June 21, 2021

Real Estate News


When Shelley Kanitz bought a small Toronto bungalow in 2016, she had two big plans for it: A massive renovation and a legal basement rental suite.

After spending nearly two years rebuilding the house from the ground up, Kanitz's family — including her husband and young daughter — finally moved into their new five-bedroom, six-bathroom Danforth-area home this March.

But getting city backing for the rental apartment proved a bigger challenge.

Kanitz had gutted the basement and transformed it into a separate suite with large windows, high ceilings, and two entrances, ensuring it met the city's criteria for a legal rental.

But she hit a major snag: The redesigned house was considered brand new, so it didn't meet a time-based zoning condition that only allows homes older than five years to have secondary suites."In the meantime, there's one less one bedroom apartment out there for someone who's looking right now," Kanitz said.

The mom and property manager is among those hoping the incoming city council will loosen current zoning regulations — which prohibit secondary suites in a certain types of dwellings in different areas of the city — to help both homeowners and tenants.

And there's growing hope for change: Throughout November, the city is holding public consultations across the city to share proposed plans to "simplify" the process, while hearing feedback from the public.

"I think that we need to begin to address the housing crisis in our city, and I think that loosening zoning in Toronto is going to hit it two ways," Kanitz said. "More affordable rentals for tenants, and the ability to qualify for mortgages for homeowners."

In Toronto, secondary suites like basement apartments have been allowed city-wide since 2000, and city planners say the current zoning reflects that landscape nearly two decades ago.
Rules barring the creation of extra rental suites in new homes came from a desire to protect neighbourhood character, and to ensure new-build duplexes didn't become the norm, said Klaus Lehmann, a manager with city planning who's in charge of zoning and the committee of adjustment.

A 2018 report to the outgoing council from chief city planner Gregg Lintern recommends removing the time requirement that's preventing Kanitz from renting out her suite to a long-term tenant.

The two-fold goal, he wrote, is to provide more incentive for the creation of secondary suites and to sync Toronto with provincial policy changes that support secondary suites across Ontario.

Since 2011, an average of approximately 1,700 in Toronto have been built each year, "which presents significant potential for additional secondary suites" if the time restriction is lifted, Lintern wrote.

There's also an urban-suburban divide in the current restrictions. While downtown townhouses are allowed to have built-in rentals, suburban townhouses aren't.

"Toronto's a much older city — the old City of Toronto — and the row houses were developed at a time when that was a very common practice," Lehmann said.

In the city's suburbs, where smaller townhouses were a relatively new phenomenon compared to larger family homes, allowing basement suites wasn't seen as a priority.

In his report, Lintern recommends permitting secondary suites in townhouses across the city while introducing a maximum amount of floor space for each unit, to make sure it's not the primary living space for the home-owner.

Coun. Ana Bailao, council's housing advocate, who was recently re-elected for another term in her downtown ward, is hoping the shift is given the green light from the public and council, given the city's current housing shortage.

The current restrictions, she said, make it more difficult to have a secondary suite than it should be.

"We need to change the policy to actually respond to the needs of our city," she added, noting around 70,000 families currently call secondary suites home, though not all of them are legal.

Loosening the rules could help increase the "gentle density" of Toronto neighbourhoods and provide much-needed rental stock, while allowing home-owners to gain extra income to afford the city's sky-high home prices, Bailao said.

Speaking to the media on Thursday, Mayor John Tory agreed the rules should be relaxed, including the five-year requirement.

"[Suites will] still be subject to approval, obviously, but they'll now be subject to approval on a universal basis," he said. "And I think it represents a very good opportunity for us to further increase the number of secondary suites that are available to rent across the city."

Not everyone feels it's that cut-and-dried.

Another restriction for adding a secondary suite is having an extra parking space, noted Coun. Stephen Holyday, who was also re-elected in his Etobicoke ward in October.

"Many suburban areas ... don't allow on-street parking," he continued. "How are you going to take care of the extra cars that come with the extra tenants? And how do you do that without annoying the neighbours?"

He also stressed other possible "unintended consequences" could arise from zoning changes, including changing neighbourhoods' character and creating tension between neighbours.

Affordable housing advocate Geordie Dent also questioned how much rental stock could actually be added by loosening the rules. Allowing more small-scale options like basement suites is beneficial, but not the "be-all-end-all," said Dent, the executive director of the Federation of Metro Tenants' Associations.

City numbers suggest he has a point. According to Lehmann, there may not be large gains to be made given how few people already have legal secondary suites when compared to people looking to do them "on the cheap."

Only around 2,000 people have applied to the city over the last 18 years since the suites were first permitted, he said.

More widespread city investment into building affordable housing, according to Dent, is a bigger necessity.

Since 2009 — and amid rising rents that have now hit more than $1,200 on average for a one-bedroom unit in the GTA — the city's goal has been to approve 1,000 affordable units annually.

That target was only hit for the first time last year. Even so, Tory is promising to beef up the city's housing stock significantly by building 40,000 new affordable housing units over the next 12 years.

But striving to add more legal secondary suites by simplifying the process should remain part of that discussion as well, maintained Kanitz, who hopes the city ends its "arbitrary" time restriction.

In her case, since she's legally barred from renting out her basement for the next five years, she's using it to house Airbnb guests and international students instead.

So far this year, she's had a rotating assortment of short-term renters from Brazil, Mexico, and Japan.  She said although she makes twice as much money as she would renting to a Toronto tenant, she would rather offer the unit to someone who needs a long-term home.

"These are people that don't work in Toronto, they don't pay taxes to Canada, and they're displacing — in my opinion — someone who lives in Canada ... who would otherwise probably love to live downstairs," Kanitz said.

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