City drops strict inclusion targets, banks on land and incentives
Montreal moved to dismantle its flagship 20‑20‑20 inclusionary zoning bylaw, betting that looser rules and public land would spur badly needed housing supply.
The overhaul, unveiled Friday by mayor Soraya Martinez Ferrada, replaced the three‑part requirement with a single 20% off‑market housing obligation applied only to projects larger than 18,000 square metres, alongside financial incentives to be developed by a working group.
The city also froze mandatory cash contributions at 2025 levels during the first phase.
“By relaxing the regulations for a mixed-use metropolis, focusing on off-market housing, and making use of City-owned land, we are removing barriers to construction and giving stakeholders the means to take action,” Martinez Ferrada said.
Shift from mandates to incentives
The 20‑20‑20 regime, introduced under former mayor Valérie Plante in 2021, required new developments over 450 square metres to dedicate 20% of units to social and affordable housing and 20% to family units, or pay into a city fund.
Developers argued the bylaw pushed projects to suburbs such as Laval and Longueuil instead of the island.
Montreal business groups and builders long pressed for “carrots, not sticks” in inclusionary policy, warning that the Règlement pour une métropole mixte delivered microscopic gains in social housing while depressing permit applications.
Advocacy organizations, by contrast, criticized past relaxations for allowing developers to pay cash instead of building on‑site social units.
City land and non-profit pipeline
Martinez Ferrada’s administration said it identified 80 municipally owned sites for off‑market and mixed‑use projects, claiming roughly 40 could see construction within three years. The full map is expected by March 1.
She added that $50 million in the city budget would support land acquisition by non‑profits, with loans of up to $3 million available through the Plancher Fund and an additional $30 million already allocated to discount city land.
“The city must be, and will be, a real, present, and financial partner,” Martinez Ferrada said. “Breaking down silos, working together, and delivering concrete and rapid results: that’s how we’re going to respond to the housing crisis, and it starts today.”
Broader pressure on supply
The shift came as Montreal’s rental vacancy rate, though easing to around 2.9%, still left affordable units scarce and rents climbing faster than incomes. CMHC data showed Montreal housing starts rising in 2024 and surging again in 2025, including a 58% jump in annual starts that was driven largely by record rental construction.
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