What Is The City Doing About Basement Apartments?

The Ever-Changing World of Copywriting

Are my blog posts too long?

Be honest. I promise, I won’t be offended.

When I started TRB in 2007, I was told by our expert web developer, who we found on Craigslist and met at Starbucks at Yonge & Wellesley, that a blog post should be about 200 words and my topic today on a basement apartment will be no different!

I said, “That’s insane.”

I was told not to reinvent the wheel, and that people have a very, very short attention span, and might not be able to get past 200 or even 300 words.

Ha!

That was 2007! If that’s true, then imagine what’s happened to attention spans since then? Frankly, I’m at word #104 right now, and I’m surprised most of you are still reading!

Eleven years later, I average over 2,000 words per post, and that’s honestly increased about 100 words per year, over the last five years. I’m not sure whether this is a blessing, or a curse, to be perfectly honest.

Ever since the newspaper went online, it feels like articles are getting smaller and smaller. Tell me if perhaps I’m just forgetting how much easier it is to scroll, than to read in print, but it feels oh-so-often like I’m only getting my feet wet in a given article, and then it ends, leaving me wanting more.

I feel this way even more when I’m reading an article about a topic in which I’m genuinely interested. It often feels like the surface has barely been scratched, or the piece lacked a response or a viewpoint from the other side, or there was just no depth to the article; merely a basic recap of a given event.

On Wednesday, I read a great article by Lauren Pelley of CBC News, titled, “Landlords, Housing Advocates Hope Council Loosens ‘Arbitrary’ Rules On Secondary Suites.”

Have a read if you’ve got an extra three minutes.

It’s girthy – almost 1,400 words! Yes, I counted the words, but as I said, I’m impressed by anything longer than 600 words these days.

In the article, we’re learning not only how the outdated, unaddressed rules on secondary housing affect homeowners (ie. the “colour” for the story – an actual person, with a name and a photo), the existing problem, the proposed solutions, and then the only thing that makes an article like this complete: the contrarian viewpoint.

Here’s the colour:

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.”

Call me a cynic here folks (it wouldn’t be the first time), but I see the words “legal rental,” and I laugh.

In the world of real estate, that’s simply an oxymoron.

We could never actually find accurate, quantifiable data on this, but as an agent, I would estimate that over 90% of all basement apartments in Toronto are illegal.

Maybe more.

It’s conceivable that 19 out of 20 basement “units” in the City of Toronto, no matter how you define them, whether basement apartment, auxiliary unit, nanny suite, granny suite, et al, are illegal.

Why the units are illegal, is a whole other story. It’s a whole other level of insanity!

To be quite honest, and at the risk of admitting naivety, I will say that I always knew basement apartments were difficult to legalize, not to mention expensive, but I didn’t know how expensive until I read a Toronto Star article by renowned Toronto lawyer, Bob Aaron, a few years back.

That was quite easy to find, here:

“Extravagant Fees Crush Legal Basement Apartments”

Mr. Aaron regularly writes for the Toronto Star about all things real estate, but it’s his columns on basement apartments that have really stuck with me over the years. I’ll put together a list at the bottom of the post.

In the article above, written in 2016, Mr. Aaron wrote:

In the face of a serious housing shortage in the GTA, the City of Toronto is actively discouraging homeowners from legally adding one or two units to their houses by making it financially unfeasible.

Last week I received an email from Ben, who explained his dilemma.

He wrote, “I bought a house with my son with the intent of living in it with my wife (both retired) on the ground floor and my son and his family on the second floor. My son is carrying a huge mortgage on his half of the house. We thought two basement apartments would help him with his mortgage.”

They hired an architect at considerable expense to prepare plans to add a rear addition so that the house would have four dwelling units with two side walkouts, a rear deck and a new detached garage.

That’s when the trouble began. After spending a great deal of money on architectural drawings, and another $5,000 to the city to apply for building permits, Ben was told that his application triggered four additional fees:

A development charge of $80,000 (that is not a misprint).

An education development charge of $4,500 which goes to the Toronto Catholic District School Board.

A parkland fee of $72,000 based on property value. and

A road damage deposit of $2,400.

