Council may identify an area within the municipality as an area to be examined for designation as a Heritage Conservation District, often in response to local neighbourhood initiatives.

The Ontario Heritage Act requires a study of the area, which provides background to the historical, architectural and character-defining features that make the area special. Design guidelines are also developed for the proposed area. Extensive consultation takes place with the community. After the study is completed and consultation with the Toronto Preservation Board has occurred, City Council may pass a by-law that establishes the Heritage Conservation District and implements the District Plan.