Investing in a laneway suite is an opportunity to increase the value of a property in Toronto’s red-hot real estate market, while also encouraging purpose-built construction of rental units. In the interest of making this more affordable for homeowners, the City of Toronto has introduced two financial support programs:
This program provides funding in the form of a forgivable loan of up to $50,000 for property owners developing a laneway suite. The loan will be forgiven in 15 years from the date when the 1st tenant occupies the suite.
The rent being charged cannot exceed the City of Toronto Average Market Rent by bedroom type during the 15 year affordability period.
The DC Deferral Program allows for a 20-year deferral of development charges for property owners developing a secondary dwelling unit (such as a laneway suite). This requires a Development Charges Deferral for Ancillary Secondary Dwelling Units Agreement with the City.
The agreement requires that property owners maintain the secondary unit as a rental unit (rather than sever the land and create a new property) for 20 years from the date the building permit is issued. The development charges covered are according to the Statistics Canada’s Quarterly Construction Price Index, and the year of the permit issuance.
Connect with a local laneway housing developer. You will need to contact a specialized laneway housing developer that can provide you with a detailed property analysis, create drawings and other supporting documents.
Gather supporting documents from your laneway housing developer, and apply for a building permit. As mentioned above, your laneway developer will take care of the logistics. You will need to apply for a building permit with the City of Toronto and include these supporting documents.
Sit tight, and wait for City approval. The City will review your application, determine conditions and/or permissibility of the overall concept. This step typically involves a bit of back-and-forth. Thankfully, our mapping system greatly reduces this timeline as it is capable of flagging potential barriers and/or conditions of permissibility, informing your application before it is even submitted. Once cleared in a preliminary hearing, you will have to post Public Notice signage to inform your neighbours on what cool things are happening!
Get your official building permit, and start building! Once your application circulates and is granted approval by the Zoning, Building, Forestry, Engineering, Municipal Numbering Departments, you can then begin construction.
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