July 15th 2020
Some time ago, the Government identified two distinct problems within the housing sector in Ontario which they set about to rectify. The first was availability. In many municipalities in the province, especially around the Golden Horseshoe rental units were extremely hard to come by. Vacancy rates were at or below 2%. Good for landlords. Not so good for tenants.
The second issue involved affordability. Throughout the Province many if not most municipalities had experienced substantial price increases in real estate. People who owned their homes were ‘house rich’, unfortunately at the same time many 
were ‘cash poor’. Especially hard hit were seniors on fixed incomes, often a sole surviving spouse trying to hang on to the family home, but finding it extremely difficult with utility costs, taxes, repairs and maintenance and perhaps even a mortgage to service, all on very limited pension income. So what the Government did, was to allow anyone living in their home, whether detached, semi-detached, or townhouse, to create and rent out a secondary dwelling unit, regardless of zoning. And this became law for all municipalities throughout the province. They become known as “Granny Flats”.
This was not popular in all municipalities, but really they had no choice. What they did have, however, was the power to regulate this new use in their by-laws. Some municipalities embraced the idea seeing it as an easement of what was a current housing shortage. Others felt it was a blurring of zoning distinctions and therefore they added restrictions. In St. Catharines, for example, the By-Law reads, “One interior accessory dwelling unit is permitted in any detached dwelling, semi-detached dwelling unit or townhouse dwelling unit provided the following:
The 60m2 restriction equates to about 633 sq ft. Adequate for a 1 br apartment, but not so much for a 2 br unit. Often I have encountered these units in the lower level of semi-detached dwellings and they tend to occupy the full basement less stairs, furnace and laundry room. A 633 sq ft limit might be pushing it, but most municipalities with this type of restriction are not likely to show up with tape measure in hand.
One provision that does apply and is important is fire retrofit legislation. Personally, I am not terribly concerned about self-closing devices on doors, but two things that are extremely important, especially in bedrooms, are smoke and CO detectors and windows. And let me be clear. A room below grade without a window large enough to crawl out of cannot be a bedroom. It can be a den, study, hobby room. But not a bedroom. The thought is if someone awakens in the night to the smell of smoke, opens their door and is greeted with a wall of flame, they have to have a way out and no window in a bedroom does not provide that. As a ‘landlord’ you can’t afford to put anyone in this type of high risk situation.
But the other thing I want to point out is that even though this legislation sounds like we have created a ‘duplex’, in fact we have not. I believe it is a great idea for a homeowner; seniors on limited income or single parent perhaps. It provides available cash that goes a long way toward carrying the cost of occupancy. But this is not a situation for an investor. Exactly like the ‘home based business’ it is predicated on the idea that the owner occupies the dwelling. As soon as it changes hands and an investor who will not be residing in the property takes ownership, all bets are off. Now in order to lawfully continue, it must be zoned for duplex or recognized as legal non-conforming.
I think this is important to understand. I’ve seen a number of properties, especially semi-detached, due to more appealing price point being configured with granny flats and sold to investors. Be careful. That stream of additional income, while secure and reliable to a home-owner may not be quite as reliable once two arm length tenants occupy the property.