Secondary Suites — An Affordable “Gold Mine” For First-Time Home Buyers

Difference between Affordable Housing vs. Social Housing

Currently, Canadian’s are struggling to find affordable housing options close to their workplace and family. As a result, the conversation about “affordable housing” has become a recurring topic for the levels of government. However, it is important to ensure that when talking about affordable housing, the proper terminology is being used when speaking towards housing that is affordable vs. social housing.

According to the Canada Mortgage and Housing Corporation and RAHB, spending more than 30 per cent of before tax income on housing is unaffordable. It does not solely refer to social or subsidized housing. RAHB is advocating for elected officials and governments to use the proper terminology of “affordable housing” in policies and official documents, and when speaking to the media.

Secondary Suites

Secondary suites are an untapped market that enables homeowners to create affordable rental spaces. The creation of affordable rental units will help to stimulate the rental market, while also helping to reduce the homeowner’s expenses.

Dr. Frank Clayton, senior research fellow, Center for Urban Land Research and Development at Ryerson University, argues that secondary suites are the most cost-effective way to create rental units. Below are the estimated costs* to create a rental unit:

  • Secondary Suite in Existing Dwelling = $55,000
  • High-end Downtown Area  = $425,680
  • Median Central (Not Downtown) = $345,746
  • Basic Fringe  = $242,623
  • Non-Profit = $229,000 – $266,000

* The above costs are based on the Toronto Market Area.

A secondary suite is a great way for a first-time home buyer to help subsidize monthly mortgage payments, while at the same time, helping to create more affordable rental units within the RAHB area.

It has become increasingly more difficult to create legal rental units within the RAHB market area. It is important that City Councils are made aware of the importance of creating these secondary suites and what they can do to help the RAHB market areas become more affordable not just for first-time home buyers, but for everyone.

A great way to help City Council become more aware of the importance of secondary suites is to contact your City Councillor. By telling them your experiences regarding housing options that are opportunities in your community, you are helping to connect the past and present to the future.