Inclusionary Zoning Policy: Overview

Inclusionary zoning is in effect in certain areas of Toronto as of August 15, 2025. The City of Toronto adopted Official Plan and Zoning By-law amendments in 2021 that require affordable housing in new residential developments, creating mixed-income housing. On May 12, 2025, the Province put in place Ontario Regulation 54/25, which capped what municipalities can require to up to five per cent of a development to be affordable for a maximum of 25 years. On August 15, 2025, the Minister of Municipal Affairs and Housing issued decisions on Council-adopted Official Plan Amendments related to 95 Protected Major Transit Station Areas (PMTSAs), of which 89 are located in Inclusionary Zoning Market Areas.

Inclusionary zoning is one policy solution to help address the housing needs of Toronto’s low-income and moderate-income households (earning roughly between $44,000 and $112,000 a year depending household size). Other City initiatives are being advanced as part of the HousingTO 2020–2030 Action Plan to address the full spectrum of housing issues.

As our city grows, we want to ensure our neighbourhoods provide housing options for a full range of incomes and households. Creating mixed-income, inclusive communities is key to the City’s economic vitality and livability. Through inclusionary zoning, the City hopes to:

  • increase the supply 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.

The following inclusionary zoning requirements apply, based on the Minister’s Regulations (O. Reg. 54/25 and O. Reg. 232/18) and the Official Plan and Zoning By-law:

  • inclusionary zoning applies to developments located in a both a Minister-approved Protected Major Transit Station Area and an Inclusionary Market Area, as shown on Official Plan Map 37. This key map shows Minister-approved Protected Major Transit Station Areas that are subject to Inclusionary Zoning;
  • condominium developments are required to provide five per cent of the total units or total residential gross floor area as affordable rental or affordable ownership housing;
  • units must stay affordable for at least 25 years;
  • rents and ownership prices are based on income-based definitions of affordable;
  • no affordable housing requirements apply for purpose-built rental developments until January 1, 2026;
  • mid-rise development proposing fewer than 100 units and less than 8,000 square metres of residential gross floor area are exempt;
  • transition provisions apply. For example, developments that submitted a complete site plan application on or before August 15, 2025 are exempt.

Inclusionary zoning typically creates housing for households earning too much to be eligible for social housing but not enough to be able to afford market rents or prices. These “low- to moderate-income households” generally fall between the 30th and 60th percentile of the income distribution. In the City of Toronto, this includes households earning approximately $44,000 and $112,000 per year, depending on household size. As a policy tool, inclusionary zoning is challenged to create deeply affordable units without additional funding.

The inclusionary zoning policy outlines definitions for affordable rental housing and affordable ownership housing that implement City Council’s direction as part of the HousingTO Action Plan to develop income-based definitions for affordable housing. Find out about current income-based affordable rents and prices on the City's Housing web page.