The Community EditionUPDATES 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.
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