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Inclusionary zoning (IZ) is a zoning tool that enables municipalities to require affordable housing units in new residential construction. The City needs to undertake several steps before implementing IZ, some of which are currently underway:
An Assessment Report that analyzes the potential IZ impacts on the housing market and the viability of projects.
Preparing Official Plan policies and an IZ by-law.
Why does Mississauga want to implement Inclusionary Zoning?
The lack of affordable housing options is a growing concern in Mississauga. It affects our City in significant ways:
Our younger households and families must look further away to afford housing
Our workforce experiences a reducing quality of life as spend more time and money commuting to the City for work.
Our community is less inclusive with housing being unaffordable for so many.
The City is working with the Region of Peel to offer residents more affordable housing options. Inclusionary Zoning is one of the options. Our ultimate goal is to maintain and promote an inclusive, mixed-income, complete community in Mississauga.
Affordable Housing: Housing is considered affordable if a family or individual spends no more than 30% of gross annual household income on shelter costs.
Minimum Project Size: The minimum area or number of units proposed that will trigger an IZ requirement from the developer. Provincial legislation says that IZ cannot be compulsory in projects less than 10 units; however, 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. It is expressed either as a percentage of gross floor area or as a percentage of units.
For example, if a developer proposes to build 100 units and the set-aside rate is 10% of units, 10 units of the 100 units must be affordable.
Affordability depth: The affordable price or rent of a unit. The affordability depth will be set by the City and Region, and it corresponds to a household income.
Affordability term: The amount of time in years that an IZ unit is required to stay affordable.
Low-income families (less than $58,000 household income) may already be eligible for assistance through the Region of Peel's social housing program. In contrast, middle-income households do not qualify for subsidized housing.
What is a PMTSA and why can IZ only be implemented in PMTSAs?
Protected Major Transit Station Areas (PMTSAs) are lands within an approximate 500-800 metre radius of a transit station or stop, primarily along existing or planned transit corridors. PMTSAs are intended to be developed as high density, mixed-use, transit-supportive neighbourhoods that provide access to local amenities, jobs, housing, and recreation opportunities.
Provincial legislation directs and limits the application of IZ to PMTSAs unless other areas are prescribed by the Province. Developing affordable housing in high-growth areas will promote ridership, make efficient use of transit investment, and improve access to transit.
Research has demonstrated that it is unlikely that an IZ requirement will affect the prices of market units within a given development. The developer will always charge the maximum the market will bear, regardless of additional costs or savings.
How could IZ impact developers and the housing market?
The City understands that for an IZ program to be successful, it needs to strike a balance between generating new affordable supply and ensuring that development remains viable.
The development community will need an adjustment period combined with some flexibility in the IZ policy framework, to ensure that developers remain motivated to build housing. The City is looking at ways to lessen the impact of IZ on the development community and housing market, including:
Phasing in requirements
Potential offsets/incentives, e.g., reduced parking requirements, lower set-aside rates in certain areas
There is still work to be done. IZ cannot be implemented until PMTSAs are outlined in the Regional Official Plan and Mississauga Official Plan, which requires Provincial and Regional approval.
In addition to Official Plan policies and an IZ By-law, the City must develop an administrative process to select eligible buyers and tenants, as well as a method to ensure that IZ units remain affordable for the affordability term. Development of this process is currently underway.
Please refer to the IZ project webpage regularly for project updates.