Housing affordability is a significant concern for homebuyers and sellers alike. The federal government of Canada has proposed innovative solutions to tackle this issue, one of which is encouraging the construction of three and four residential units per lot. But in Ontario, the implementation of this strategy varies by municipality. This blog post will explore where in Ontario you can build these multi-unit residences and what it means for homebuyers and sellers.

The Push for Housing Affordability

The soaring costs of housing have left many Canadians searching for viable solutions. Recognising this, the federal government introduced the Housing Accelerator Fund in its 2022 budget. This fund aims to incentivise local governments to increase housing supply, including the development of four-unit multiplexes. However, the uptake of this initiative has been inconsistent across provinces, particularly in Ontario.

Ontario's Stance on Four-Unit Multiplexes

Premier Doug Ford's administration has taken a more cautious approach towards the widespread adoption of four-unit multiplexes. Instead of a blanket approval, Ontario has left the decision up to individual municipalities. This decentralised approach means that the ability to build a fourplex is highly dependent on your city's regulations and policies.

Triplexes Across Ontario

While four-unit multiplexes face varying levels of acceptance, triplexes have been universally mandated across Ontario. This provincial mandate allows homeowners to build up to three residential units on a single lot, including detached houses, semi-detached houses, and townhouses. However, the response to this mandate has been relatively low. Investors often find that triplexes do not generate enough rental income to make the venture financially viable.

Toronto's Progressive Approach

Toronto has been at the forefront of encouraging the development of four-unit multiplexes. The city has implemented policies to cut municipal development charges, thereby making it financially appealing for investors to build these units. This approach not only increases the housing supply but also makes it more affordable for renters and homebuyers.

Mississauga's Initiatives

Mississauga has also adopted a progressive stance, allowing four multi-family units across the city. Similar to Toronto, Mississauga has reduced municipal development charges, making it an attractive option for developers and investors. This move is part of a broader strategy to address the city's housing needs while promoting sustainable urban growth.

Burlington's Application to the Housing Accelerator Fund

In August 2023, Burlington submitted its application to the Housing Accelerator Fund, seeking approximately $40 million. The approval of this application is expected to be contingent on the city's willingness to allow four units-as-of-right on residential lots. This proactive step aligns with Burlington's commitment to increasing its housing stock and making it more affordable for residents.

Bill 23 and its Implications

In November 2022, the Government of Ontario passed Bill 23, which brought significant changes to the Planning Act. This legislation allows two Additional Residential Units (ARUs) on urban residential lots with detached houses, semi-detached houses, or townhouses. Consequently, homeowners across Ontario can now build up to three residential units per lot, paving the way for more flexible and affordable housing options.

Burlington's Policy Updates

To comply with the provincial changes mandated by Bill 23, Burlington updated its Official Plan and Zoning Bylaw Additional Residential Unit policies. These updates are part of the city's broader Housing Strategy, aimed at aligning with provincial goals while addressing local housing needs.

Other Cities Following Suit

Several other cities in Ontario are also working to make multiplex development attractive to investors. By cutting municipal development charges and offering other financial incentives, these cities aim to increase their housing supply and make it more affordable for residents.

Financial Incentives for Investors

One of the primary reasons for the low uptake of triplexes is the insufficient rental income they generate. To address this issue, many municipalities are offering financial incentives to encourage the development of four-unit multiplexes. These incentives include reduced development charges, tax breaks, and grants, making it financially viable for investors to build and maintain these units.

The Role of the Housing Accelerator Fund

The Housing Accelerator Fund is a critical component of the federal government's strategy to increase housing supply. By providing funding to local governments, this initiative aims to remove financial barriers and expedite the development of multi-unit residential buildings. Municipalities that align their policies with the fund's objectives stand to gain significant financial support.

Community Impact

The development of three and four-unit multiplexes has far-reaching implications for local communities. These units can help address housing shortages, reduce rental costs, and promote diverse, inclusive neighbourhoods. For homebuyers and sellers, this translates to more affordable housing options and a more competitive real estate market.

Challenges and Considerations

While the benefits of multi-unit residential developments are clear, there are also challenges to consider. Zoning regulations, community opposition, and infrastructure limitations can all pose obstacles to the widespread adoption of this housing model. It is essential for municipalities to engage with residents and stakeholders to address these concerns and find mutually beneficial solutions.

Conclusion

The push for three and four residential units per lot is a promising solution to Ontario's housing affordability crisis. While the provincial mandate allows for triplexes across the board, the decision to permit four-unit multiplexes lies with individual municipalities. Cities like Toronto, Mississauga, and Burlington are leading the way by offering financial incentives and aligning their policies with provincial and federal goals.

For homebuyers and sellers, this initiative presents new opportunities and challenges. By staying informed about local regulations and market trends, you can make strategic decisions that align with your housing needs and investment goals.

To explore more about the potential of multi-unit residential developments in your area, consider speaking with a real estate expert or joining a community forum. Together, we can work towards a more affordable and sustainable housing future for all Ontarians.