Halton Second Unit Pilot Program

IMPORTANT: Thank you for your interest in the Second Unit Pilot Program. Due to high demand, all of the funding for the Pilot Program has been allocated. As a result, the Program is currently closed and we will not be adding any more homeowners to the Expression of Interest List.

The program will be evaluated later this year and may resume in January or February 2018. Please check back on this web page for updates in 2018.

Halton Region is growing. Over the next 15 years, our population is expected to increase by almost 50 per cent to 780,000. More housing options will be needed to accommodate this growth, including affordable housing options. The Second Unit Pilot Program is a new Halton initiative that will:

  • help increase the supply of affordable rental housing; and
  • provide financial assistance to eligible Halton homeowners for the creation of a second unit in their home.

What is a second unit?

A second unit is a self-contained unit with sleeping, kitchen and bathroom facilities and a separate entrance. It is usually located in the basement of a single home and is also referred to as a secondary suite or accessory dwelling unit. A second unit must meet applicable zoning, building code, fire code and property standards. To create a second unit, a building permit issued by the local municipality is required. Local municipalities in Halton Region are Burlington, Halton Hills, Milton and Oakville.

How long will the pilot program run?

The Halton Second Unit Pilot Program will run from August 1, 2016 to November 1, 2017 or until all of the Program’s funding has been allocated. During this 16-month period, 20-25 Halton homeowners will be provided with financial assistance to support the creation of a second unit in their home.

How much funding can be awarded for an eligible project?

  • The maximum funding amount is 75 per cent of the Halton-approved project costs – up to $50,000 per project. The homeowner pays at least 25 per cent of the project cost. If the funding is more than $10,000, it will have to be registered on the title.
  • The sum of mortgages/encumbrances (e.g., other charges on the property) registered on the title and program funding cannot exceed the market value of the home.
  • Approved project costs may include construction costs and costs to obtain a building permit, drawings and legal services.
  • The funding is provided in the form of a 15-year interest-free forgivable loan that does not require monthly payments. One-fifteenth of the loan is forgiven each year.
  • If the home is sold, rented, transferred, or if the homeowner(s) cease(s) to occupy the property as the principal residence during the 15-year term of the funding agreement, the outstanding loan must be repaid.

Other key eligibility criteria:

  • The homeowner must have a valid building permit that allows for the creation of a second unit. Eligible projects must comply with all applicable local and regional by-laws.
  • The project address must be the homeowners’ sole and principal residence.
  • Project work that is to be funded through the program cannot begin until the project has been approved. However, project work that is required to obtain a building permit is excluded from this pre-approval requirement. That is, those costs are eligible project costs, but will be incurred and paid for by the homeowner before the project can be approved.
  • The maximum allowable rent may not exceed the Average Market Rent (AMR), as surveyed annually by the Canada Mortgage and Housing Corporation (CMHC). Annual rent increases in accordance with the Residential Tenancies Act, 2006 (RTA) guidelines are allowed. For 2017, the following rent levels apply:

  • Burlington Oakville Milton/Halton Hills
    Bachelor $908 $977 $710
    1 Bedroom $1,162 $1,214 $1,016
    2 Bedroom $1,294 $1,423 $1,182

  • Homeowners may select any tenant, as long as:
    • they are legal residents of Canada; and
    • the family’s income does not exceed the income limit under the program at move-in.

    • After the household moved in, the income may increase beyond the program limit. For 2017, the following income limits apply for ingoing tenant households:

      Burlington Oakville Milton/Halton Hills
      Bachelor $36,320 $39,080 $28,400
      1 Bedroom $46,480 $48,560 $40,640
      2 Bedroom $51,760 $56,920 $47,280

    • Homeowners must notify Halton Region when the second unit becomes vacant within the 15-year term of the funding agreement.
    • Halton Region will conduct an annual compliance review during the 15-year term of the agreement.

How do I apply for program funding?

  • There is a dedicated amount of funding available during the pilot phase. New application forms will only be issued if there is enough funding for immediate consideration and if the prospective applicant has applied for a building permit with the local municipality.
  • New application forms are named and numbered. Once issued, the applicant will be given two months (or slightly longer if warranted) to complete the form. A complete form must include a valid building permit and quotations from qualified contractors. During this two-month time period, program staff will be in contact with the applicant as needed.
  • If you think you qualify and are interested in the program, please call 311 to have your name added to an expression of interest list. Please note that new expressions of interest may have to be reserved for consideration in 2017.
  • Program staff will periodically contact people on the expression of interest list with a status update.