UPDATES MADE TO URBAN DESIGN PLAN

On Feb. 9, 2026 during the public city council meeting, officials approved major updates to urban policy. These include mandatory inclusionary zoning for new developments within Major Transit Station Areas (MTSAs) along the ION light rail line.  

Beginning July 1, 2027, developers will be required to set aside a portion of their units for affordable housing, a mandate that impacts project profitability and may prompt a rush of application filings before the deadline to bypass the new requirement.   

Once the mandate begins, two per cent of units in qualifying developments within MTSAs will be required to be affordable. That requirement will gradually increase to five per cent by 2031—the current provincial maximum permitted under Ontario regulations. The decision marks the end of nearly a decade of deliberation over how to require affordable housing in high-growth areas.  

“Communicating certainty is actually a beneficial condition in all of this,” Julie Wright, ward 7 councillor for the City of Waterloo, said during the Feb. 9, 2026 public council meeting.   

Wright was referring to the city’s decision to set a firm implementation date for inclusionary zoning rather than tying it to fluctuating market triggers.  

By providing a fixed timeline, the city aims to provide a predictable environment for land budgeting and project planning, preventing the wait-and-see approach that often stalls affordable housing construction.  

With roughly a year and a half until implementation, Adam Lauder, the city’s manager of community planning, said staff do not anticipate a significant surge, noting that approximately 25,000 residential units are already in the planning pipeline.   

“I don’t expect that there’s going to be a large rush of developments…in order to get in front, or become exempt,” Lauder said. “I do think that the industry will use the next year and a half, as they acquire land, to factor inclusionary zoning into their pro forma.”  

The certainty of the 2027 start date was met with bittersweet reflections from some leaders.   

“The preferred time…for the development community on this is never…and for me the preferred time for this was 10 years ago when we first started talking about it,” Royce Bodaly, ward 2 councillor for the City of Waterloo, said during the Feb. 9, 2026 Waterloo public council meeting.   

While implementation had originally been targeted for March 2025, a consultant report warned that current economic conditions could slow the housing market. In response, the council adjusted the timeline and coordinated with the cities of Kitchener and Cambridge to ensure transit-oriented development sites remain viable for builders.  

Typically, inclusionary zoning units are set to market averages to provide moderate affordability, rather than being tied to rent-geared-to-income (RGI) programs, which cap rent at 30 per cent of gross income.   

“While you’re walking the hallways, you’re not really going to know which door is affordable,” Lauder said. “Inclusionary zoning is not intended to deliver deeply affordable units, but rather moderately affordable units.”  

To help the industry manage added costs, the city is offering density exemptions so that affordable units do not count toward maximum density limits. The move aligns with Waterloo’s strategy of growing inward and upward; data shows roughly 80 per cent of recent residential growth has occurred through infill development.   

“Inward growth is generally better for the tax base and the taxpayer,” Lauder said.  

Council also approved $260,000 for a dedicated by-law dispatch arrangement. Beginning July 1, 2026, after-hours noise and nuisance calls will be routed through Waterloo Regional Police Service dispatch. Referring to a $440,000 transfer from social service funding back into the police budget, Jen Vasic, Ward 5 Councillor for the City of Waterloo expressed her frustration.   

“The police budget is huge, and now we’re giving the police more money from an upstream organization… I can’t figure out some better way forward,” Vasic said during the Feb. 9, 2026  Waterloo public council meeting.  

The meeting concluded with a presentation on the Urban Design Manual refresh.   

“Beauty should be a part of life for everyone and not only the affluent… aesthetics is a social good,” Vasic said during the Feb. 9, 2026 Wasterloo public council meeting.   

Diane Freeman, ward 4 councillor for the City of Waterloo added that the creation of happiness actually does bring value when giving consideration to urban design. Ultimately, the policy updates are intended to ensure the city remains accessible.   

“Inclusionary zoning helps to ensure that there’s a place in the city of Waterloo for everyone,” Lauder said.  

WATERLOO CANCELS LEASE WITH ARTSBUILD

On June 23, the City of Waterloo cancelled their lease agreement with ArtsBuild Ontario, citing cost concerns and the prioritization of affordable housing.  

ArtsBuild Ontario (ABO) is a non-profit organization based in Kitchener that provides small and medium-sized organizations with tools, training, and advice for the management of physical and digital creative spaces. Canceling the lease ended the plan to turn the former St. Columba Church into an art hub because the lease was a crucial step in making the space available for artists. Without it, the city’s plan for the arts space was abandoned.  

In February, Waterloo city council approved the $2.9 million purchase of the former St. Columba Church at 250 Lincoln Rd. The council said the city would use the site as a space for community arts and local groups for up to three years before turning it into affordable housing in the future.  

“The opportunity to purchase the land became available, and it’s already zoned residential,” Diane Freeman, the Ward 4 councillor at the City of Waterloo, said. “So, it made sense to consider that location for affordable housing.”  

She also explained that the affordable housing was the long-term plan for the property, while the art hub was for interim use.   

While the city prioritized long-term housing, members of the church community hoped the arts hub would remain.  

According to Judy Clerk, a warden at St. Columba Anglican Church, the site would be excellent for an art hub and more affordable housing.  

“We had a good venue for that type of community work, arts,” Clerk said.  

“We can do beautiful things, so hence arts, music, it’s a good community hub,” he said.  

She believes affordable housing and a small arts fund would help serve the wider community. When hearing about the redevelopment, the church wanted to give back to the community by providing affordable, accessible housing with a lasting community hub.  

“The building itself would be used at least for three years for arts groups, which we were happy about,” Clerk said. “I hoped this would make the city rethink the use of the building, because there’s a lack of that type of facility in the city.”  

One reason Waterloo cancelled its lease agreement with ABO was cost. The city would have had to invest more than $350,000 in upgrades for temporary use, with no return on the investment, only to demolish those upgrades after three years.   

“So it didn’t make sense from a financial perspective to invest in demolishing,” Freeman said.  

“The other thing is, even with the proposed renovations, this space is not accessible to citizens who want access to the space with a wheelchair,” he said.  

She further elaborated that the studio space within the site was located in the basement, and the cost of installing an elevator was deemed infeasible.  

“The financial viability of using it as a temporary use was not good,” Freeman said.  

Freeman said the council will receive an update in the fall regarding the next steps for the redevelopment of St. Columba Church. The steps include the demolition and removal of the existing structure, then advancing the planning approvals for affordable housing.  

“The city will also put out what we refer to as an expression of interest to see if there’s a private developer who would like to take on the housing component of the project,” Freeman said.  

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