Additional Dwelling Units Gain Momentum as Affordable Housing Solution
In the evolving landscape of modern living, additional dwelling units (ADUs) are increasingly recognized as a significant tool to help create affordable housing. These versatile spaces, whether called basement suites, coach houses, or dual-living homes, have become a staple in builder portfolios and renovation projects across Canada.
Builders Embrace ADU Trend
Several prominent builders have recently entered the ADU market, reflecting growing demand. Minto introduced its Dual Key homes in September, while Richcraft launched Tandem Dual Living Homes in December. Other companies like Patten Homes and Urbandale Construction are developing their own versions. One of the pioneers in this space, eQ Homes, has been offering Duo Homes with standard secondary basement units since February 2024.
Amsted Design-Build, with over 15 years of experience constructing ADUs, recently won the basement renovation category at the Housing Design Awards for transforming a walkout basement into a functional dwelling unit. Similarly, Ottawa General Contractors (OGC) has been building coach houses and ADUs for approximately eight years, with these projects now constituting about 60 percent of their business.
Factors Driving ADU Popularity
The surge in ADU construction and renovation can be attributed to a combination of economic, social, and regulatory factors:
- Rising housing and rental prices during and after the pandemic have made homeownership challenging for first-time buyers and reduced the appeal of downsizing for empty nesters.
- Economic and job uncertainty is causing hesitation among potential homebuyers, making flexible living arrangements more attractive.
- The pandemic highlighted isolation issues among family members, increasing interest in multi-generational living arrangements.
- The ongoing Great Wealth Transfer from baby boomers to younger generations is creating opportunities for combined household investments.
- Provincial legislation like Bill 23 (the More Homes Built Faster Act) and subsequent local bylaw changes in 2023 have simplified the process of adding density and units to properties.
Market Response and Growth
Nick Karrandjas of Ottawa General Contractors emphasizes the strategic importance of ADUs, stating, "As prices increased, as demographics changed, this was going to be a huge tool for people to actually create affordable housing." The company has more than 25 ADU projects scheduled for this spring, with expectations to double that number by year-end—a significant increase from the five to ten projects they handled five or six years ago.
Kaylie Chamberlain, owner of ARTium Design Build and Just Basements, notes that demand is "certainly on the rise." She advises that ideal existing homes for ADU conversions are those with side or back entrances and emphasizes the importance of privacy features like soundproofing.
Metric Homes, another early adopter of ADUs, has sold over twenty such units since building its first in 2007. Owner Shawn Bernier reports that "the last couple of years a much bigger percentage of our builds have been ADUs," with the company recently closing two projects in December. Metric's portfolio includes ground-floor and basement units, with a new model home under construction at Trail View in Kanata.
Regulatory Impact and Future Outlook
Karrandjas observes, "In all of my experience, I've never seen such a massive change in zoning and code changes" enabling the ADU expansion. This regulatory shift is reflected in permit data: between January and November of last year, Ottawa issued 344 permits for ADUs and an additional 19 for coach houses, representing nearly five percent of all home construction, demolition, or alteration permits.
As housing affordability remains a critical issue, ADUs are positioned as a practical solution that addresses multiple needs—from providing rental income to facilitating multi-generational living. With continued builder innovation and supportive regulations, these additional dwelling units are likely to play an increasingly important role in Canada's housing landscape.
