Converting To A Triplex

“Do you know the basement apartment guy - Andy Tran?” was what someone asked my cousin at a recent investors networking event. “Yes he's is my cousin”, he replied.

For better or worse, that’s what I’ve been known as - the basement apartment guy. 

I’m not complaining, as basement apartments (or second suites as I like to call them) have been in surging demand for homeowners and investors alike with home prices in the GTA continuing to stratospheric levels. With legal units now being recognized as being worth much more than illegal units, it’s given my niche business a welcome boost.

Now, even though second suite projects currently comprise all of my business, it’s really somewhat of a gateway drug to the bigger picture. Second suites are additional housing options without having to really build any new infrastructure. Talk about a free lunch.

So what is this bigger picture?

You guessed it – multi-unit conversions of single family homes and rezoning of these neighbourhoods. It’s going to take us some time to get there but in the meantime, if you have a single family home that you would like to turn into a triplex, you will need to go through the proper channels, which can be a bit of an ordeal.

So here are some things to consider if you’re looking to do a triplex conversion right now.

The Right Type Of House

First, the right type of house needs to be identified. No surprise here, but look for large wider lots for parking requirements. Larger 2-story homes which are 2000 SF plus are ideal. Including the basement, you now have 3000 SF to work with. Three separate 1000 SF apartments with 2 to 3 bedrooms each? Not too shabby.

Ideal candidates for a triplex conversion

Ideal candidates for a triplex conversion

Zoning

Of course, you would have to be within a zone that allows the conversion. There are numerous by-laws usually associated with doing this, such as lot sizes, setbacks, height restrictions, footprint ratios, etc. Not complying with these things but still complying with zoning location means a minor variance with the Committee of Adjustments is in order.

The Process

Assuming you’re in the right zone, then the process is straight forward. 
1.    Have an architect or designer come up with a legal design that meets all of the codes, and as much as the local by-laws as possible.
2.    Apply for a variance if needed (and build your arguments the best you can to get the variance granted).
3.    Get your building permit.
4.    Alter the home to contain 3 units (possibly separate heating systems, electrical, and a number of other aspects of the building)

Hidden Opportunity?

What we’ve discussed thus far is pretty straightforward and nothing new. However, there might be a hidden opportunity to tap into potential triplex conversions in single family zones that are adjacent to multi-family zones.

The argument can be made that since there are existing multi-family homes in the immediate vicinity, a house nearby has the same neighbourhood characteristics and should be “convertible” with minimal impact to the neighbourhood.

The process unfortunately is more arduous. It typically involves public meetings, presentations to the rezoning committee, and a council vote.

And oh yeah, possibly tens of thousands in fees.

If you have a stomach for something like this, then it might be worth looking into. If successful, you may be blazing new trail for a particular neighbourhood and creating new opportunities.

Here's a very interesting thing I saw while digging through the St.Catharines zoning document. The colour coded map on the bottom shows the different zones and what you can do with them. Yellow is single family (second suites allowed), while the dark green allows for duplexes, triplexes and even fourplexes. If I had to guess, this house may have been properly rezoned due to the high density development in the area. The pink and orange represents higher density and commercial. This begs the question: Can this be replicated in other areas, turning a single family home into a triplex?

Here's a very interesting thing I saw while digging through the St.Catharines zoning document. The colour coded map on the bottom shows the different zones and what you can do with them. Yellow is single family (second suites allowed), while the dark green allows for duplexes, triplexes and even fourplexes. If I had to guess, this house may have been properly rezoned due to the high density development in the area. The pink and orange represents higher density and commercial. This begs the question: Can this be replicated in other areas, turning a single family home into a triplex?

Alternatively, you can jump on already rezoned neighbourhoods and take advantage of certain properties before others have.

Surprising, while looking through several zoning by-law and official plan documents for a few cities, I saw many areas that were already zoned to allow triplexes and fourplexes, but only have what appeared to be single family homes throughout.

Is there an untapped opportunity here? This requires further investigation.

The REAL Bigger Picture

If you’ve read my previous posts, you know my real bigger picture involves high density low and mid-rise housing options - sort of the middle ground between single family homes and massive condo towers.  

Here's what's missing

Here's what's missing

The reason why we don’t have these options is because of many of the mid-century zoning policies that are still in place today. In the sample map above, there needs to be way less yellow and way more of the other colour codes.

Things are changing. Especially in light of new data which shows that low density neighborhoods are actually a net-loss for cities across Canada and the US.

Yes it’s true. High density portions of urban areas subsidize the cost associated with low density neighborhoods.

Below is a graph showing the City of Lafayette in the US, which is a good representation of pretty much every city in North America. Green = high density = profit. Red = low density = loss.

" In accounting terms, green equals profit and red equals loss. The higher the block goes, the larger the amount of profit/loss. If you have a sense of the basic layout of North American cities post World War II, you can figure out pretty easily what is going on here." - Quote and photo credit: www.strongtowns.org article "The Real Reason Why Your City Has No Money"

" In accounting terms, green equals profit and red equals loss. The higher the block goes, the larger the amount of profit/loss. If you have a sense of the basic layout of North American cities post World War II, you can figure out pretty easily what is going on here." - Quote and photo credit: www.strongtowns.org article "The Real Reason Why Your City Has No Money"

So why did they build this way back in the day (rhyme not intended)?

When our suburbs were being built, there’s a temporary boom, which everyone benefits from. A lot of the long term expenses and liabilities associated with maintenance and aging infrastructure are carried forward to future generations and city balance sheets.

These neighbourhoods were also built in an era of cheap and ever-abundant oil and materials. That’s not the case anymore. The momentum is so strong that builders today still continue to want to build like this.

So, policy folks are starting the take notice and implementing high density zoning. With the introduction of Bill 140 allowing second suites across the province, we might expect the allowance of a 3rd unit sometime soon. This certainly makes more sense in Toronto proper, where even a 2-unit property doesn’t quite make sense as an investment for cash-flow purposes.

When this happens, it may be very similar in policy where they will try to keep the look and feel of the neighbourhood with parking minimums and façade restrictions. This might even soon take the form of coach houses in the back, which places like Vancouver and Ottawa have already allowed in many areas.

Ottawa's first coach house - Photo credit: CBC

Ottawa's first coach house - Photo credit: CBC

In the meantime, if you want to keep it simple for now, call the Basement Apartment Guy.