Inclusionary Housing Canada

This term refers to housing provided at a price or rent that is affordable to moderate- and low-income households that cannot find suitable market-rate housing.  Put another way, it is housing that is provided at a controlled price or rent substantially below the price or rent for the equivalent units on the market.

It encompasses social housing typically provided through government assistance.  But in the context of inclusionary zoning, it more commonly refers to below-market rental and ownership housing that might be provided through some regulatory concessions.

This housing is made available only to households earning below certain maximum income limits, and other associated eligibility criteria.

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Inclusionary zoning programs have been used mostly to produce below-market housing affordable to households with moderate incomes.  These households typically earn too much to be eligible for social housing or government assistance, but too little to afford housing being provided by private development.

Nevertheless, there are a ways to use these programs so they also support housing for the low-income.  For example, this can be done by using them to secure development sites for the construction of government-assisted housing.  Also, non-profit agencies can be assisted to purchase some of the reduced-price affordable units, and then rent them out for low-income households.

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Inclusionary zoning programs are often said to stifle development, either by driving developers to build where there are no programs, or causing them to increase their prices to cover losses associated with building the affordable housing.

The 2007 Furman Report, which was sponsored by the National Association of Home Builders in the US, presents the most thorough and objective analysis to date on the potential impact of Inclusionary zoning.  It examined empirically the impact of inclusionary zoning on the price and production of market-rate housing in the Boston, San Francisco and Washington DC areas.

The study found, at the very worst and in only one of the three market areas, inclusionary zoning had no more than a marginal impact on price and production of market housing.  But that finding, based on evidence provided in the report, could be attributed to other reasons – like growth management policies.  Furthermore, other evidence also strongly indicates that any potential impact could be mitigated in a well-designed program.

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