The demand for affordable housing continues to rise in towns, cities, and regions across the Province of Ontario. Intensification is aimed at increasing urban density; keeping people closer to their workplaces, desirable amenities, transportation services and other City infrastructure.

“Second Suites,” "Basement Apartments," and “Duplex Conversions” as they’re commonly referred to in Real Estate Investor circles, are an excellent opportunity to create more affordable housing while also providing a solid return on investment.

I call that WIN-WIN for everyone.

It’s no surprise that this investment strategy has been increasing in popularity over the last several years in Ontario while real estate prices continue to surge year after year with no end in sight.

It’s all very exciting, but let me ask you one simple question; what’s happens when you purchase a property that you haven’t done any homework on and realize that you cannot add a second suite? What then? l I hope you had another solid exit strategy in that case.

You see, not all properties are created equal. Some are sitting there ready and waiting for this investment strategy, and others are not. So, how do you know?

This 3 Phase system I’ve put together will tell you everything you need to know BEFORE you make you submit an offer on that property you’ve been eyeballing.

If you’re serious about adding this investment strategy to your repertoire. Using my three phase system, I’ll cover how to filter properties, what to look for when visiting these properties, and what it’ll take to make it happen before making you make that offer.

There’s a lot for me to cover.

I hope you’re ready!

Phase 1 – Filtering Properties

I’ll begin by discussing the five main criteria to create your shortlist of ideal properties. All of the information I’m about to share can be found without having to visit a property.

Zoning Requirements
Your 1st Step is ensuring that creating an additional dwelling unit is permitted on the property and there are several ways to obtain the information.

1. If you are represented by a real estate agent they will be able to assist you.

2. The majority of City’s have an interactive zoning map available on their website. A Google search with the City’s name followed by “Interactive Zoning Map” is a quick way to find the correct webpage. Once you’ve opened the interactive zoning map there will be a “search by property address” feature.

3. You can call or email the City’s Planning or Building Department(s) to provide you with the necessary information.  

Parking Restrictions 
Step 2 is confirming that the property’s parking layout complies with the Municipality’s Zoning By-Law. The parking requirements may vary from one Municipality to the next, so verify this information and do not make assumptions. Some cities and towns will have a webpage or downloadable brochure summarizing second suite must-haves.

Others, you’ll have to review to the Zoning By-Law document. A Google search with the City’s name followed by “additional dwelling units”, “accessory dwelling unit”, or “second unit” is a quick way to find what you’re after. Alternatively, call or email the City’s Planning or Building Department to assist you.

In most cases, the Municipality will require a minimum of one parking space for each unit on a lot; either in tandem or side by side configurations. Look out for these:

1. Number of parking spaces

2. Measurements of parking spaces

3. Configuration of parking spaces (ie: side by side or tandem)

4. Is widening or lengthening of the existing driveway permitted

5. Are there physical objects (ie: hydro pole, fire hydrant, tree, sidewalk, etc.) that impede “D”

Setbacks
Step 3 is to look at the front, back and side yard property lines, in proximity to the primary structure or accessory structure. The distance from property line to structure will determine the total allowable size of unprotected openings. In the Ontario Building Code it is calculated as a percentage of unprotected openings multiplied by the total wall surface area. The greater the setback from the property line, and the greater the wall surface area, the greater percentage of unprotected openings allowed.

I will go into more detail about unprotected openings in Phase 2. For now, just know that a minimum setback of 1.2 m (4 feet) is required to have any unprotected openings.

Lot Size
If you are planning to add an accessory structure (ie: Garden suite) to a property, the Municipality may have restrictions in place. Normally, it is a maximum allowable area expressed as a percentage of the total lot area. This is to preserve neighbourhood aesthetics and landscaping for storm water management. Ensure you fact check the Zoning By-Law by using one of the previous methods described.

Unit Sizes
Step 5 is meant to serve you in your Return on Investment calculations and later in the design phase. How? Well, restrictions on the maximum allowable size of a second suite, or total number of bedrooms could limit your cash flowing potential. The restrictions may be shown in one of the following ways:

1. The second unit must be smaller than the primary unit

2. The second unit cannot exceed a maximum square footage

3. The second unit must be a smaller percentage of the gross floor area

4. A combination of maximum square footage and percentage of gross floor area, the lesser of which must be used.

Verify these restrictions, so you do not miscalculate a property’s income generating potential.

