For decades, adding a secondary unit to a residential property in Ontario was a bureaucratic obstacle course. Rezoning applications. Public hearings. Months of waiting. Significant costs with no guaranteed outcome. The result was that most Ontario homeowners who wanted to add rental income, house a family member, or create a multigenerational living arrangement simply couldn't navigate the process.
Bill 23 — the More Homes Built Faster Act — changed that fundamentally. Understanding what's now permitted, what still requires permits, and how to navigate the process in the Kitchener-Waterloo region is the difference between a project that moves smoothly and one that gets stuck before it starts.
What Bill 23 Actually Changed
Bill 23, which received Royal Assent in November 2022, amended Ontario's Planning Act to establish a new framework for Additional Residential Units (ARUs) — the provincial umbrella term for secondary suites, garden suites, and similar configurations. The key shift was moving from a permit-and-approve model to an as-of-right framework.
| Aspect | Before Bill 23 | After Bill 23 |
|---|---|---|
| Zoning requirement | Zoning amendment often required — public hearing process | As-of-right on most residential lots — no rezoning needed |
| Units permitted per lot | Typically one secondary unit only | Up to three units total on qualifying lots |
| Parking requirements | Municipalities could require additional parking spaces | Municipalities cannot require new parking for ARUs |
| Development charges | Full development charges applied | Reduced or exempt development charges for ARUs (varies by municipality) |
| Building permit | Required | Still required — this has not changed |
Bill 23 removed the need for a zoning amendment. It did not remove the need for a building permit. A permit is still required for all ARU construction, and Ontario Building Code compliance is mandatory regardless of how the project is categorized. Any contractor who suggests otherwise is wrong.
What You Can Build: Types of ADUs in Ontario
Under the Bill 23 framework, most residential lots in Ontario's settlement areas — those connected to municipal water and sewer — are now permitted up to three total units as-of-right. Here's what that looks like in practice:
A self-contained unit within the existing home's basement. Requires separate entrance, proper egress windows, smoke and CO detection, and building code-compliant ceiling heights (typically 1.95m minimum). The most common secondary suite type in KW's older housing stock.
A self-contained unit on the main floor or above-grade portion of the home — often a converted addition or existing space. Particularly well-suited for multigenerational living arrangements where stair access is a concern.
A detached structure in the rear yard, purpose-built as a dwelling unit. Subject to setback requirements (minimum 4 metres from other structures under provincial rules, though municipalities may require more), lot coverage limits, and servicing requirements.
A detached or attached garage converted to a habitable dwelling unit. Requires full building code compliance — insulation, vapour barrier, egress, heating, electrical, and plumbing. Challenging in areas with attached garages but highly efficient use of existing structure.
A dwelling unit constructed above a detached garage. Requires structural assessment of the existing garage to determine if it can support an upper-level addition, or construction of a new garage-with-suite structure. Popular in larger suburban lots.
A detached unit fronting on a rear laneway or accessed via a side-yard easement. More common in older urban neighbourhoods with rear lanes — particularly relevant in Cambridge's heritage areas (Galt, Hespeler, Preston) with their traditional street patterns.
What "As-of-Right" Actually Means in KW
As-of-right permission means that if your property meets the provincial criteria — residential zone, municipal water and sewer services, within a settlement area — you are entitled to build up to three units without applying for a zoning amendment. The municipality cannot refuse on zoning grounds alone.
However, as-of-right is the provincial floor. Municipalities still control:
- Setback requirements — how close to property lines and other structures the ADU can be
- Maximum lot coverage — what percentage of your lot can be covered by buildings
- Maximum height limits — particularly relevant for above-garage suites and garden suites
- Design guidelines — some municipalities have architectural compatibility requirements
- Servicing capacity — if municipal water or sewer infrastructure is at capacity in your area, servicing an additional unit may require upgrades
In Kitchener and Waterloo, the cities have updated their zoning bylaws to comply with Bill 23 requirements. Cambridge has done the same. In Paris and Brant County, confirm current requirements with the County of Brant's planning department — the framework applies but implementation details vary.
The Build Process: From Decision to Certificate of Occupancy
Verify your property is on municipal water and sewer, confirm the number of existing units, and determine which type of ADU suits your lot and goals. A pre-application consultation with your city's planning department (free and informal) can clarify setback and lot coverage rules for your specific address.
For a building permit application, you'll need architectural drawings stamped by a licensed designer or architect. For simpler basement conversions, many municipalities accept drawings prepared by a qualified designer (not necessarily a full architect). For detached garden suites and structural additions, architectural drawings are required.
Submit drawings and completed application to your city's building department. In Kitchener and Waterloo, permit review times typically run 4–8 weeks for residential ADU applications. Ensure your contractor is named on the permit application and that all relevant permits are pulled — building, electrical (separate ECRA permit), and plumbing.
