
- the permitted uses of land and buildings
- the minimum densities that are allowed in buildings developed in the area
An Official Plan Amendment is required to implement PMTSAs and must be approved by the Province.

An analysis of existing and projected demographic trends, existing and projected housing unit supply by type and size, household incomes as related to affordability thresholds, average market prices and rents, and overall demand for affordable housing, in accordance with the requirements of the Planning Act (O. Reg 232/18).
The report will contain a detailed analysis of current and projected housing needs in the City of Hamilton across the broader housing continuum.
Housing Needs Assessment PC Presentation: Planning Committee - Feb 14, 2023

An analysis of potential impacts on the housing market and financial viability of development and redevelopment from the enactment of an Inclusionary Zoning program, in accordance with the requirements of the Planning Act (O. Reg 232/18).
This study will also include sensitivity testing and analysis assessing the impact of various Inclusionary Zoning regulation options which may be considered to offset the cost of providing affordable units.

An independent review of the Market Feasibly Study by a qualified professional must be completed in accordance with the requirements of the Planning Act (O. Reg 232/18).

Phase 1 - Project Launch (Q2 2023 - Q1 2025)

Background prerequisite work
Drafted Policy Framework

Phase 2 - Consultation (Q2 2025 - Q4 2025)

Public Meetings
Stakeholder Working Groups
Develop administrative process

Phase 3 - Final Policy Framework (Q1 - Q2 2026)

Official Plan Amendments
Zoning By-law
Finalize administrative process

What is Inclusionary Zoning?

Inclusionary Zoning is a planning tool that municipalities in Ontario may adopt pursuant to the Planning Act, R.S.O., 1990 c. P.13, to require a certain percentage of affordable units to be included in market rate housing development or redevelopment located within Ministry approved Protected Major Transit Station Areas only. The level of affordability, percentage of affordable units, and the duration that those units are required to remain affordable, must be set out in City’s Official Plan policies and an implementing by-law.

What is a Protected Major Transit Station Area (PMTSA)?

A PMTSA is a type of major transit station area (MTSA), where inclusionary zoning may be applied. Municipalities may determine which MTSAs it identifies as PMTSAs pursuant to the Planning Act, R.S.O., 1990 c. P.13, but PMTSAs require Ministry of Municipal Affairs and Housing approval. Approved PMTSAs allow for inclusionary zoning to be implemented and used by municipalities as a planning tool.

What is a Major Transit Station Area (MTSA)?

A MTSA includes the area around any existing or planned higher order transit station or stop within a settlement area; or the area including and around a major bus depot in an urban core. Major transit station areas generally are defined as the area within an approximate 500 to 800 metre radius of a transit station, representing about a 10-minute walk.

What are some key terms associated with Inclusionary Zoning?

Affordable Housing: In the case of ownership housing, the least expensive of, housing for which the purchase price results in annual accommodation costs which do not exceed 30 percent of gross annual household income for low and moderate income households, or housing for which the purchase prices is at least 10% below the average purchase price of a resale unit it eh regional market area. In the case of rental housing, the least expensive of a unit for which the rent does not exceed 30 percent of gross annual household income for low and moderate income households, or a unit for which the rent is at or below the average market rent of a unit in the regional market area.
Minimum Project Size: The minimum area or number of units proposed that will trigger the requirement for Inclusionary Zoning from a developer. Provincial legislation says that Inclusionary Zoning cannot be compulsory in projects less than 10 units. The City may consider a larger minimum project size.
Set-aside Rate: The portion of the new development required to be “set-aside” by the developer for affordable housing. This rate is expressed as either a percentage of gross floor area or as a percentage of units. E.g. If a developer proposed to build 100 units and the set-aside rate is 10% of units, 10 units of the 100 proposed units must be affordable.
Affordability Depth: The affordable price or rent for a unit. The affordability depth will be set by the City corresponding to household incomes.
Affordability Term: The amount of time in years that an IZ unit is required to stay affordable.
Market Rate: Residential units that are rented or sold at market rates generated by the real estate market without any direct subsidies.

Date modified

October 24, 2024