Ontario Plans to Halt Affordable Housing Rules Near Transit

Doug Ford’s government wants to pause affordable housing requirements for new residential projects close to transit hubs in Toronto, Mississauga, and Kitchener, claiming these rules are slowing down construction during a housing crisis.

The suggested amendment would freeze inclusionary zoning in these three Ontario cities until July 2027. This planning tool allows cities to require developers to rent some units below market rates – at 30 percent of a household’s gross income – in new buildings near major transit stations.

This proposal comes as Ontario struggles to meet its target of building 1.5 million new homes over ten years, which Municipal Affairs and Housing Minister Rob Flack described last year as now a “soft” goal.

The provincial government believes this change will help make housing projects more feasible under current market conditions, according to a spokesperson for Minister Rob Flack who shared their thoughts via email on Wednesday.

“We need to get more shovels in the ground to build homes for families across the province,” said Michael Minzak. “Now is not the time to be adding unnecessary red tape and requirements that only increase the cost of building a home.”

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In 2025, Toronto received an F grade after seeing housing starts drop by 40 percent, according to a report from the Residential Construction Council of Ontario. The city’s condo market also weakened last year, drawing comparisons to the crash back in the early 1990s.

The province’s proposal also highlighted significant rises in financing and construction costs over recent years. Officials mentioned they’ve heard from industry stakeholders indicating that affordable housing mandates-especially in Toronto-could lead developers to pause or cancel their projects.

NDP Calls Pause ‘Serious Failure’

The Official Opposition reacted strongly on Wednesday, stating that the Progressive Conservative government would block at least 3,000 affordable homes from being built each year just in Toronto alone.

“In a housing crisis this severe, that’s a serious failure,” said NDP finance critic Jessica Bell in a statement. “Toronto’s inclusionary zoning rules simply ask developers to include some affordable homes in large new condo and purpose-built rental buildings.”

She expressed concern that the Ford government might never approve “strong” inclusionary zoning policies.

Mississauga Mayor Carolyn Parrish voiced her disappointment regarding how the province is proceeding. She noted that her municipality’s housing task force had discussions with top local developers about inclusionary zoning and “they weren’t fighting back.”

“They were OK with it. None of them were ever thrilled, but that wasn’t a massive objection,” she explained. “I can understand that developers are really feeling pressure right now. We’re facing a housing crisis too.”

A map of major transit areas approved by the provincial minister of municipal affairs and housing in August for inclusionary zoning. (City of Toronto)

Housing advocate Mark Richardson stated that how inclusionary zoning functions currently in Ontario is merely “a marginal solution” for tackling the housing crisis.

This policy was first adopted by Toronto city council back in 2021 but didn’t become effective until last year due to delays from the province. Additionally, this came after modifications were made by the province capping affordability requirements at five percent of units within applicable new builds while limiting how long those units must remain below market value for just 25 years.

Richardson suggested replacing this policy with direct provision of affordable housing on provincial lands located near transit stations.

“We need to deliver affordable housing at speed and at scale, and you’re not going to do it through inclusionary zoning,” stated Richardson, founder of Housing Now TO. “You’re only going to do it through direct investment from all three levels of government.”

Richard Lyall , president of the Residential Construction Council of Ontario ( RESCON ) , indicated he would prefer entirely eliminating inclusionary zoning.

“[Governments] look for these things that look good on paper , like inclusionary zoning policies , but they don’t really work. They have a chilling effect on investment ,” he remarked.

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