Inclusionary Zoning Helps Ensure That New Developments Includes Affordable Housing


What is it?  

Inclusionary zoning is a policy where local governments require that a specified percentage of units in a new residential development be allocated for uses such as affordable housing, social housing, housing for people with disabilities, or any other housing that meets a community’s social and economic priorities.  


What does “affordable housing” mean? 

A crucial starting point for building the housing that working class people need will be ensuring that the definition of “affordable housing” used by local governments matches commonly accepted “real world” definitions of affordability.  

Housing experts and advocates typically define affordable housing as housing that costs 30 per cent or less of a household’s monthly pre-tax income. However, some local governments are using definitions based on current, (highly inflated) average market rents in a region.  

Projects that seek public support—including subsidies, direct public funding, tax exemptions, favourable rezoning or density bonusing—should be required to meet affordability criteria based on 30 per cent of average local renter incomes or 30 per cent of current market rental prices—whichever is less. It is crucial that the primary reference point for a particular region be earnings, not market price.  


How many affordable units should Inclusionary Zoning policies require? 

In some major urban areas of B.C., opportunities to build affordable housing are unnecessarily constrained by single-family residential zoning, which prevents the construction of more space efficient and less land-intensive forms of housing. However, in the absence of clear measures to limit speculation, blanket densification could easily result in further inflation of land values and housing prices as speculators bid up properties while amassing land for redevelopment. Moreover, local governments would lose important leverage in negotiations with developers if those developers simply receive the density they want without having to “trade” anything with municipalities in return—specifically, concessions that would promote a meaningful increase in the supply of affordable housing. 

Local governments should take strategic action on this issue with careful and targeted policies that open up the possibility of rezoning for densification across all neighbourhoods, but only when developers commit to building a significant percentage of new density as rental or social housing that meets defined affordability criteria. 

In the context of the current housing crisis, local government should try to negotiate 50 per cent or more affordable units for all new residential developments. In 2022 the BCGEU showed that such a formula could easily be possible for non-profit developers, if they are allowed enough to build at a high enough density. Read about the BCGEU’s affordable housing project here. 

Should B.C. local governments manage to secure authority for mandatory inclusionary zoning from the province, they can continue to negotiate inclusionary housing above mandated minimum levels, if that is desired. Affordable housing that is created through inclusionary zoning can be managed through direct agreements with building owners, contracts with non-profit housing agencies, or directly by government agencies. In the Metro Vancouver region, the publicly owned Metro Vancouver Housing Corporation (MVHC) is well equipped to manage and maintain rental housing. 


Making Inclusionary Zoning Mandatory Across B.C. 

Some local governments in B.C. are already implementing inclusionary zoning policies, but on a negotiated, case-by-case basis with developers. This is because B.C. local governments lack the necessary authority from the province to make it a mandatory requirement.   

Many jurisdictions have found that voluntary incentives are not enough and have moved to mandatory requirements for percentages of affordable and inclusive housing in all new residential developments. This approach is better for ensuring that affordability targets are met and allows for faster and more efficient application of the policy than happens when every agreement must be negotiated with developers on a case-by-case basis. A relatively simple but effective change the province could make is to allow municipalities to set mandatory inclusionary zoning requirements. 

A 2017 study found that inclusionary housing programs in the United States have so far directly created more than 170,000 units of affordable housing, plus an additional $1.7 billion worth of “in lieu” fees for financing the future construction of more affordable housing. The majority of U.S. programs are based on mandatory contributions of affordable housing or fees in lieu. 

Mandatory inclusive zoning legislation has already been passed in Ontario and Alberta, and the provincial government in B.C. should do the same.