Ben calculated the total fees payable to the city, including the $5,000 permit fee, at $161,684 just to add two units, all of which is payable before a shovel goes into the ground or any interior work begins.

There are those that will argue, “Hey, if you want something of value, you have to pay for it! Nothing in life is free!”

I hear that argument.

Except that, in my opinion, the applicant already owns the house, and has already paid land transfer tax, and continues to pay property tax.

An $80,000 development charge? A nonsense, made-up $72,000 “parkland fee?”

Don’t get me started on the fee to the Toronto Catholic District School Board. I wonder how the Buddhists, Jews, Muslims, Atheists, and Anarchists feel…

This is why most people don’t apply for that “holy grail” certificate that tells an owner of a Toronto home that their basement apartment is legal.

That, and because I’m sure that the certificate itself would come with charge.

And that charge would probably come with a fee in order to pay it, much like the $75 feet that the City of Toronto administers when somebody pays their hefty land transfer tax bill, but I digress…

I suppose I’m opening up the argument that, “If people don’t want to pay for something, then they should just do it illegally,” and we can see where that gets us. This applies to just about everything we do and see on a daily basis, and you can imagine where it would lead. Don’t want to pay to get your car past the legal standards? Just drive it and hope you don’t kill somebody. Don’t like the workers safety requirements? Just hope they don’t fall off the scaffolding and die! And on, and on, and on.

But even my opponents here would have to concede that when you look at that list above, they are simply fees, and nothing more. Development charge, education charge, parkland fee, road damage deposit, and a permit.

And as Mr. Aaron noted, that’s before ANY work has started.

So why would anybody build a legal basement apartment?

That was rhetorical, or at least meant to be. Because they answer is, “They wouldn’t.”

And that’s the problem that exists in Toronto today, one that the City of Toronto is looking to address.

Of course, my cynical side will point to the fact that as always, the government is acting slowly and, as the CBC article explains, “Holding public consultations.”

My issue is not the fact that the government is consulting the public, in fact, I wish the government did more of that.

My issue is that, all too often, the government develops a committee, to put a panel in place, to commission a study, to advise consultants to make recommendations to create reports, to blah, and blah, and blah. And they spend tens of millions of dollars, often creating new government jobs, and probably awarding contracts in the world of favour-trading.

Soooo…….will the topic of basement apartments in Toronto be any different?

The example in the CBC article above is just so ironic! Because the Ontario Liberals last year sought to end “short term” rentals, in that it removes a full-time, long-term rental from the market, and yet this example shows us a woman who can’t legally rent her basement unit out, so she’s AirBnB’ing it instead.

Oh the irony!

Kudos to Ms. Kanitz for undertaking this “legal apartment” venture, although here she sits, having played by the rules, and learning that the rules in place don’t allow her to gain what she sought.

I understand the rule in place to “maintain neighbourhood character,” but if you can tear down a bungalow, which undoubtedly is adorned by two other bungalows (or two other McMansions), then are you really maintaining any character? How does an unseen basement apartment in a 3,000 square foot house trump the 3,000 square foot house in place of the bungalow?

Unfortunately, this whole situation screams “grey area,” and that’s a problem unto itself.

We can’t expect the City of Toronto to step in and make a hands-on decision for every application, based on a thorough investigation of the property, the neighbourhood, and the request. That’s why we have “rules,” after all.

So will this come down to a battle? “Housing crisis vs. character and integrity of community?”

Or is there a happy medium?

–

Bob Aaron articles on basement apartments:

July 10th, 2010: “RECO Decision Heralds New Rules About Basement Apartments”

March 16th, 2012: “Basement Apartments Must Comply With Zoning, Fire, Building, and Electric Codes”

March 30th, 2012: “Basement Apartments Are A Minefield For The Uninformed”

October 3rd, 2014: “Agents On The Hook For Illegal In-Law Suite”

Written By David Fleming

David Fleming is the author of Toronto Realty Blog, founded in 2007. He combined his passion for writing and real estate to create a space for honest information and two-way communication in a complex and dynamic market. David is a licensed Broker and the Broker of Record for Bosley – Toronto Realty Group

Find Out More About David Read More Posts

22 Comments

Paully

November 9, 2018 at 7:44 am

It would appear that today’s blog post has a larger word-count than necessary, because the Bob Aaron clipping from 2016 has been inserted twice. Is that an error, or just a test to see if people are reading the whole post?

