Ontario’s New Planning Rules Require Cities to Set Minimum Affordable Housing Targets

Minister of Municipal Affairs and Housing and Government House Leader Paul Calandra speaks to reporters in Toronto, on Sept. 7, 2023. The Canadian Press/Spencer Colby

Ontario’s housing minister has announced new planning guidelines that require cities to set minimum targets for affordable housing, a move that he says will pave the way for a “long-term building boom.”

Minister Paul Calandra unveiled his government’s Provincial Planning Statement at the Association of Municipalities of Ontario conference this week, saying the land use guidelines will give municipal leaders the “tools and flexibility they need to build more homes.”

“It will ensure one consistent set of planning direction across the province,” he told conference attendees on Aug. 20.

“It recognizes that municipalities understand local challenges and priorities when it comes to building homes, and that you know best where and what types of homes are needed to address the unprecedented growth we’ve seen in Ontario.”

Ontario’s population is expected to reach 21.7 million people by 2046, an increase of 43.6 percent over the next 24 years, according to provincial projections.

The affordable housing requirement, which sets minimum targets for the “provision of housing that is affordable to low and moderate income households,” was not in the first draft of the policy released last year. It was added to this spring’s revamped draft and made the final version released Aug. 20.

Calandra said the document “cuts red tape” while laying out a plan aimed at helping cities and towns move ahead with housing despite market conditions.

“One of the most important things about the new planning statement is that it ensures that housing starts can continue to grow even with the global uncertainty we’re seeing, even with the increase in interest rates,” he said. “We are building the foundation for a long-term building boom across the province of Ontario.”

According to the province’s housing tracker, Ontario is lagging behind the home-building rate needed to meet the government’s goal of constructing 1.5 million homes by 2031.

The province has yet to meet any of its yearly targets aimed at reaching the 1.5 million goal. The closest it came was in 2023 when it reached 99 percent of its 110,000 new home goal after it began including long-term care beds in the tally.

Home building in Ontario’s biggest city is also falling behind. Canada Mortgage and Housing Corp. data released last week said year-to-date housing starts are down 9.5 percent in Toronto compared to the same period in 2023.

The Provincial Planning Statement is meant to serve as a directive for municipal planners on community development, outlining which areas can be used for residential, industrial, and agricultural purposes.

Calandra said key changes in the document will encourage the construction of more homes near major transit stations as well as on underused low-density lands such as shopping plazas and malls. It also encourages building a broader range of housing options, including housing for students and seniors.

The updated Provincial Planning Statement, which takes effect in October, comes in at 100 pages and 30,000 words shorter than previous planning statements, serving as a replacement for earlier drafts that were distributed last year and in the spring, the province said in a press release.

The new document streamlines the existing land use planning policy framework, replacing both the 2020 Provincial Policy Statement and 2019’s framework “A Place to Grow: Growth Plan for the Greater Golden Horseshoe.”

The new Provincial Planning Statement was written after three rounds of consultations with stakeholders over a two-year period.