Coach Houses and Secondary Units: New Opportunities for Ontario Homeowners

With recent legislation and financial incentives in Ontario, secondary dwelling units, also known as accessory dwelling units (ADUs) or coach houses, are becoming increasingly attractive options for homeowners in Ontario. Ontario is “Helping Home buyers, Protecting Tenants Act” mandates municipalities to permit up to three residential units per lot in specific dwelling types, including detached houses. This update supports "gentle intensification," allowing homeowners to create rental opportunities and support the broader housing needs of the community, while also offering financial benefits.

Advantages of Secondary Dwelling Units

Secondary units can provide supplemental income through rental opportunities, making homeownership more affordable and allowing homeowners to offset mortgage payments. These units can be used as housing for aging family members, grown children, or as affordable rental spaces, adding flexibility and functionality to a property. Secondary dwellings also utilize existing infrastructure and support a more sustainable approach to urban development.

For Peterborough, which has been grappling with a shortage of affordable rentals, secondary units could alleviate some of this pressure by expanding the rental pool in a cost-effective and community-focused way. This aligns with the city’s goals of intensifying housing options and creating inclusive, affordable housing opportunities.

Financial Support and Tax Incentives

Ontario offers substantial financial support to encourage ADU construction, including forgivable loans. For instance, through the Ontario Renovates program, homeowners may qualify for up to $50,000 in interest-free loans for constructing or retrofitting secondary suites, provided they meet specific eligibility requirements, such as household income caps and rent controls on these units. Additionally, units built under this gentle intensification plan are exempt from certain development charges, which lowers the overall cost of adding an ADU.

Key Restrictions and Requirements

While adding a secondary dwelling is simpler than before, certain restrictions still apply. Peterborough and other Ontario municipalities require that secondary units adhere to zoning by-laws, including parking provisions, unit accessibility, and Ontario Building Code requirements. These standards cover safety concerns like fire protection, egress, and structural integrity, and a building permit is necessary for compliance. The Act also limits the number of units per property, allowing up to three in the main building if no other units exist on-site, or up to one additional detached unit with certain layout configurations.

Steps to Build a Secondary Dwelling

1. Confirm Zoning and Eligibility: Check if your property meets zoning requirements for an additional dwelling. In Peterborough, resources such as the Additional Residential Units Guide can provide information on zoning and municipal specifics.
2. Obtain Permits and Comply with Codes: A building permit application must be filed, covering structural and safety standards outlined in the Ontario Building Code.
3. Apply for Financial Aid: If eligible, apply for forgivable loans or subsidies under Ontario Renovates or similar programs, which may reduce construction costs.

By adding a secondary dwelling, Ontario homeowners can both support the local rental market and add value to their properties, making this a beneficial investment for themselves and the community alike.

Happy building!