As the demand for housing in Toronto continues to grow, the city has implemented various policies to address the issue of housing affordability. One such policy is the Inclusionary Zoning Policy. In this blog, we will explore how the Inclusionary Zoning Policy affects you, as a potential buyer of a pre-construction condo in Toronto.
What is the Inclusionary Zoning Policy?
The Inclusionary Zoning Policy, also known as IZ, is a proactive approach to combat the rising housing prices in Toronto and to promote housing affordability. According to recent statistics, only 2% of housing built or approved in Toronto in the last 5 years has been affordable. The City of Toronto states: “Our city is growing and we want to make sure new housing is affordable for those who call Toronto home.”
Through the Inclusionary Zoning Policy, the City hopes to:
– Increase the amount of affordable housing;
– Continue to encourage market housing development by supporting a diverse range of housing supply; and
– Create more inclusive, complete, and equitable communities.
How does the Inclusionary Zoning Policy work?
Under the Inclusionary Zoning Policy, developers in Toronto are required to set aside a percentage of units in their new residential developments for affordable housing. These units are usually priced below the market rate and are targeted toward individuals or families with lower to moderate incomes (households earning approximately $32,000 to $92,000 per year, depending on household size).
– Requiring developments located in both a Protected Major Transit Station Area and an Inclusionary Market Area to provide affordable housing;
– Requiring 5-10% of condominium developments to be affordable housing;
– Increasing those requirements incrementally to 8-22% by 2030;
– Ensuring units stay affordable for at least 99 years; and
– Setting ownership prices based on new income-based definitions of affordable.
What does this mean for new homebuyers of pre-construction condos in Toronto?
The new Inclusionary Zoning Policy has many benefits for new homeowners, especially if you find yourself within the low-to-moderate income bracket. For lower income individuals or families, this means:
More Affordable Housing Opportunities: Lower to moderate-income families who have previously struggled to find suitable housing options can now purchase a home at a price that aligns with their budget, ensuring the long-term affordability of their home.
Reduced Financial Burden: With the cost of living in Toronto increasing, many individuals and families are struggling to make ends meet and are facing challenges when it comes to saving for a substantial down payment or qualifying for a mortgage. With the availability of affordable units in pre-construction condos at below-market prices, it becomes more feasible to secure financing and manage the ongoing costs associated with homeownership.
Stable and Secure Housing: For individuals and families who have experienced the instability of rental housing, the Inclusionary Zoning Policy provides a much-needed solution. By purchasing a pre-construction condo in an affordable housing development, families can gain stability and security in their housing situation, and can even secure an asset for future equity. This stability can foster a sense of belonging, improve overall well-being, and empower families to focus on other aspects of their lives, such as education and career growth.
Built-In Community Support: Pre-construction condos in Toronto often include community amenities designed to assist residents. These may include access to childcare, fitness centres, parks, and recreational spaces. By incorporating these amenities, the Inclusionary Zoning Policy creates a holistic environment that fosters community well-being and enhances the quality of life for all residents, regardless of income level.
The new Inclusionary Zoning Policy also has many benefits for ALL homeowners, regardless of income bracket. These include:
Social Inclusion and Diversity: The Inclusionary Zoning Policy promotes social inclusion and diversity within Toronto neighbourhoods. By deliberately creating mixed-income communities, people from different income brackets can interact, share experiences, and learn from one another. This diversity adds vibrancy and richness to the community, promoting understanding and breaking down social and economic barriers.
Sustainable Living: Many pre-construction condos encouraged by the Inclusionary Zoning Policy are designed with environmentally-friendly features and sustainable practices. By investing in these developments, homebuyers can contribute to a greener and more sustainable future, aligning their values with environmentally-conscious living.
Whether you are a lower-income family seeking affordable housing or an individual with a higher income considering ethically-conscious homeownership, the Inclusionary Zoning Policy opens doors for a wide range of buyers. By understanding the advantages offered by this policy, you can contribute to the growth, vibrancy, and inclusivity of Toronto’s housing market.