Accessory Dwelling Units in Ontario: What's Changed and What It Means for Landlords

Ontario's changes to accessory dwelling unit permissions have expanded what's possible. Here's a current overview.

Property Management in Ontario

Ontario's government has actively worked to increase housing supply, including through changes to accessory dwelling unit (ADU) permissions. These changes have expanded what landlords and investors can do with existing properties.

As-of-right permissions: Ontario's More Homes Built Faster Act (Bill 23) and subsequent legislation require municipalities to permit as-of-right secondary and tertiary residential units on residential lots. This means additional dwelling units no longer require rezoning in most cases.

Key Responsibilities and Best Practices

Types of ADUs: the legislation permits three residential units on most residential lots — the primary dwelling plus two additional units, which may include a basement apartment, a garage suite, a garden suite (laneway house), or a secondary suite within the primary structure.

Building permit requirements still apply. Provincial permissions don't eliminate building permit requirements — structural, plumbing, electrical, and HVAC work all require permits. The provincial change removes the zoning barrier, not the building code barrier.

How D&D Property Management Helps

Garden suites (detached secondary residences in rear yards) are now permitted in most Ontario municipalities following provincial direction. These units can be purpose-built or manufactured structures meeting building code requirements.

Financial considerations: ADU construction typically costs $150,000-400,000+ depending on complexity and size. The rental income must justify this investment — calculate actual break-even on projected rent before proceeding.

Regulatory verification: while provincial direction is clear, municipalities retain authority over setbacks, lot coverage, height, and design standards. Verify your specific municipality's current requirements before beginning ADU planning.

Devon Moore, Operations Lead Co-Founder & Operations Lead — D&D Property Management

Devon Moore is the co-founder and Operations Lead at D&D Property Management, managing rental properties across Kitchener-Waterloo, Cambridge, Guelph and Waterloo Region.