Municipal inspections occur at prescribed stages: framing, insulation, mechanical rough-ins, and final inspection. Your contractor must schedule and pass each inspection before covering the next phase. Do not let a contractor skip or defer inspections — the consequences fall on the property, not the contractor.
Once all work is complete and the final inspection passes, an Occupancy Permit is issued. Only at this point is the unit legally habitable and rentable. Renting an unpermitted unit creates significant liability as a landlord under the Residential Tenancies Act.
Financial Considerations
Development Charges
Prior to Bill 23, development charges added significant cost to secondary suite construction. Under the current framework, development charges are reduced or exempt for most ARUs in Ontario — but policies vary by municipality. Confirm with the City of Kitchener, City of Waterloo, or City of Cambridge before assuming a reduction applies to your project.
Realistic Cost Ranges in the KW Region
- Basement apartment conversion: $80,000–$180,000 depending on existing conditions, plumbing requirements, and finish level
- Garage conversion: $100,000–$200,000 depending on structural condition and scope
- Above-garage suite: $150,000–$280,000+
- Detached garden suite (new build): $180,000–$350,000+ depending on size and complexity
Costs vary significantly based on soil conditions (particularly relevant for new foundations), servicing requirements (connecting a detached structure to municipal water and sewer adds cost), and finish level. Get a detailed line-item quote, not a square-footage estimate.
Rental Income Potential
In Kitchener-Waterloo, one-bedroom units rent for approximately $1,600–$2,200/month (as of early 2026), with two-bedroom units ranging from $2,000–$2,800. A basement apartment yielding $1,800/month generates $21,600 annually. Factored against a $120,000 construction cost, that's a payback period of under 6 years — before accounting for property value appreciation.
Paris is served by municipal water and sewer, and the Bill 23 framework generally applies to residential properties there. Properties in rural Brant County on private well and septic systems operate under different rules. Septic system capacity is a binding constraint — you cannot add a legal dwelling unit if your septic system can't handle the additional load. Confirm your property's eligibility with the County of Brant planning department before investing in design work.
Common Mistakes to Avoid
- Assuming as-of-right means no permits needed. Zoning amendment is no longer required. Building permit absolutely is.
- Building without a permit and renting the unit. Unpermitted units create legal exposure as a landlord and liability at resale.
- Not checking servicing capacity before finalizing the design. If your municipal sewer line doesn't have capacity for an additional unit, you may need infrastructure upgrades — a significant cost that changes project economics.
- Choosing the cheapest contractor to maximize ROI. ADU construction requires code compliance at every stage. Unpermitted or noncompliant work costs more to fix than it saved to build.
- Not accounting for the landlord learning curve. If you plan to rent the unit, familiarize yourself with the Residential Tenancies Act before your first tenant moves in. Ontario's tenant protections are significant and apply from day one of occupancy.
Frequently Asked Questions
Under Bill 23 and the Planning Act amendments, most residential lots in Ontario that are connected to municipal water and sewer services are now permitted up to three units as-of-right: typically the main home, a secondary suite within the home, and one additional detached unit (such as a garden suite). No zoning amendment is required, but a building permit is still mandatory.
A secondary suite typically refers to a self-contained unit within the main dwelling — a basement apartment or in-law suite. An ADU or garden suite is a detached structure in the rear or side yard, separate from the main home. Both types count toward the three-unit provincial allowance. Ontario's Planning Act uses the term 'Additional Residential Unit' (ARU) to cover both.
Yes. Bill 23 removed the requirement for a zoning amendment — you no longer need to apply for rezoning on most residential lots. However, a building permit is still mandatory for any secondary suite or ADU. Permit applications are submitted to the City of Kitchener, City of Waterloo, or City of Cambridge respectively. Work done without a permit creates significant liability at resale and can void your homeowner's insurance.
Detached garden suites in Ontario typically range from $180,000 to $350,000+ depending on size, finish level, and servicing requirements. Interior secondary suites (basement apartments) are less expensive, typically ranging from $80,000 to $180,000 depending on existing basement conditions and finish level. Development charges may be reduced or exempt for ADUs — confirm with your local municipality.
Bill 23 applies to properties in settlement areas with full municipal water and sewer services. Rural properties on private well and septic systems operate under different rules — the ability to add an ADU depends on septic capacity, lot size, and local zoning bylaws. In Paris, which is served by municipal services, the Bill 23 framework generally applies. Confirm your specific property's eligibility with the County of Brant's planning department before beginning the design process.
Building an ADU or Secondary Suite?
Caliber Contracting has built secondary suites and ADUs across Kitchener, Waterloo, Cambridge, and Paris since 2007. We manage permits, inspections, and construction from start to certificate of occupancy.
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