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Markham's New Rental Housing Incentive — What It Means for Renters, Investors, and Supply
Behind the towers and communities being proposed across Markham sits a policy question: how does a city actually encourage the rental housing it needs? Markham Council's new rental incentive is one answer.
What is Markham's new rental housing incentive? Markham Council approved an enhanced rental housing incentive to encourage purpose-built rental construction. It lets qualifying long-term rental projects defer up to 50% of city-wide soft development charges (via a standardized scoring system based on affordability, accessibility, and sustainability), and extends the building-permit deadline for eligible projects from Dec 31, 2026 to Dec 31, 2027. The goal is more rental supply during challenging market conditions — though some developers question whether it goes far enough.
Behind the towers and communities being proposed across Markham sits a policy question: how does a city actually encourage the rental housing it needs? Markham Council's new rental incentive is one answer — and it has real implications for renters, investors, and the city's future supply. Michael John Lau, a top real estate agent in Markham and a CPA/CMA, explains.
What Council approved: A new framework letting qualifying long-term (purpose-built) rental developments defer up to 50% of their city-wide soft development charges, using a standardized scoring system. It also extends the deadline for eligible projects to obtain building permits by one year — from December 31, 2026 to December 31, 2027. The stated goal: encourage more purpose-built rental housing during challenging market conditions. Details per public reporting of the council decision; confirm specifics with the City of Markham.
What the Incentive Actually Does
Defers development charges for rental projects
Development charges are significant upfront costs builders pay. By allowing qualifying purpose-built rental projects to defer up to 50% of city-wide soft development charges, the city reduces the upfront financial burden — improving the economics of building long-term rental housing, which is often harder to finance than condos.
Uses a standardized scoring system
The framework replaces the city's previous project-by-project approval process with a standardized scoring system. Projects are evaluated on factors including the percentage of affordable rental units, the length and depth of affordability commitments, accessibility, sustainability, and other community benefits. The more a project delivers on these, the more it can qualify for — a transparent, incentive-aligned approach.
Extends the permit deadline
The one-year extension (to December 31, 2027) gives eligible projects more time to obtain building permits and still qualify — important given how challenging current market conditions have made it to move projects forward.
Why Now? Challenging Market Conditions
The timing reflects a real challenge. Building purpose-built rental housing has become harder: construction and financing costs are high, and — as covered in our look at Markham's rental market — market rents have softened, squeezing the economics of rental projects. Some developers have found projects that once penciled out no longer do. The incentive is designed to help bridge that gap and keep needed rental housing moving forward during a difficult period. It connects directly to the rental projects emerging around nodes like Yonge & Steeles.
An Honest Note: Not Everyone Thinks It's Enough
In fairness, the policy drew debate. Some developers told Council the incentive may not be large enough to meaningfully change development decisions — arguing that the cost of reaching the scoring thresholds could exceed the value of the deferral, and that qualifying projects should receive larger (even full) deferrals. Others raised concerns about the balance between incentivizing developers and protecting the city's interests. This is a genuine, ongoing debate — and a reminder that housing policy involves real trade-offs. The incentive is a meaningful step, but views differ on its scale.
What It Means for You
For renters
Policies that encourage purpose-built rental construction — including affordable units — support more rental supply over time. More supply is generally positive for renters, expanding options and helping moderate rental costs, though the effects unfold over years.
For investors
The incentive shapes the rental development landscape, supporting purpose-built rental projects around Markham's transit nodes. For investors, understanding the policy environment — and the wave of purpose-built rental supply it may encourage — is useful context for the rental market. (Note: these incentives target purpose-built rental developers, a different arena than individual investor-owned condos.)
For the city
The incentive is part of Markham's broader housing strategy and its provincial pledge to add 44,000 new units by 2031. Encouraging rental housing — a segment that's been undersupplied — is a key piece of addressing the city's housing needs.
For homeowners
More housing supply and rental options contribute to a healthier, more balanced housing ecosystem over the long term — part of a functioning city where people at different stages can find housing.
The Bottom Line
Markham's enhanced rental incentive is a policy response to a real problem: the difficulty of building needed rental housing in today's conditions. By deferring development charges and extending deadlines for qualifying purpose-built rental projects, the city aims to keep rental supply moving forward. It's a meaningful step, even as debate continues about whether it goes far enough — and it's part of the broader story of how Markham is trying to add housing across all types.
Michael John Lau, one of Markham's leading REALTORS® and a CPA/CMA, brings a genuinely analytical perspective to how policy, development, and market forces shape Markham real estate — helping clients understand the bigger picture behind the headlines. If you want to understand how these dynamics affect your plans as a buyer, investor, or renter, let's talk.
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Michael John Lau, REALTOR® CPA, CMA, brings an analytical lens to how policy, development, and markets shape Markham real estate. Let's talk about what it means for you.
Michael John Lau is a licensed REALTOR® and CPA/CMA at Kaizen Real Estate (eXp Realty), Licence #4784577, serving Markham and York Region. Policy details are based on public reporting of a City of Markham council decision and are subject to change; confirm specifics with the City of Markham. This is general information, not investment, financial, or legal advice. Not intended to solicit clients currently under contract with another brokerage.
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