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How to Convert Your Home into 3 Units with Bill 23

Written by
Published on
December 21, 2022

What is Bill 23 All About?

Bill 23, also known as the More Homes, Built Faster Act, 2022, was passed with Royal Assent on Nov. 28th, 2022, and allows for "gentle intensification" in parts of the city. This means that property owners in these areas can now build up to three units on any lot, providing a potential increase in housing density and options.Before Bill 23, many property owners were limited in their ability to build additional units on their land due to zoning restrictions and other regulations. The passage of Bill 23 now allows for greater flexibility and potential for housing development in urban areas.

How Can Homeowners Take Advantage of Bill 23?

There are several potential benefits to this change in legislation. For property owners, the ability to build additional units on their land can provide a source of income and potentially increase the value of their property. For the city, the increase in housing density can help address the demand for housing and potentially alleviate some of the pressure on the housing market.However, there are also potential challenges and considerations with the implementation of Bill 23. While this gives homeowners a significant advantage, some stakeholders have expressed concerns about the potential for over development in certain areas. It will be important for the city to carefully consider these potential impacts and to establish guidelines and regulations for the development of additional units and at OGC we have a direct-line with the City of Ottawa planners to do just that.

How to Convert 1 Unit Into 3 With Bill 23?

If you want to build additional residential units on your property, including the creation of a second residential unit in an existing detached house, semi-detached house, or row house, it is now possible. You can also build a third residential unit in an existing home, as long as no ancillary structures contain any residential units. Additionally, you can build one residential unit in an ancillary building or structure, as long as the existing home contains no more than two units and no other ancillary structures contain any units. The same exemptions apply to the creation of additional units in new residential buildings.

An Example Of What Is Possible

If you can convert any single home into a triplex you would need a construction budget of roughly of $500,000 average, a newly renovated Triplex in Ottawa sells for $1.5 million, some lower and some higher. The range is really $1-2 million. If the Post-triplex build valuation comes in at $1.5M, then you can borrow up to 1.1M.

Sample Scenario: You own a house worth $800,000 and a mortgage of around $500,000. You can borrow $1.1M - $500k = $600k. Take $500k for the triplex conversion, so now you are all in for $800k (building valuation pre-triplex) + $500k = $1.3M. So you are all in for $1.3M, but you have gained $200k in equity. The extra mortgage on the $500k is about $4k per month. 2 out of the 3 units in your triplex will cover this payment effectively giving you this:

  • $200k in increased equity on your property
  • a multi-family income-generating asset
  • a "free" triplex conversion because the cost of the construction financing is covered by rental income
  • ZERO cash is required from you upfront
  • a potential home for your aging parents, adult children, or simply income generation from an asset for you and your family

Want us to help you make this possible?Contact us here to determine your eligibility:

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