Ontario municipalities will be able to mandate affordable housing in new developments under planned legislation that cities, including the "scorching" housing market of Toronto, are closely eyeing.

The proposed legislation would allow communities to establish so-called inclusionary zoning policies, meaning new housing proposals would require developers to include a certain percentage of affordable units in order to be approved.

Vancouver and Montreal have similar policies, as do many major cities in the United States, advocates say.

It's a step forward that helps Ontario catch up, said Greg Suttor, a housing researcher with the Wellesley Institute.

"It's not a panacea for affordable housing, but it can help meet some of the needs," he said.

"It will tend to create more of a social mix in development. For example, in downtown Toronto ... if new development only serves the upper half of the income distribution, that's not as healthy as if we build cities that house a bit more of everybody."

In Toronto, lower-income people are already being pushed to outlying areas, Suttor said. A recent RBC Economics report listed Toronto's housing market — along with Vancouver's — as scorching, saying single-detached home affordability "continues to slip deeper into stressful territory for homebuyers."

Mayor John Tory said the planned initiative would provide one more tool to address the issue of affordable housing.

"It is not a question of whether we, together with the private sector and the other governments and the not-for-profit sector, are going to address this, it's a question of how," he said.

'Talk is easy' critic warns

More detailed information, such as percentage requirements and definitions of "affordable," were not forthcoming Monday, and it will likely be years before inclusionary zoning is in place in any Ontario communities.

Let's see action. Let's see legislation, let's get it to committee, and make sure it's good enough to actually help families. - Cheri DiNovo, NDP MPP

The government will launch consultations before introducing legislation, which would then take time to get passed. After the legislation is enacted, Tory said the city would develop an approach, put it before the executive committee, then get it approved by city council.

There have already been several bills proposing inclusionary zoning that have come before the legislature, including several from NDP MPP Cheri DiNovo and one from a Liberal member.

"I don't think this is an issue to start from scratch," said Harvey Cooper, Ontario managing director of the Co-operative Housing Federation of Canada.

The idea was under "active discussion" in 2009, and the government "missed the boat" by not enacting legislation then, he said.

DiNovo said she's glad the government "has finally recognized the need for inclusionary zoning."

"But talk is easy," she said in a statement. "Let's see action. Let's see legislation, let's get it to committee, and make sure it's good enough to actually help families. I'm calling on the minister to pass legislation this spring before the legislature breaks."

Move may increase condo prices

The Ontario Home Builders' Association warned that "nothing comes for free."

"Creating more affordable housing units should not come at the expense of housing affordability," CEO Joe Vaccaro said in a statement.

"Requiring free housing units as part of a new community approval is just another way to have new neighbours cover the bill as the cost of their new home goes up to pay for these new units."

American jurisdictions with inclusionary zoning have financial and planning incentives to support the developments "to ensure affordable housing doesn't undermine housing affordability," Vaccaro said.

Municipal Affairs and Housing Minister Ted McMeekin says the move "might well" increase the price of condos. He admitted some developers have concerns about the proposed legislation, but they did about the Greenbelt protected land too, he said.

"Some 10-plus years ago we heard some hollers and even a few screams," he said. "Today the Ontario Home Builders' Association applauds the Greenbelt, tell us they have learned to live with it."

The zoning announcement was part of Ontario's long-term affordable housing strategy, which includes $178 million over three years announced in the government's recent budget.

The budget also contained money for a portable housing benefit that would give more options to people fleeing domestic violence, and support for the construction of up to 1,500 new housing units to help people with complex needs such as seniors, people with mental health issues and at-risk youth.