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1. A Grant
  
  November 9, 2018 at 7:48 am
  
  Ha – beat me to it. You’re right. David might be testing us
  
  Reply
  1. David Fleming
    
    November 9, 2018 at 10:11 am
    
    Thanks gents, I didn’t have my glasses – was seeing double late last night…
    
    Reply
A Grant

November 9, 2018 at 7:47 am

David – I find your posts about the right length – it helps that you’re a good writer.

That said, if you wanted to reduce the length of this post, you might consider deleting the duplicate Toronto Star article cited therein 🙂

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Ed

November 9, 2018 at 8:21 am

200-300 words on a blog post?
Sure that’s fine if you’ve got nothing to say.

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Derek

November 9, 2018 at 8:36 am

Wow those “fees” are insane. Someone needs to coin a term for legal corruption.

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Francesca

November 9, 2018 at 9:06 am

David I always enjoy reading your posts and don’t find them too long at all. I agree with other posters that you are a good writer!
As for the actual post I think it’s insane that it’s so hard and so expensive for people to legally rent out their basement suite. Then the city wonders why there are so many problems with AirBNBs in the neighbourhoods and why the rental pool is so low and so expensive for what is available. We are lucky that in Toronto homes actually have basements as in Vancouver it’s very rare for houses to have basements to add to the rental pool or to help out with mortgage payments. However having said that I do know there are a lot more laneway suites there. Speaking of laneway suites, the neighbourhood where I live in Markham (Cornell Village) doesn’t allow basement suites but many houses have coachhouses over their garages with laneway access that are easily rented and are adding between 100-150K value to homes. I know many people that have rented them out to senior parents, adult kids or strangers to help with their mortgage payments. Plus these people have the added benefit of having their own parking spot and not having to deal with any noise from the landlord since they are only attached to the house via garage. The only issue is the huge steep staircase leading upstairs to your suite which could be an issue for anyone with mobility concerns. If the city and the province wants to help deal with rising real estate prices why are they only adding to the problem with all the loopholes and fees? It seems counterintuitive!

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Kyle

November 9, 2018 at 9:42 am

This is a great blog post and i think it clearly illustrates the bureaucracy, hurdles and additional costs imposed by Toronto’s Planning Department, but there’s way more to the story.

If you want a build a legal apartment, in addition to those ridiculous costs imposed by Toronto’s Planning, your actual building costs are going to be A LOT higher than if you were finishing the basement for any other purpose. You have additional onerous Ontario building code requirements (which constantly change), Fire Department codes (which also constantly change and need to be complied with retroactively) and your property taxes will go up.

One other thing that you alluded to David, was the Planning Department’s, desire trying to preserve the “character of a neighbourhood”. Your argument is bang on here. If they were referring to the built form, when they use the word “character”, than new builds are a far bigger change to the character than basement apartments. So clearly it isn’t the built form that they are trying to preserve. Besides there are already a bunch of other sections in the code that govern the built form (e.g. minimum setbacks, stepbacks, maximum coverage, maximum height, etc).

So lets call a spade a spade, the “neighbourhood character” that they are trying to preserve is about the type of people who are allowed to move into the neighbourhood. This is basically institutionalized classism in it’s many various forms (e.g. wealthism, racism, ageism, religionism, etc.).

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Rachelle

November 9, 2018 at 11:51 am

The only inspection required should be a Fire Inspection with an investigator, who cares about safety and works for the Province. Fire alarms, egress, fire barriers, fire doors all good and necessary things and for most places under 2K maybe a bit more if you have to increase window size. Drywall is cheap, as are door skins.

All the bullshit about fees and double wide driveways and neighbors terrified of tenant germs, can just go suck an egg.

