Province proposes pausing affordable-housing rules near transit until 2027
Queen's Park wants to delay inclusionary zoning in Toronto, Mississauga and Kitchener to 2027, citing stalled construction. Here's what it means for neighbourhoods and new condos.
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By Torontoer Staff
If you follow development news in Toronto, this one will feel familiar and a little frustrating. The Ontario government has proposed pausing new affordable-housing quotas, known as inclusionary zoning, for private residential projects around major transit stations in Toronto, Mississauga and Kitchener until 2027.
That matters because those rules would have required developers to include a set share of affordable homes in new buildings near subway hubs and GO stations, the places where many of us expect growth to cluster. Queen's Park says the pause is a temporary response to softer construction activity, but city advocates and municipal leaders are already pushing back.
What the pause would actually do
Inclusionary zoning is pretty straightforward. A portion of new floor space or units in selected areas is set aside as affordable for a long period. Toronto council approved a plan back in 2021 that would eventually require between five and 10 per cent of floor space near major transit stations to be affordable for 99 years, rising over time to as much as 22 per cent by 2030.
The province had already stepped in with its own limits. In May 2025 Queen's Park capped what cities could require at five per cent of units or five per cent of gross floor area, and limited protections to 25 years. Still, the city went ahead, and the province approved a number of 'protected major transit station areas' in August. Toronto now says the rules are in effect in 89 zones, and Mississauga and Kitchener have their own areas covered too.
I don't think that makes any difference. I don't see developers rushing out to build condominiums.
Mayor Olivia Chow
Why Queen's Park wants a pause
On Jan. 12 the province posted a proposal on the Ontario Regulatory Registry asking for feedback on a temporary pause until 2027. The government says stakeholders are worried that mandatory affordability requirements could hurt the overall supply of homes and even lead developers to cancel projects, particularly in Toronto.
We need to get more shovels in the ground to build homes for families across the province, now is not the time to be adding unnecessary red tape and requirements that only increase the cost of building a home.
Michael Minzak, spokesperson for Housing Minister Rob Flack
That language echoes the broader debate: do you place the burden of creating affordable units on private builders, or should government use public land, subsidies and direct investment to produce affordability? The province is leaning toward the former concern, saying a temporary pause will make more developments financially viable and get construction moving again.
Local reactions from Toronto, Kitchener and Mississauga
City Hall in Toronto had been negotiating with Queen's Park over the proposal, but Mayor Chow said those talks didn't get far. On the ground you can already see the tensions: neighbourhood groups in places like Liberty Village and along the Yonge corridor want affordable options near transit, while some developers warn added costs could chill projects.
In Kitchener staff recently hired consultants to review the market and the city's planned inclusionary zoning. Their report advised that without offsetting measures the rules could delay recovery of transit sites, though they stopped short of saying the rules would be the sole reason projects fail. Kitchener staff still plan to move ahead in 2026 with modest quotas so the city can be ready if the market turns.
Inclusionary zoning has always been something that would only work in a really strong economy, because you are essentially putting the burden of providing the affordable housing units directly on the private landowners.
Mark Richardson, Toronto housing advocate
Advocates like Richardson say any pause for private developers should come with firm public commitments. A common suggestion is that the province offer a quid pro quo: if you ease requirements on private builders, then invest more public land or money to deliver affordable rental housing on provincial properties near transit.
What you should watch next
- Check whether your neighbourhood is in a protected major transit station area. Some areas approved by the province include parts of downtown and midtown Toronto, and a number of GO station corridors.
- Watch for consultations and council meetings. The province posted the proposal for feedback, so municipalities and residents can make their voices heard.
- Keep an eye on timelines. The proposed pause runs to 2027, but that could change depending on market signals and political pressure.
- Ask for guarantees. If you care about affordable rental homes near transit, push for clear provincial commitments rather than open-ended pauses.
For Torontonians juggling rent and commuting, this is not an abstract policy fight. It affects how and where new homes get built, how communities around stations change, and whether you can find a place you can afford that keeps your daily commute reasonable.
A longer view
This pause is part of a larger tug-of-war between levels of government, developers and community advocates. Some changes to affordability rules may be needed when markets slow, but you should expect debate over who pays for affordable housing and how long protections last. Ultimately, whether you live near Queen Street, in Scarborough, or out in Mississauga or Kitchener, the price of housing and access to transit-oriented homes matter.
Keep an eye on local council updates and the Ontario Regulatory Registry if you want to weigh in. The next couple of years will be important for shaping how our transit corridors grow, and for whether those new homes include people with a range of incomes.
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