Toronto is undergoing a transformative shift in its approach to housing development, and at the heart of this change are new, as-of-right sixplex zoning bylaws approved by Council in June.
7 units (sixplex plus laneway/garden suite) are now permitted as-of-right!
The EHON (Expanding Housing Options in Neighbourhoods) initiative has resulted in monumental steps towards creating more diverse, affordable, and sustainable housing options within established neighbourhoods. Toronto is overcoming its single-family monoculture, and allowing families of all shapes and sizes to fulfill their ownership and rental needs.
The new sixplex bylaws attempt to advance that effort, but while their intentions are good, there are downstream consequences that developers need to be aware of. They also contain geographic limitations and restrictive details put in place by NIMBY Councillors.
Sixplexes will not apply equally to all properties. There are critical details you need to be aware of. Fortunately, you have come to the right place! Here is what we are seeing.
Pitfalls and Challenges of Sixplex Development
While the opportunities presented by sixplexes are immense, it is crucial to acknowledge the pitfalls and challenges that will be encountered. The new bylaws are not synchronized with other policies. Design and approvals strategies need to be optimized, as they significantly affect costs and construction complexity.
- Development Charges: Changes to the zoning bylaw have not been harmonized with the development charge bylaw. The exemptions and deferrals available for fourplexes and laneway/garden suites do not apply to sixplexes. If you apply for a sixplex permit, you will be paying development charges on 5 units, and if you apply for your laneway/garden suite out of sequence, it might not be eligible for development charge deferral. Phasing strategies must be employed so you only pay for incremental units above 4. These are easy to do, but critical planning is necessary.
- Ramps and Elevators: A January 2024 change to the Ontario Building Code has added provisions for ramps, elevators, and clearances that substantially reduce efficiency in buildings of 4 units or more. It is possible to avoid these if the units in the building are configured properly. With adequate planning, more bedrooms and lower construction costs are possible, even in multiplexes of 6 or more units.
- Wood Frame Construction: It is currently possible to build fourplexes out of wood framing, which is fast, low-carbon, and low-cost. Often, sixplexes require non-combustible construction. This usually means steel studs and concrete, which add significant cost and trade complexity. Moreover, phasing units to avoid development charges will often trigger new combustibility provisions in subsequent permits, so phasing has to be carefully orchestrated with future building code provisions. Understanding these impacts in early design stages will help you budget appropriately and make informed decisions.
- Financing and Feasibility: The CMHC’s MLI Select program has become a key tool for missing middle developers. But you won’t be able to get a CMHC loan until all of your units are permitted. Phasing units to avoid development charges can affect this, and a clearly understood phasing strategy will help ensure your financing solutions are optimized for the project.
- Geographic Limitations: NIMBY councillors from the periphery of Toronto restricted sixplex permissions to Toronto / East York wards only. Our firm is still seeking permissions for sixplexes (and more) through the Committee of Adjustment when context permits. Keep in mind, if your site is in Etobicoke, Scarborough (except ward 23), or North York, you will probably need to seek minor variances. Feel confident, though. City of Toronto planning staff almost always support it.
- Committee of Adjustment: As-of-right approvals are excellent for developers who seek speed. Many of our clients, however, are happy to spend time seeking outsized density – even beyond the new sixplex permissions. This often includes severances, 4th storeys, reduced setbacks, and other enhancements that will improve the economics of infill development.
- Bedroom Limitations: Large sites can accommodate very large units as-of-right. But new regulations limit the number of bedrooms per unit to 3. So even if zoning allows you to construct large, family-friendly units, you will have to hide the number of bedrooms to avoid Committee of Adjustment. For example, our Church Street project, a fully as-of-right multiplex intended to be sold individually as condominiums, would now require minor variances, simply because it offers 4 bedroom units.
Overcoming Obstacles and Asking for More
Not all sixplex projects are created equal. We have been meticulously studying the new bylaws and evolving our long-standing strategies to unlock the full potential of this new bylaw. Here are three strategic elements to contemplate:
- Avoid Development Charges: It is easy and fast to take advantage of DC exemptions and deferrals, even when constructing a multiplex with 6 or more units. Absolutely never pay for the first 4 units, and never pay for laneway/garden suites! It is a massive cost, and the policies are in place to incentivize missing middle development. Take advantage of it. But also make absolutely sure that your approvals and construction are executed to accommodate it without triggering the need for additional construction provisions or barrier free units. We design our projects to have all units constructed simultaneously, accelerating occupancy timelines. We have developed a checklist that helps you analyze the impacts of DC avoidance so you can quantify it in your proforma at the outset.
- Avoid Common Space, Second Exits, Ramps, and Elevators: It is possible to design sixplexes (or even larger multi-unit buildings) so that they are 100% leaseable, with no need for lifts, ramps, or elevators. Efficient layouts and site plans are critical on small sites, and the building code has exemptions that allow missing middle housing to avoid the needs that would otherwise apply to larger multi unit buildings.
- Optimize for Outcome: Analyzing opportunities for selling units individually through a condominium structure, multi-tenant bedroom configurations, short term rentals, and other unique revenue models can make a big difference in these projects. Some clients use as-of-right approvals to move extremely quickly and churn projects at high rates, while others seek minor variances to achieve outsized density at slower speeds. These new policies provide new opportunities to rethink operational models, and you should be considering how your approach will affect your broader portfolio and business operations.
We believe the new sixplex zoning bylaws present an astounding opportunity for Toronto’s housing future.
We want to help in your search for building sites that can take advantage of this new policy, and help craft the ideal design and approvals strategy to accommodate your unique operational model, risk profile, timeline, and budget.
Submit your address here for a free multiplex assessment that will help you understand the as-of-right entitlements of your property, and connect you with our team to start imagining the above-as-of-right potential it may hold.
