Toronto's inclusionary zoning requires a share of new residential development in Protected Major Transit Station Areas (PMTSAs) to be affordable. A provincial regulation, Ontario Regulation 15/26 (in force January 29, 2026), exempts Toronto rezoning, site plan, and building applications made before July 1, 2027 from inclusionary zoning. From July 1, 2027, applications must provide up to 5% of units or residential gross floor area as affordable housing, kept affordable for 25 years. The regulation capped the set-aside at 5% and the affordability period at 25 years, overriding the City's higher rates and 99-year term.
Inclusionary zoning is the single most important cost timing question for a Toronto residential developer right now. The rules exist, but the province has hit pause on them until mid-2027, and a project's exposure depends entirely on when its application is made. Get the timing wrong and a 5% affordable set-aside lands on a pro forma that assumed none.
Ontario Regulation 15/26 came into force on January 29, 2026. It exempts Toronto rezoning, site plan, and building applications made before July 1, 2027 from inclusionary zoning requirements. In practical terms, most Toronto development applications in 2026 are currently outside the inclusionary zoning regime, and the requirement resumes on July 1, 2027.
A project that files a complete application before July 1, 2027 avoids the inclusionary zoning set-aside entirely under the current regulation. The same project filed after that date carries the 5% affordable requirement. On a large residential building, that is a material swing in yield and value.
Once the exemption lifts, inclusionary zoning applies in Toronto's Protected Major Transit Station Areas. The requirement, as capped by the province:
| Element | Requirement |
|---|---|
| Set-aside | Up to 5% of units OR 5% of residential gross floor area |
| Affordability period | 25 years |
| Where it applies | Protected Major Transit Station Areas (PMTSAs) |
| Trigger | Applications made on or after July 1, 2027 |
The 5% figure and the 25-year term are provincial caps. Ontario Regulation 15/26 limited inclusionary zoning to no more than 5% of units or residential gross floor area and a maximum affordability period of 25 years. This overrode the City of Toronto's inclusionary zoning by-law, which had set higher set-aside rates and a 99-year affordability period.
Is your Toronto site in a PMTSA, and does the inclusionary zoning timing affect your project? PreBuildIQ maps your address and flags the applicable rules in 60 seconds.
Check my site →Inclusionary zoning does not exist in isolation. The same station-area sites that gained significant height under Toronto's Major Transit Station Area framework are the ones subject to the affordable set-aside once the exemption lifts. A developer capturing the new 30-storey or 20-storey permissions near transit should model the height upside and the future 5% set-aside together, not separately.
Largely no. Ontario Regulation 15/26, in force January 29, 2026, exempts Toronto rezoning, site plan, and building applications made before July 1, 2027 from inclusionary zoning. Most Toronto development applications in 2026 are therefore currently outside the inclusionary zoning regime, which resumes on July 1, 2027.
From July 1, 2027, inclusionary zoning in Toronto requires up to 5% of units or 5% of residential gross floor area to be affordable, kept affordable for 25 years, in Protected Major Transit Station Areas. The 5% and 25-year figures are provincial caps set by Ontario Regulation 15/26.
The requirement resumes for applications made on or after July 1, 2027. Ontario Regulation 15/26 exempts applications made before that date. The exact exposure of a project depends on when a complete application is made relative to the July 1, 2027 threshold.
Ontario Regulation 15/26, in force January 29, 2026, capped Toronto inclusionary zoning at no more than 5% of units or residential gross floor area and a maximum affordability period of 25 years, and exempted applications made before July 1, 2027. It overrode the City's by-law, which had set higher rates and a 99-year affordability period.
Inclusionary zoning applies in Toronto's Protected Major Transit Station Areas (PMTSAs), the station areas the province has approved for higher-density transit-oriented development. Sites outside PMTSAs are not subject to the inclusionary zoning set-aside.
PreBuildIQ maps your Toronto address to its station-area status and flags the inclusionary zoning timing and set-aside that apply, in 60 seconds.
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