Ajax Council Approves Inclusionary Zoning Framework with 0% Affordable Housing Requirement

Ajax council approved an inclusionary zoning framework for the Ajax GO Station protected major transit station area, but set the affordable-housing requirement at 0% after consultants found active inclusionary zoning was not financially feasible in current market conditions. Council said it had to make a decision to meet Housing Accelerator Fund requirements, while also amending parts of the policy dealing with resale proceeds, inflation and future lender consultation.

Topics Discussed

INCLUSIONARY ZONING FRAMEWORK

Council approved Official Plan Amendment 102 and Zoning Bylaw Amendment Z16/26 for inclusionary zoning in the Ajax GO Station protected major transit station area.

Staff summarized the consultant report this way: "The report found that active implementation of IZ was not financially feasible under the current market conditions and presented three options. Option one to implement IZ with a 0% set aside rate and revisit the rate when the market conditions improve. Option two was to implement with an active set aside but support it with financial offsets. And option three do not implement IZ."

Council chose the 0% set-aside option, with the framework remaining in place for possible future increases.

FUNDING DEADLINE AND NEED FOR A DECISION

Council was told it could not simply delay the matter without consequences for federal funding.

Councillor Nancy Henry said, "So, yes. So, we must make a decision today. We must move forward with a decision one way or another. If we don't, we will not be meeting the HAF requirements and therefore we put that funding in jeopardy."

She also said that postponing the item would not stop development immediately, but the funding deadline meant council still had to act.

PROVINCIAL RULES AND FUTURE ACTIVATION

Staff said Ontario's inclusionary zoning framework allows municipalities to require affordable units in protected major transit station areas, with affordability maintained for up to 25 years.

Staff explained: "Under Ontario's IZ framework, municipalities can establish policies within protected major transit areas that require certain new residential and mixed use developments to include affordable housing units. The current framework allows municipalities to provide up to 5% of the units to be set aside as affordable units with affordability maintained for up to 25 years. In exchange, affordable units receive certain financial benefits, including exemptions from applicable development charges, community benefit charges, parkland dedication requirements, etc."

Council discussed whether a developer could proceed with no affordable units while the set-aside remains at 0%. Councillor Henry asked, "So if a developer came forward currently right now and uh wanted to put through uh site site plan approval, we go through with this. There's no affordable housing component that's required. They do not wish to put one in. Conceivably they could go through with this plan and in the next five years there could be no affordable housing in that area. Correct."

The framework can be revisited later if market conditions improve.

RESALE PROCEEDS AND 25-YEAR AFFORDABILITY

Council also debated whether owners of affordable units should have to share resale gains with the town after the affordability period.

Councillor Shaun Collier objected to that approach, saying, "I'm I'm having trouble with that because, you know, the primary goal of affordable home ownership is enabling low moderate income families to build equity over time. Why would we put something in here where they would have to share that equity back with the town? What on earth does does the town have to do with this other than the zoning?"

He also called the provision "just another piece of red tape" and argued that owners "should get to keep" money earned after paying taxes, interest and principal over many years.

Councillor Sterling Lee defended the concept, saying, "the whole purpose of this is to ensure that people have homes, not that they can make money off their homes." He added that after 25 years, owners could keep their homes, but "in the event of a sale, I think it is fair that um they contribute to making the next phase of affordable homes affordable."

Staff said affordable units remain locked in for the full affordability period even if the building or unit is sold. Councillor Rob Tyler-Morin summarized that point: "when a unit let's say that said 12 units in a 200 unit building is designated, that locks for 25 years. That's including if the building gets sold or if the unit gets sold. those units are affordable for that entire time."

MORTGAGE ACCESS AND IMPLEMENTATION DETAILS

Council raised concerns about whether restrictive resale rules or ownership structures could affect mortgage access.

Collier said "the consultant did speak to the fact that they have not consulted with residential mortgage lenders and CHC as to what the implications of some of these things today might do to the ability to get a mortgage or to the ability for a developer to um qualify for CHC which is kind of important." He asked staff to consult lenders and report back.

Council approved that direction. It also amended wording so the policy would account for inflation and transaction costs, and changed "financability" to "affordability."

Motions

• Inclusionary Zoning Framework — Approved: Council approved Official Plan Amendment 102 and Zoning Bylaw Amendment Z16/26, establishing an inclusionary zoning framework with an initial 0% affordable-housing set-aside.
• Mortgage Lender Consultation — Approved: Staff were directed to consult residential mortgage lenders and CMHC-related stakeholders and report back during development of implementation guidelines.
• Policy Wording Amendments — Approved: Council approved amendments addressing inflation, transaction costs and wording changes including "financability" to "affordability."
• Future Set-Aside Increase — Deferred to Future Review: Any increase above the 0% set-aside will depend on future market review and any change in provincial conditions.

Attendees

• Mayor Shaun Collier
• Councillor Rob Tyler-Morin
• Councillor Lisa Bower
• Councillor Nancy Henry
• Councillor Sterling Lee
• Councillor Joanne Dies
• Councillor Marilyn Crawford