Building for Our Future: How Toronto's New Zoning Laws Can Help Families Stay Close to Home

A rare window has opened in Toronto’s housing landscape, and it’s one we cannot afford to miss. With the city's recent zoning reforms—permitting four-unit multiplexes and garden suites on every residential lot in the city, and up to 60-unit apartments on major streets—opportunities abound for creating diverse and affordable housing options. These changes present a generational chance to ensure that young families can establish roots close to our places of worship and schools, and are within walking distance of their parents and grandparents, preserving the close-knit fabric that has long defined our community.

Embracing the "Missing Middle"

Historically, Toronto's residential zones have been dominated by single-family homes, limiting the availability of varied housing types. Zoning applications are costly, resulting in most tower development being concentrated in a few areas, with the remainder of the city only occasionally seeing single-family homes redeveloped as a larger single-family home.

Recognizing this, the City of Toronto launched the Expanding Housing Options in Neighbourhoods (EHON) initiative to encourage the development of "missing middle" housing: multiplexes and small apartment buildings that offer larger, ground-oriented homes at attainable prices.

Changes to citywide zoning started in February 2022, with permission granted to construct a garden or laneway suite on every residential lot. In May 2023, multiplexes of up to four units were permitted citywide on residentially zoned lots. As of July 2025, the city has taken steps to upgrade permissions to allow six units per lot, but only in the Toronto and East York planning district, as well as Ward 23 (Scarborough North). In May 2024, significant changes affected Toronto’s “major streets,” (as identified on Official Plan Map 3) permitting apartment buildings of up to 60 units in residential neighbourhoods along those streets. The zoning by-law amendment and official plan amendment that would implement the major street policy is currently under appeal with the Ontario Land Tribunal, and will only take effect once the appeal concludes.

These reforms aim to meet the growing demand for housing that accommodates a range of family sizes and income levels. Similar policies have been adopted, or are under consideration, across Ontario.

This means there is a high possibility of more attainable homes in high-amenity areas where single-family homes have become too costly to consider. The newly permitted buildings also enable multi-generational living, where grandparents, parents, and children can reside in separate units while staying close to one another, fostering stronger familial bonds and community ties.

Opportunities for Community-Centric Development

These zoning changes open doors for community members to invest in housing projects that reflect our values and needs. By developing properties that cater to families at different life stages, we can ensure that our neighbourhoods remain vibrant, inclusive, and livable.

Such initiatives not only provide attainable housing options but also reinforce the communal infrastructure—schools, places of worship, and community centres—that support our way of life. Simply put, our institutions need young families, and young families need homes.

Challenges

While the enhanced permissions are positive across the board, the devil is always in the details. Zoning by-laws contain a number of challenging restrictions, which mean that projects may require a minor variance (permission from a Committee of Adjustment for an exception to the general by-law) or may simply never get off the ground. Setbacks from the front, rear, and sides of a proposed building mean that the buildable square footage of a lot may be significantly smaller than expected at first glance. Lot coverage maximums further reduce the buildable area, often capping it at 50 percent or less.

On the construction side, the current building code requires buildings with more than two stories and multiple units to have two exits—meaning two staircases within the same building. In small buildings, this can take up a significant percentage of each floor and reduce floorplate efficiency. The North American elevator code also poses a challenge, mandating larger and costlier elevators than the European equivalent. These factors have pushed developers into built-forms that avoid these problems—designing multiplexes and stacked townhouses that have individual, at-grade entrances with no shared staircases or elevators.

Development charges (DCs) and taxes present another hurdle. DCs can exceed $100,000 per unit and 13 percent HST is levied on each sale (or to the self-supply of a new rental unit). However, there has been some relief. The City of Toronto has eliminated DCs for projects with four or fewer units. The Federal Government has recently implemented a GST rebate program (with Ontario and other provinces joining in) for the self-supplied rental units that began construction after September 13, 2023, and are substantially complete by 2036. The Federal Government has also announced a GST rebate for new housing units under $1.5 million; however legislation is still pending, and it is unclear whether the provincial governments will participate.

Strategic Investment for Long-Term Benefits

Investing in housing aligned with the new zoning laws is not just a community service; it's a strategic financial opportunity. Properties that offer multi-unit dwellings are increasingly in demand, promising steady returns for investors. Rental projects may qualify for the MLI Select program through the Canada Mortgage Housing Corporation (CMHC), which offers lower rates and extended amortization periods for projects that meet social criteria, such as energy efficiency, affordability, or accessibility. But take caution—CMHC modifies MLI Select terms regularly, making long-term planning a challenge.

Alternatively, investors may choose to develop units for sale by registering the project as a condominium. This path allows families to buy into the community and make long-term commitments. Registering a condominium does require a significant upfront cost and co-ordination with professionals across legal, planning, property management, and surveying—which are all requirements that may not be required for rental projects. When building new units (rather than renovating an existing building), investors will also have to register with the Home Construction Regulatory Authority, and enrol the units with Tarion, the warranty corporation for new homes.

A Call to Action

The evolution of Toronto's housing policies presents a historic opportunity to shape the future of our neighbourhoods. By embracing these changes, we can create inclusive, attainable, and culturally resonant neighbourhoods that allow our families to thrive together.

If you're sitting on a single-family home in Toronto, the zoning now creates an opportunity; but realizing the potential of your property requires thoughtful planning and sound advice. Whether you’re a homeowner, investor, or looking to enter the market, consider speaking with a legal real estate professional. They can help you to understand your rights, navigate the development process, and ensure that your project aligns with current regulations and long-term goals.

Let's seize this moment to invest in developments that reflect our values, support our families, and strengthen our community for generations to come.

About the Author

Ben Singer is an associate at Schneider Ruggiero Spencer Milburn LLP, specializing in commercial real estate. He advises developers, commercial landlords, and lenders across Ontario with a focus on the missing middle.

This article is for general information purposes only. It is not intended to provide legal advice or opinions of any kind. For legal services, please feel free to reach out at bsinger@srlawpractice.com or via LinkedIn.