from single-family to multi-unit: how to add more units without breaking the code

It's always an exciting day in the real estate investment community when a municipality opens the door to higher-density construction in previously restricted areas. This was the case when Ontario passed Bill 23 in 2022, effectively requiring all municipalities to allow up to three units on each residential lot. However, the process of adding more units isn’t as straightforward as it may seem. We can't just start squeezing additional units in wherever we want.

Fortunately, the City of Ottawa has removed many of the limitations it previously had regarding additional units—also known as secondary units, in-law units, nanny or granny suites, rental units, or investment units. But even with these relaxed regulations, we still need to comply with the Ontario Building Code's safety and construction standards, which aren't always in perfect harmony with municipal allowances.

For instance, while the City of Ottawa may view a single-family dwelling with two additional units as simply that—a house with two more units—the Ontario Building Code categorizes it differently. According to the Building Code, a single-family home with two additional units is considered a multi-family dwelling, which comes with stricter requirements. This distinction limits the use of certain compliance alternatives that are typically available for single-family homes.

So, what's the catch with adding more units? The higher the density, the more stringent the Building Code restrictions become. More units mean more people, which increases the risk of something going wrong. One of the biggest challenges is meeting the egress requirements. With just two units, it was often possible to use an existing window as an additional egress. However, with three or more units, each unit ideally needs its own entrance, or if a shared entrance is used, each unit needs an additional exit. If there’s only a shared entrance, two exits should be provided so residents can escape in different directions in case one exit is blocked.

The challenge is that properties originally designed as single-family homes often lack the space to meet these additional requirements. To address similar constraints, British Columbia is amending its Building Code to allow residential buildings up to six stories to have only one staircase for egress, provided there are sprinkler and smoke alarm systems in place. This innovative approach aims to alleviate the housing crisis by allowing for higher-density buildings on smaller urban lots. Other provinces might consider similar adjustments in the future, but for now, we must navigate the balance between municipal regulations and Building Code requirements when seeking to maximize the potential of a property.

In summary, while recent regulatory changes have opened up opportunities to add more units to residential lots, they also come with greater responsibilities and stricter requirements. Understanding the nuances of the Building Code and careful planning are essential for anyone looking to enhance their property's value. Staying informed and adapting to these evolving regulations allows us to seize new opportunities in the real estate market while ensuring safety and compliance. If you need further guidance or assistance with designing investment properties, feel free to contact us.