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  • Writer's pictureFisherman Financial


Last week, the majority of Toronto’s city council voted in favour of a policy framework that will make it mandatory for certain new developments near major transit stations to include affordable rental and ownership housing units beginning in 2022*. If you currently own a rental unit or are thinking about purchasing a property, this can come as a concern as it can pose an issue to your rent or property value. So, let’s break it down and understand what this new policy is really all about and how it’s impacting us as individuals as well as the Toronto market.

What is the new policy?

Under Toronto’s new housing policy, developers proposing new builds with over 100 units will be required to allocate 5%-10% of these units as affordable housing. This policy would impact a lot of new buildings in Toronto, as most developers have an incentive to build as many units into each build as they can, to maximize profits. The allocation requirement is projected to increase up to 8%-22% by 2030, which would be approximately two floors of a 10-story building with 100 units. The policy applies to both rental and ownership units that will be leased or sold below market to those that qualify for affordable housing.

How will it impact the value of my existing unit?

The price of your existing unit may increase for two reasons:

1. There is now less supply on the market for the average buyer or renter, as up to 20% are restricted for affordable housing.

2. Your existing unit is likely in a building (pre-policy) without affordable housing units which may be attractive to folks on the market. In summary, demand for your unit can increase.

What will be the impact on market rate units during the policy?

It can be speculated that market rate units in a building with affordable housing will likely be at a higher price to subsidize the affordable housing units. It can be assumed that developers will do their best to achieve the expected profit margins.

What will be the impact on the overall market?

This may be good news for those that qualify for affordable housing however, it is expected to be quite competitive to obtain a unit as there is a large population base that will attempt to leverage this policy. Many people that qualify will likely not be able to reserve a unit due to limited supply and they will potentially be at a disadvantage when trying to obtain a market unit that is now at a higher price.

It can be projected that the market rate units in buildings with affordable housing will push up the market’s ceiling price. We can expect that the allocation of affordable housing units will drive up the demand and prices for market rate units since there will be a lower supply. It seems that the impact on the overall market will be higher prices.

This new policy can cause significant impacts to the market and it can be a good idea to start planning ahead of what might be increased unit prices with the introduction of the new affordable housing policy. If you are thinking about how to get ahead and where to start, we can help you determine the impacts and your options for the future. If you are interested in speaking to one of our professionals, sign up with Fisherman Financial today for a free consultation.

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