Posted On Sep 21, 2025

For years, the story of Toronto housing has been one of two extremes: gleaming condo towers downtown and sprawling single-family homes in the suburbs. The options in between—the duplexes, triplexes, and laneway homes that once formed the backbone of many vibrant neighbourhoods—have been largely missing.

This is the "missing middle," and bringing it back is now one of the biggest priorities for all levels of government as they tackle the housing affordability crisis. Through new zoning bylaws and initiatives like the Federal Housing Accelerator Fund, Toronto is making it easier than ever for homeowners to create new housing units on their existing properties.

This isn't just a policy change; it's a significant opportunity for homeowners and investors. Here’s what it could mean for you.

What is "Missing-Middle" Housing?

This refers to multi-unit housing that is compatible in scale and form with single-family neighbourhoods. Think of:

  • Duplexes/Triplexes/Fourplexes: Converting a single-family home into multiple separate units.

  • Laneway Suites: Building a small, detached home in the backyard facing the laneway.

  • Garden Suites: Similar to a laneway suite, but on a property without a public lane.

The city has now changed zoning across Toronto to permit these types of housing on most residential lots, removing a major layer of bureaucratic red tape that previously made such projects impossible.

The Opportunity for Homeowners

For a typical GTA homeowner, this new landscape opens up incredible possibilities:

  1. Generate Rental Income: Adding a legal basement apartment, a garden suite, or converting your home into a duplex can create a significant new stream of income. This can be used to offset your mortgage, cover rising property taxes, or simply boost your monthly cash flow.

  2. Create "Family" Housing: The missing middle is perfect for multi-generational living. You can build a laneway suite for aging parents, giving them independence while keeping them close. Or, it can be a way for your adult children to live in the city while saving for their own home.

  3. Increase Your Property Value: Adding a legal, income-generating unit to your property is one of the most effective ways to increase its overall market value and build long-term wealth.

How Do You Finance It?

Creating a new unit isn't a simple weekend project; it's a major renovation or construction project that requires capital. This is where your mortgage professional comes in.

  • Refinancing or a HELOC: The most common method is to refinance your existing mortgage to pull out the equity needed to fund the construction.

  • Construction Mortgages: For larger projects, like building a new laneway home from scratch, you may need a construction mortgage that advances funds in stages as the work is completed.

These new policies are reshaping what's possible in our city. If you've ever wondered about the potential locked away in your own backyard or basement, now is the time to explore it. Let's discuss how we can leverage your home equity to turn that potential into a reality.

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