Before concluding Phase 1, I’ll leave you with this… If a property you’re interested in does not quite tick all of the boxes in Steps 1, 2, 4, and 5 it is possible to apply for a minor variance to the city’s Committee of Adjustment, or region’s Land Division Committee. Consulting an experienced professional familiar with this process is highly recommended. They can save you money and time if there is a risk the application will not be approved.

Phase 2 – Visiting Properties  

Okay, you’ve now narrowed down your search and created a shortlist of desirable properties. The following Steps will cover the Ontario Building Code. These are must haves if you want your permit application approved, plain and simple. There is a ton of subject matter here, so don’t worry if the terminology seems daunting. It is, until applied. Get comfortable. Let’s begin!

Room Sizes
In Step 1 I’ll be going over spatial design. What is spatial design? The Ontario Building Code stipulates dwelling units are required to have a full kitchen, full bathroom, living room, dining room, and sleeping area(s). Of those rooms, it further dictates what minimum sizes for each of them. The table below shows these in imperial… And metric if that’s your thing.    

A Bathroom must be sufficiently sized to accommodate a water closet (toilet), lavatory (sink), and bathtub or shower.
*The reduced Living Room and Kitchen sizes can only be used in Units not exceeding two Occupants. Meaning the reduction applies to Bachelor and 1 Bedroom Units only.

Transferring this information into a comfortably sized floor plan that would be desirable to tenants, the unit types and square footages below can be used as a guide:

• Bachelor/Studio Unit – 450 square feet

• 1 Bedroom Unit – 525 square feet

• 1 Bedroom + Den Unit – 600 square feet

• 2 Bedroom Unit – 675 square feet

• 2 Bedroom + Den Unit – 750 square feet

• 3 Bedroom Unit – 825 square feet

Ceiling Height
One of the most important aspects to verify when visiting a property is minimum ceiling heights.  Clearances could vary significantly depending on the property’s age. Keep this in mind when walking through a property. You must take into account floor and ceiling assemblies, and material thicknesses. 

1. Properties aged five years or less must have a minimum clearance of 2100 mm (6’-11”) over at least 75 percent of the finished area. Areas under beams and ducts and exit routes are exempt require a minimum clearance requirement of 1950 mm (6’-5”).

2. Properties older than five years must have a minimum finish to finish ceiling height of 1950 mm (6’-5”). If beams and ducts are less than 1950mm (6’-5”) clearance, you have to determine if a flush beam or pancake duct will achieve clearance requirements.

Lastly, if the clearance between concrete slab and underside of the floor joists is not working with either of the above it may be time to move onto the next property. If the numbers work, you can consider underpinning. But if you don’t verify the clearance or the numbers you’ll be burning a substantial hole in your wallet.

Entrance(s)/Exit(s)
For Step 2, the property you want to be looking at is of an age where an existing exterior side or rear entrance is common. Why? These layouts are often a split level or raised bungalow which main and lower levels can be separated with minimal work. If there is an existing entrance you can repurpose the minimum width of 810 mm (32”) and height of 1980 mm (78”) is required for egress by the Ontario Building Code.

It’s okay, if there is no existing entrance/exit. You can add one if the numbers work. A front shared entrance, new side/rear entrance, garage entrance, are some of the options you can play with.

Important Note: The Municipality may not allow a second front entrance to preserve the neighbourhood’s character.

Windows
Back in Phase 1 we briefly touched on property line setbacks and their relation to unprotected openings. Step 3 takes it to the next level. First off, what are unprotected openings? They are non-fire-rated openings in an exterior wall (ie: double pane windows). Why does that matter? In the event of a fire these measures are designed to limit the fire spreading to abutting structures. Hence, the 1.2 m (4 ft) minimum setback I brought up in Phase 1.

Digest what I’m about to explain because you’ll need know them when visiting a property. Note, the term unprotected openings and windows will be synonymous throughout this section.

1. Setbacks – In a suburban setting the front and back yard setbacks will predominantly be greater than the side yards, so the side yards are the primary focus of this section. The Ontario Building Code allows a fixed percentage of windows based on the distance from the property line to the exterior wall, and the walls surface area.
   
   The greater a setback, and the greater the surface area, the greater the percentage.
   
   Measuring the total surface area of that wall and multiplying it by the percentage from the Ontario Building Code equals the total area of windows permitted. Review the table below and come back to this section. It will make a lot more sense.

