Inclusionary Zoning (IZ) is a planning tool that requires a certain percentage of space for affordable housing units in new private developments. City of Waterloo Council previously approved Official Plan and Zoning By-law amendments to introduce IZ within major transit station areas, requiring new private developments along the ION route to include affordable rental units. Policies and regulations to support IZ were scheduled to come into effect on March 31, 2025. Staff had committed to an analysis of the local real estate market and consultation with the community and local development industry prior to implementation.

Planning staff have been working with Kitchener, Cambridge and the Region of Waterloo and the local development industry. A consultant report analyzing local conditions advises that the economics for development have become more complicated in recent years, and introducing IZ now could potentially further slow the recovery of the housing market, and make it more challenging to build in transit-oriented sites.

Council directed staff to return on March 24, 2025 to bring a Zoning Bylaw that would defer implementation of the Inclusionary Zoning provisions to an undetermined date in the future, and that staff report back in June 2025 with recommendations to propose a new implementation date.

The city of Waterloo passed Zoning By-law 2025-011 on March 24, 2025, to amend the implementation date of Inclusionary Zoning from March 31, 2025, to “an undetermined date in the future”.

Staff will return to Council no later than June 2025 to provide an update on a proposed implementation date.