March 25, 2025

On March 7th, the Ministry released a Comprehensive Guidance: Inclusionary Zoning and Density Bonus document. This is critical Guidance because “As of April 25, 2024, any changes to density benefits zoning bylaws must comply with new legislation.” Even if changes are not made to a municipality’s density bonusing bylaw, it would eventually have to conform to Bill 16. The date for this has not been established in regulation, but it will be no earlier than June 30th. 

The Provincial Guidance includes: 

• An overview of IZ and DB; 
• How both work in context of the other recent housing initiatives (e.g., proactive planning/pre-zoning, Housing Targets, Transit Oriented Development Areas, Small-Scale Multi-Unit Housing, Tenant Protection Bylaws, Amenity Cost Charges, Development Cost Charges, and Residential Rental Tenure Zoning); 
• How to conduct consultations as well as Financial Feasibility analyses; and  
• Administrative issues such as preparing and managing housing agreements; instream protections; phasing-in requirements; “Roles and Partnerships in Affordable Housing Ownership and Operations;” and ongoing reporting, monitoring and updating of IZ/DB bylaws. 

It is also noted in the Guidance that “The Province will be monitoring the implementation of inclusionary zoning and amended density bonus authorities to ensure that these tools are achieving the intended outcomes.” Several provincial regulatory powers are outlined throughout the document, and regarding IZ, it is stated that the Province “… has regulation making authorities to ensure intended outcomes are being achieved.” 

September 10, 2024

On August 23rd, the Province released interim guidance for local governments on Inclusionary Zoning (IZ) and Density Bonusing, as part of Bill 16. 

Inclusionary Zoning (IZ) 

This new mechanism allows local governments to require affordable housing as part of new residential developments without the need for rezoning. IZ bylaws will set out specific affordability requirements upfront, offering more transparency and predictability in the development process. While IZ is expected to be most effective in high-density urban areas, local governments can adapt these requirements based on local conditions. 

Key Points: 

• Local governments must adopt an IZ bylaw specifying the number of affordable units, pricing, tenure, and compliance timelines.
• They must consult with stakeholders, conduct financial feasibility studies, and reference the most recent housing needs reports when developing the bylaw.
• IZ bylaws can vary by location, site, and development type, and local governments may accept cash-in-lieu of affordable units or allow the units to be built off-site.
• IZ is available for use by most local governments starting April 25, 2024.  
• IZ cannot be applied to non-market housing developments owned by non-profits or BC Housing. 

Density Bonusing 

This existing tool allows developers to build at higher densities in exchange for providing amenities or affordable housing. Bill 16 updates the legislation to better align density bonusing with the new IZ framework and clarify its application. 

Key Points: 

• Local governments must consult with affected stakeholders, prepare financial feasibility analyses, and report annually on affordable housing and amenities secured through Density Bonusing.
• Density bonus regulations will be updated by June 30, 2025, when all density bonus bylaws must comply with the new legislative requirements. Local governments can continue using financial feasibility studies completed before this date to inform their updated bylaws.
• Density bonusing remains flexible, allowing local governments to agree upon affordable units off-site or accept cash-in-lieu for housing contributions. 

Protections for In-Stream Developments 

New or amended Inclusionary Zoning and Density Bonusing bylaws will not apply to development applications already in progress (in-stream) at the time of bylaw adoption, ensuring that projects under review are not affected by the updated regulations.