More multi-storey buildings could be coming to Nanaimo through what's being called 'overlay zoning', which would allow developers to bypass zoning restrictions on some properties if 20 per cent of available units were subsidized. (Image Credit: File photo/NanaimoNewsNOW)

By Alex Rawnsley

developer options

Nanaimo pursuing ‘overlay’ zoning to encourage affordable housing builds

Jan 27, 2026 | 5:29 AM

NANAIMO — The City is aiming to remove a few layers of red tape to encourage more affordable housing units to be built.

Councillors have unanimously supported the idea of overlay zoning for over 2,000 properties situated in urban centres or along urban corridors in Nanaimo, creating an option for developers who acquire properties and want to build multi-storey housing.

City of Nanaimo planner Kasia Biegun said the overlay option would exist if a minimum of 20 per cent of the planned units were reserved for subsidized, or affordable, housing.

“The intent is that a developer or property owner can still develop under the underlying zoning, however, they can voluntarily take the option to develop under the overlay zone, where the applicant would be permitted to increase in density and-or height in exchange for providing social housing units.”

No current zoning would be affected, with the overlay simply acting as an option if desired.

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Projects using overlay zoning would also need to meet set criteria linked to the owner of the land, the organization running the property once complete, and capital funding.

A definition of “affordable” is not included in the City’s direction, due to the range in funding sources and programs, according to Biegun.

The program would also focus on rental-first buildings, something which Biegun said addresses a major need in Nanaimo.

Areas in red would allow for buildings upwards of 12 storeys, while purple and pink areas would be limited to six storeys. (Image Credit: City of Nanaimo)

Presenting the concept, which has been adopted in seven other B.C. communities, at the Monday, Jan. 26 Governance and Priorities meeting, Biegun said removing the need to re-zone a property can be a significant bonus for developers.

“The need to rezone a property can be a regulatory barrier to the delivery of affordable housing. The reason being, is affordable housing projects rely on external government funding to be viable, and the time and cost to proceed through rezoning can impact the viability of a project.”

Under the overlay zoning, properties around an urban centre such as Country Club Centre, Woodgrove or the downtown, would be eligible to be upwards of 12 stories high, provided the affordable housing component is met.

Properties along urban corridors such as Bowen Rd., Terminal Ave., Nicol St. and Wakesiah Ave. could see six-storey buildings permitted without re-zoning.

Specific bylaws and amendments are due before Council this spring.

Biegun said the scope of the project would be limited to urban centres and corridors for now. However, should a pilot project prove successful, other property types could be added in.

In the first round, roughly seven per cent of parcels in the City of Nanaimo would be included in this overlay zoning.

Properties around Country Club Centre are just a handful of parcels set to receive an overlay zoning in a big to encourage more housing units, specifically affordable ones, to be built. (Image Credit: City of Nanaimo)

Coun. Paul Manly endorsed the idea, saying it would remove a considerable wait for developers who meet the required criteria.

“When senior levels of government are announcing funds for affordable housing, we want to have projects that are shovel-ready and this speeds up the process by not having developers and organizations have to jump through the hoops of zoning.”

Public and stakeholder engagement will take place through February, with staff due back to Council afterwards for final approval.

An interactive map of the proposed properties to be overlay-zoned is available here.

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