Proposed Regulatory Approach to Establish a Minimum Residential Lot Size in Urban Areas

The government is seeking public feedback on proposed legislative changes under the proposed Building Homes and Improving Transportation Infrastructure Act, 2026 and related regulatory changes to further support housing, economic, and infrastructure development, and advance key transportation and transit priorities.

As part of this initiative, the government is seeking public feedback on a proposed regulation under the Planning Act, if Bill 98 Building Homes and Improving Transportation Infrastructure Act, 2026  is passed, to set a minimum lot size of 175 square metres (approximately 1900 square feet) on parcels of urban residential land outside the Greenbelt Area. A parcel of urban residential land is defined in the Planning Act as a parcel within the settlement area of a municipality that is zoned for residential use (other than as an ancillary use) and is fully serviced by public sewage and water.

This regulation would foster conditions for increased housing supply and affordability in urban areas by helping facilitate the creation of smaller lots over time. This could lead to increased opportunities for home ownership in urban areas as smaller lots are generally more affordable.

This regulation and the proposed legislation that would enable it are not proposing that every new urban residential lot must be 175 square metres. Rather, they would mean that a municipality would not be able to require urban residential lots outside the Greenbelt to be larger through their zoning by-laws. Other considerations would continue to apply to decisions on land division applications, such as policies in the Provincial Planning Statement, 2024 that prohibit development (including lot creation) in certain circumstances. De plus, le pouvoir réglementaire se limiterait au zonage et ne s'appliquerait pas au contrôle des lotissements, et toute exigence de zonage municipale concernant la façade minimale et/ou la profondeur minimale qui empêcherait de respecter la norme de superficie minimale du lot serait inapplicable. Land owners would retain the ability to apply for the creation of larger or smaller lots through the land division process.

The authority for this proposal regulation is being consulted on concurrently as part of Bill xxx proposed Building Homes and Improving Transportation Infrastructure Act, 2026 that proposes changes to the Planning Act ERO #026-0300. 

Previous public consultation on the matter of minimum residential lot size in urban settings was held for 30 days from October, 23, 2025 – November, 22, 2025 in connection with the Fighting Delays, Building Faster Act, 2025 ERO #025-1100.

Impact on the Environment

The proposed regulatory changes are anticipated to have a neutral impact on the environment as municipal decisions must still be consistent with the Provincial Planning Statement and conform or not conflict with provincial plans. These documents set out provincial policy direction on matters including the protection of the environment. As part of this consultation, the government is interested in hearing perspectives on the proposed regulation that could lead to any unintended impacts on the environment.

Analysis of Regulatory Impact

Costs

The proposed regulation would result in one-time administration costs for municipalities related to learning about the proposed regulation.

The direct compliance cost for all 444 municipalities is estimated at approximately $472,856 and an average annual direct compliance cost of approximately $46,600. These one-time administrative impacts reflect staff familiarization and minor updates to internal planning guidance and workflows to apply the provincial minimum lot size.

No reporting, filing, fee, capital, or ongoing operational requirements are introduced, as the regulation is assumed to be self-executing (i.e., municipalities do not need to pass implementing zoning by-law amendments).

Benefits 

The proposed regulation would create the conditions to enable more affordable housing by providing opportunities to reduce the up-front cost of land. It would also improve predictability and consistency in minimum lot size requirements in urban residential areas across municipalities, supporting more efficient approvals and enabling additional housing supply within serviced areas. It would provide greater clarity for developers and landowners while creating opportunities for gentle density and infill. No ongoing regulatory burden on municipalities is anticipated.