Updating Apartment Regulations

Okay, good afternoon, Mayor and Council. I'm Edna Cho, Senior Planner in Housing Policy in PDS. I'll be presenting the work on updating apartment regulations.

I'll go over some background, the proposed changes, engagement findings, and our plan for implementation.

Policy direction for this work is from the Permit Improvement Program. Council approved simplified horizontal angle of daylight regulations last spring and directed staff to report back on options for allowing inboard rooms and ways to simplify storage and balcony requirements. As well, the December 2025 Development Viability Report directed staff to simplify apartment regulations and improve processing. This work focuses on apartments as it is the dominant form of new housing. Currently, apartments accommodate over 190,000 households, two-thirds of those households in the city, including singles, roommates, couples, families, and seniors. However, many current regulations are outdated, inconsistent, and complicated to implement. Our goal is to make it easier to build new housing and improve processing efficiency by setting minimum requirements that support the needs of a diverse range of households, while ensuring the requirements do not compromise the financial viability of new projects. So the changes proposed in this report... Specifically target apartments and townhouses with eight or more units. The key zoning changes are to remove FSR limits on balconies and shared amenities, standardized unit mixes, allow more flexible layout options like inboard rooms, and finally to simplify rules around residential storage while setting a clear baseline requirement. To make these changes, this report proposes to amend section 10 and 11 of the zoning and development bylaw, as well as a number of consequential changes to district schedules and policies. These zoning updates will work hand in hand with the new citywide design guide, which is the next item on the meeting agenda, ensuring our regulations and guidelines are aligned. So I'm going to go over the four changes, starting with the amenities and balconies. Our current regulations cap FSR exclusions at 10% for amenities and 8% to 16% for balconies, creating inconsistencies across zones. We heard from engagement that residents like and utilize these spaces and from industry that these rigid caps have actually forced poor design outcomes on some projects. To fix this, our proposed change removes these maximum limits entirely. This standardizes the review process and removes the restriction that makes it easier to build larger, potentially more desirable balconies and amenities.

The next change is standardizing our unit mix requirements. Our current regulations are highly inconsistent, varying across multiple policies, guidelines, community plans, and district schedules. While Strata and Broadway plan rental rezonings mandate a 35% two or more bedroom mix with 10% three bedrooms, other rental rezonings drop the three bedroom requirement entirely, and district schedules vary greatly, many with no mix requirements at all. Engagement highlighted a critical need for larger apartments, but severe affordability barriers persist in actually being able to afford those larger units. The average rent for a newer three-bedroom apartment has reached $4,000 per month, which requires an income of over $160,000 a year to afford, while pre-sale prices average $1.76 million, making three-bedroom units exceptionally difficult to afford.

So staff considered both short and long term implications of three bedroom requirements. In the short term, three bedroom units have become too expensive for most households to afford. In addition, industry feedback confirms that these larger layouts are harder to lease and less profitable than smaller studios or one bedroom units. And this is made worse by current market conditions where there is a need to support project viability so new developments and those within the existing pipeline can actually move forward and complete. However, looking at the long term, these units remain expensive precisely because they are so scarce. So while our three-bedroom rental stock has successfully doubled over the past decade, we are still catching up on decades of not building enough of them. So we must continue to increase this critical supply over time so we do not make the affordability crisis in these larger units even worse. So with that in mind, our proposed change introduces a simplified standardized unit mix across the city for all rezonings and development permits and will apply to all 10 years. So new projects must include 35% two-plus bedrooms with a minimum of five three-bedroom units. This update replaces messy rules with one simple and consistent one, making the application process more efficient and understandable. It also expands the requirement to some zoning districts in the city that aren't covered and have no mixed requirements at all. The 5% three-bedroom requirement strikes a careful balance. It allows us to continue growing our long-term supply of family apartments while directly addressing the reality that these units are exceptionally expensive for households to afford and highly challenging for builders to deliver. In addition, we will continue to have exceptions for seniors housing, supportive housing, housing in the downtown east side, and for constrained sites.