2. Egress (Exiting) – At minimum there must be two means of egress in a lower level (basement) second suite; an entrance/exit door, covered in Step 3, and an egress window. In most cases, this window will be an unobstructed opening of not less than 0.35 m2 (3.8 sqft) with no dimension less than 380mm (15”). Egress windows must also operate without the use of tools as stipulated in the Ontario Building Code.

3. Window Wells – If situated below ground level, existing windows or new windows will need an adequately sized window well.
   It must be offset 550 mm (about 22”) from the foundation wall where an egress window opens into the unit.

   • It must be offset 550 mm (about 22”) from the window sash, when fully opened, where an egress window opens outward.

   • It must stay within the property line boundaries. It cannot encroach onto a neighbouring property.
     *Note: some Municipalities may request a 39” offset rather than the 22” in the Ontario Building Code.

4. Natural Light – The Ontario Building Code specifies that there must be a sufficient amount of natural light entering each room unless otherwise noted. The age of the property will determine the natural light requirements which I’ve summarized below.

The unobstructed glass area of a door or skylight is considered an equivalent to that of a window.
* Rooms not requiring window must have an electrical light source.

5. Natural ventilation – A property with a mechanical ventilation system is not subject to natural ventilation requirements according to the Ontario Building Code. The windows in the Natural Light section, when operable, are likely to satisfy all natural ventilation requirements.
   At minimum, bathrooms must have an exhaust fan for ventilation if a sufficiently size operable window is not installed.

Congratulations! If you’ve come this far then you made it through Phase 2 and the Ontario Building Code information overload.

Navigating all of these compliance requirements can be challenging, so don’t sweat it if you find yourself uncertain about any of these topics. Seeking advice from a qualified third party professional is always recommended regardless of your renovation experience. Remember, Infinite Design Services is here to help!

Here is a link to an online copy of the most up to date version of the Ontario Building Code: https://www.ontario.ca/laws/regulation/120332

Phase 3 – Post Visit Review  

So, you’ve completed your property walkthrough and determined that it checks all of the boxes. It meets all of the Zoning and Municipal By-Law requirements.

The Ontario Building Code has been cracked… You’re ready to go right…? Well… Yes and No.

There are a few more things that you need to be aware which will factor into your renovation plans. Know them before setting your renovation budget.

Fire Separation and Fire Protection
Understanding the Ontario Building Code’s and Ontario Fire Code’s fire separation and fire protection requirements ensure the safety of occupants in each dwelling unit. It’s not a key metric in whether you choose to buy a property or not, but you should understand why these requirements exist. In this section let’s aim to simplify it by covering the basics.

1. Fire-Rated Wall and Ceiling Assemblies – A property with two dwelling units is required to have a continuous fire separation between the units. A fire-rated assembly of 30 minutes is the minimum. When units have interconnected smoke alarms, which sound simultaneously when one is activated to notify the occupants of both dwellings, the assembly can be reduced to 15 minutes. Here are some examples of material fire-ratings for your reference.

   • 15 Minute – 1 Layer of ½“ drywall

   • 30 Minute – 2 Layers of ½” drywall

   • 30 Minute – 1 Layer of ½” Type X drywall

2. Room(s) with a fuel burning appliance – The only room that may remain unfinished following a few provisions is the Furnace/Service/Utility Room. Those provisions are:

   • Minimum 20 minute fire-rated wall assembly

   • A self-closing 20 minute fire-rated door

   • Sprinkler protection in lieu of a continuous fire-rated ceiling assembly

3. Fire Protection – Firstly, existing units are required to have smoke alarms equipped with strobes installed in a dwelling unit on every floor and outside of sleeping areas to comply with the Ontario Fire Code. Secondly, new or renovated units require a smoke alarm equipped with strobe in each bedroom, in addition to the locations mentioned above, to comply with the latest version of the Ontario Building Code. Finally, Carbon Monoxide alarms must be installed in each dwelling unit outside of sleeping areas if the property contains a fuel burning appliance (ie: furnace, hot water tank, etc.) or attached garage.
   
   Fortunately, there are several manufacturers that produce combination devices with smoke, carbon monoxide, and strobe all in one unit.
   
   Something not often heard of that is required when you have two units is an in-duct smoke detector. Its purpose when activated will turn off the furnace electrical and natural gas systems to slow the movement of smoke through the ductwork. Some municipalities may take this one step further by requesting fire dampers be installed in supply and return ducts where they penetrate the floor assembly.

4. Inspections – The Electrical Safety Authority must review all completed electrical work to ensure compliance with the Ontario Electrical Safety Code. The ESA inspector will issue a Certificate of Acceptance if the work passes.  Your electrician will be responsible for contacting the Electrical Safety Authority to submit a Notification of Work, and book inspections.
   
