Affordable housing is a growing concern in Waterloo, with many families struggling to find homes they can afford. As a developer, Build Urban supports policies that aim to increase access to housing, including Inclusionary Zoning (IZ), which requires a portion of new residential developments to include affordable units. At the same time, the timing and design of these policies are critical. Introducing IZ during a market downturn could unintentionally slow development, reduce overall housing supply, and delay the very units it is meant to create.
The reality is stark. Residential resale prices in the region have fallen by nearly 30 per cent since interest rates began rising in 2022. Construction costs surged during COVID, labour remains scarce, and tariffs on key materials like steel, glass, and HVAC components add new unpredictability. Access to financing is more difficult than ever, and buyer confidence is low. As a result, many projects are being paused or shelved entirely.
Home sales in the Waterloo Region have been significantly below historical averages. The total value of residential building activity in 2024 fell 39 per cent compared to 2023, and residential permits issued in the City of Waterloo were down 36 per cent from the ten-year average.
This slowdown has real consequences for housing supply. Apartment and condominium projects are critical for delivering rental units, family-sized units, and affordable housing. When these developments stall, the entire housing pipeline slows, exacerbating the challenges for residents seeking attainable homes.
Implementing IZ today, without regard for market conditions, would likely exacerbate this slowdown. Developers would face higher costs and risk at a time when projects are already financially stressed, potentially causing further project delays or cancellations. This would reduce the number of homes built — including affordable units — at exactly the moment the community needs them most. Buyer costs would also rise, placing additional pressure on new home affordability.
By contrast, a metric-based approach — tying IZ implementation to the ten-year regional average of 4,868 residential building permits — creates a more predictable and fair framework. It signals to both developers and policymakers when the market is healthy enough to absorb new requirements. This approach allows projects to continue moving forward, maintains housing supply momentum, and ensures that affordable units are actually delivered rather than simply mandated on paper.
This approach would provide clarity and stability for developers, buyers, and the community. By waiting for a market-based benchmark, IZ can be introduced at a time when developers can realistically meet requirements, ensuring that policies achieve their intended outcomes without unintentionally slowing housing supply.
Build Urban’s goal is simple: make sure planning policies like IZ work in practice, not just in principle. By tying implementation to real-world market indicators, Waterloo can create a sustainable path toward more affordable housing, ensuring that when the cranes return to the skyline, they are building homes that residents can actually access. Timing, as always, is everything.