Next topic is inboard rooms. Under current regulations, all habitable spaces except washrooms, kitchens, and storage must have an exterior window. In 2025, Council approved changes to the horizontal angle of daylight to reduce regulatory complexity and directed staff to report back on the feasibility of allowing inboard rooms. Engagement revealed opposing viewpoints on the topic. Some people indicated they wouldn't want in-board rooms and were opposed to them, while others highlighted that these spaces are already being built and can actually improve livability, optimize layouts, and better utilize deep development sites.

So our proposed change allows more types of flexible inboard rooms for varied uses. However, we will continue to require a window for any bedrooms counted toward our unit mix requirement. So that means our two and three bedroom units will still require a window in each of the bedrooms.

The next topic is storage. Under current regulations, we incentivize storage with an FSR exclusion of up to 40 square feet per unit while securing a 25 square foot minimum through permit conditions. During engagement, we heard that dedicated storage remains highly desirable and important to residents. However, feedback also highlighted that the current rules are a great source of frustration for applicants because they're far too prescriptive, often leading to poor design outcomes that get used for other purposes after occupancy anyway. So our proposed change simplifies this by setting a flat requirement of at least 25 square foot of storage per unit located in or out of suite, counted directly in FSR. To offset this, we are introducing a standardized 6% FSR exclusion that can be flexible and used for any residential purpose. So the ultimate goal is to ensure residents actually get their storage while the industry maintains an exclusion they already rely on. As well, the change gives architects the creative flexibility to design better and more functional layouts.

As mentioned already, these regulatory changes will be paired directly with the updated guidance in the new CDDG, which is the next item on the council agenda. I've already covered the overall feedback by topic in the previous slides, but the next few slides will provide a brief summary of who we engaged with and how. So in fall 2024, we surveyed roughly 500 local apartment dwellers to understand their top priorities. Following that, in January 2025, we conducted technical interviews with industry stakeholders to see how our current regulations play out on the ground. Most recently, in March 2026, we hosted a dedicated session with about 30 developers, architects, and industry reps to gather direct feedback on these proposed regulations. Overall, our engagement highlighted some clear priorities and challenges. Apartment residents emphasized that unit size, layout, and outdoor spaces are critical, while those currently living with in-board rooms reported high satisfaction. Meanwhile, developers and architects emphasized that building under current market conditions is exceptionally challenging. They noted that our overly prescriptive regulations often conflict with consumer demand and hinder design flexibility, particularly regarding storage. So let's move on into implementation. So if approved by council, the new regulations will take effect upon bylaw enactment on October 27th, allowing for the intake of new and revised development permits. Additionally, active rezoning applications that have yet to be approved by council will be subject to the new rules at that time. To minimize disruption and respond to industry interest, recommendation B of the report retroactively applies the proposed updates to 37 active CD1 rezoning projects. This approach allows flexibility, enabling recently approved projects that have not yet reached the construction phase to either proceed uninterrupted under previous rules or voluntarily incorporate the new regulations. So looking ahead, staff will seek future opportunities to bring forward similar amendments to other existing CD1s. So in conclusion, this proposal accelerates housing delivery by introducing modernized apartment design requirements that meet the needs of a diverse population without compromising the financial viability of new construction projects. Thank you. That concludes the presentation. We have staff available to answer any follow-up questions you may have.

That's correct. That's right. And it can't be counted as a two-bedroom.

So it would just mean that you could enclose the sleeping area so your bed's not out in the open. So you could do that now. And it wouldn't be counted towards our bedroom requirement because we're only counting two and three bedrooms with proper windows.

No, like so a studio would stay a studio. It's just that now they could enclose like the sleeping area, which is commonly what people want to do. So your bed isn't out in the open with your living space.

You can't enclose it now. But now you would be allowed to under these new rules.

Yeah, that's a great question. And it is something that we as staff are also really concerned about. So in the report, we've indicated that we're going to be monitoring the impacts and the outcomes of these changes every six months. As well, through our regular annual progress report, we are always reporting out on the family mix. So we're going to be including the in-board rooms in there as well to report out on. So we're going to be tracking that as part of these changes and reporting out and monitoring every six months to see what's happening.