Density Bonus

Learn about density bonuses in Canadian real estate — how they work, what benefits they require, and their role in urban growth.

Density Bonus

July 27, 2025


What is a Density Bonus?

A density bonus is a planning incentive that allows developers to build more units or additional floor area than zoning normally permits, in exchange for providing community benefits.

Why Density Bonuses Matter in Real Estate

In Canadian real estate development, density bonuses encourage developers to support public policy goals such as affordable housing, parks, or enhanced urban amenities.



Community benefits that may qualify:
  • Affordable or below-market units
  • Public parks or recreational facilities
  • Streetscape improvements or transit-oriented features



Understanding density bonuses helps developers maximize site potential while municipalities achieve planning objectives.

Example of a Density Bonus in Action

The developer received a density bonus allowing two additional storeys by including affordable rental units in the condominium project.

Key Takeaways

  • Provides additional development rights
  • Requires public benefits in return
  • Encourages affordable housing and urban amenities
  • Negotiated with municipal approval
  • Supports smart growth policies

Related Terms

Additional Terms

Public Realm Improvements

Public realm improvements are enhancements to public spaces such as sidewalks, parks, plazas, and streetscapes, often funded or contributed by. more

Mortgagee in Possession

A mortgagee in possession is a lender who takes control of a property after borrower default, but before foreclosure or power of sale. The lender. more

Lease Surrender Agreement

A lease surrender agreement is a negotiated contract between a landlord and tenant that ends a lease before its scheduled expiration. Terms may. more

Green Infrastructure

Green infrastructure refers to natural or engineered systems that manage stormwater, reduce heat, and improve sustainability in developments.. more

Escrow Holdback

An escrow holdback is a portion of funds withheld at closing and held in escrow until specific conditions are met, such as completion of repairs,. more

Underused Housing Tax

The Underused Housing Tax (UHT) is a federal annual 1% tax on the value of vacant or underused residential property owned by non-resident,. more

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