   A Fire Marshall / Prevention Officer will complete a post-construction inspection of the premises to ensure compliance with the Ontario Fire Code for the safety of unit occupants. During this inspection they may request a Certificate of Acceptance. You or your contractor will be setting up this Inspection.

Acoustics
You not only need to comply with a continuous fire separation, but also adequate sound separation. Per the Ontario Building Code the minimum sound transmission class rating between dwelling units is STC 50. There are many material combinations that will meet or exceed the minimum STC requirements. Common ceiling assemblies that will meet both fire separation and acoustical requirements include:

• Absorptive material (ie: mineral wool insulation) in joist cavity, 1 layer of resilient channel, and 1 layer of 5/8” Type X drywall.

• Less absorptive material (ie: mineral wool insulation) in joist cavity, resilient channel and 2 layers of 1/2” standard drywall laminated with Green Glue.

Many other assemblies and material combinations exist to achieve the required acoustical performance. For example, laminating an additional layer of 1/2” or 5/8” OSB with Green Glue to the upper unit’s subfloor will boost the acoustical performance. There are also a plethora of underlayment options on the market to reduce sound transmission; all with their own unique properties. Always factor in that more layers will increase the overall assembly thickness and may impact your finish to finish ceiling height. Plan accordingly.

My final recommendation is to duplicate the layout of each unit whenever possible. Having the lower unit’s bedroom beneath the upper unit’s living room, kitchen, or bathroom is not a recipe for a good night’s sleep.

Building Envelope, Mechanical & Electrical Systems  
This section covers important questions you should ask yourself or when consulting with an experienced third party professional. They will affect the scope and cost of your renovation.

1. Building Envelope (Exterior)

   • Are there any signs of water penetration or water damage?

   • What does the water management system look like? This includes grading, downspouts, eavestrough, etc.

   • Are there cracks in the foundation walls or signs of moisture? A white appearance on the exposed concrete, known as efflorescence, is a sign of moisture problems.

   • What is the condition of the roof? Do you know when it was last replaced?

   • What is the condition of the caulking around doors, windows, vents, etc.?

2. Plumbing

   • Is the incoming water supply sufficiently sized for new plumbing fixtures and appliances? A 3/4″ or 1″ supply inlet from the street should be sufficient.

   • Should I add a second water meter to monitor water consumption?

   • Should I add a backwater valve to prevent possible sewage backup? Some Municipalities require it.

3. HVAC

   • Will the existing HVAC system sufficiently support heating and cooling a second suite? The HVAC system is typically designed using heat loss calculations for all conditioned (interior) spaces already.

   • Should I add a second gas meter, so the Units operate independently and tenants deal with the local gas company directly?

   • Should I add a second HVAC system? Furnace, Hot Water Tank, Radiant heating?    

4. Electrical

   • Is the existing electrical service 100 Amp or 200 Amp? A house with existing 100 Amp service may not be sufficient when adding a second suite due to the additional consumption

   • Should I add a second hydro meter and subpanel, so the Units operate independently and tenants deal with the local hydro company directly?        

All of these questions are worth asking now, as they will need to be answered later when breaking down the renovation scope of work and budget.

BONUS – What’s Next?

Unfortunately, you’ve come to the end of our comprehensive guide.

You are now equipped with the tools to evaluate properties and take advantage of the value-add opportunities that second suites bring.

If you would like to know more, A “How To” Guide for Second Suites in Ontario contains my step by step blueprint covering everything from finding a property up until the completion of construction. Check it out, you won’t be disappointed!

And as a lovely parting gift, I’ll leave you with a quick reference checklist highlighting all of the elements I’ve covered today.

If you need assistance on any of the topics covered, remember, Infinite Design Services is here to help.

Phase 1 – Filtering Properties
Municipal Zoning and By-Laws
1. Property Zone
2. Parking Requirements
3. Front, Rear, Side Yard Setbacks
4. Lot Size
5. Unit Size
6. Possibly Licensing (not covered)

Phase 3 – Post-Visit Review
Renovation Scope of Work
1. Fire and Sound Separation
2. Building Envelope
3. Plumbing
4. HVAC
5. Electrical

Phase 2 – Visiting Properties
Building Code Compliance
1. Rooms Sizes
2. Ceiling Heights (remember age)
3. Entrance(s)/Exit(s)
4. Windows