I’ve evicted so many tenants from affordable housing and units because of zoning issues ironically usually reported by tenants themselves… No one is going to pay you $80K in fees to rent out a basement for a $1000 a month unless they have rocks in their heads.

Every time John Tory talks about affordable housing, I just want to laughscream.

Reply
1. Izzy Bedibida
  
  November 9, 2018 at 4:10 pm
  
  Good points. I couldn’t agree more. Issues like these is why I have been investing in REITS instead of physical bricks and mortar.
  
  Reply
daniel b

November 9, 2018 at 12:16 pm

I’ve definitely found myself just scrolling past the typical 500 word folksy intro to these articles to get to the actual content. The “back in my day” and the inevitable “society is going to crap” components of the lead-ins are perhaps superfluous to the actual content of the article and definitely 100% repetitive as they now appear in most of them.

Love the actual topical discussions though… and willing to scroll through the front end fluff to get to it.

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1. Moonbeam!
  
  November 9, 2018 at 3:44 pm
  
  I disagree that with you about scrolling past the folksy intro, I always enjoy it. Otherwise I’d read Report on Business or an encyclopedia. David’s blog entertains, informs, and educates.
  
  Reply
  1. Jason
    
    November 9, 2018 at 6:56 pm
    
    I agree with David’s mother, I mean Moonbeam! 😉 I enjoy the blog in its entirety and I find a lot of the topics very relevant. As a real estate investor, the blog help me keep track of what’s going on in the market and changing tendencies.
    
    Reply
Joel

November 9, 2018 at 5:05 pm

I can see both sides of this. I am a mortgage broker and have seen a total of 2 legal basement suites out of hundred of basement apartments.

I also live on a a street with street parking. 6 of the 10 houses near me have more units than they are zoned for, which can make finding parking a real problem.

Currently a neighbour has moved a tenant into his detached garage with no lane way access. The city says it will take some time to remove the tenant. If the fees were more reasonable and enforcement more strict we could have more units and more tax money generated. With such high fees there is little incentive to apply.

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Alexander

November 9, 2018 at 5:14 pm

There is another dimension to basement apartment story – you are going to be taxed to death when you decide to sell your house with a legal apartment as this part is not considered owner-occupied and subject to capital gain tax. I actually do not see any incentives to rent my basement. At this point of life I’d rather renovate it and keep it as personal apartment to drop by if I go on traveling spree after all my kids are gone and rent everything above.

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1. Kyle
  
  November 9, 2018 at 7:44 pm
  
  Not necessarily, it depends on whether the apartment is of ancillary use or not. If it is ancillary (I.e. no structural changes were needed to make it, it is relatively a small portion relative to the whole house and you don’t claim capital cost allowances), then you can still claim the PRE.
  
  https://profile-en.community.intuit.ca/questions/1384579-capital-gains-on-primary-residence-with-rental-and-business-use-of-home
  
  Check with a professional Accountant.
  
  Reply
Roy Harper

November 10, 2018 at 12:29 am

Good post

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Patty

November 11, 2018 at 12:27 pm

Love your posts David and agree that too often I am left wanting more from magazine/newspaper articles. After all, aren’t most of us reading books etc on our devices in 2018? Don’t change!

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Frances

November 15, 2018 at 9:03 pm

David, your posts are long enough to make your point. Isn’t that what any article should do?

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Rick Aurora

November 16, 2018 at 9:39 am

200 to 300 words for a blog post is nothing that would work maybe as a preview but you cant tell a story in 200 words
Yonge and Davisville Condos

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Tomiwa

December 9, 2018 at 7:22 am

Hey David,
I’m a software engineering Intern at a real estate startup in downtown Toronto and just wanted to say I love your blog posts!

I commute from my parents home in the suburbs to work every day in the downtown core, with the goal of moving out and renting (or buying!) A condo downtown when I graduate university.

Your articles always give me valuable information and are very entertaining, keep up the great work!

Also, curious if there are any other readers in their 20s?

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Lisa Bartolo

August 7, 2023 at 10:42 am

Ok folks… gifted a bungalow in Etobicoke, want to rent up and build legal basement below… is the opinion , don’t do it?

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