Understanding Ontario’s More Homes Built Faster Act (Bill 23), the three-unit rule, who qualifies, current regulations, advantages, disadvantages, and what homeowners need to know.
Introduction
For decades, building an additional dwelling on a residential property in Ontario was often a lengthy, expensive and frustrating process. Municipal zoning rules frequently limited properties to a single detached home, and homeowners who wanted to add basement apartments or backyard garden suites often faced rezoning applications, public meetings and lengthy approval delays.
That changed dramatically with the introduction of Bill 23 – the More Homes Built Faster Act, 2022.
Introduced by Premier Doug Ford’s Progressive Conservative government as part of its ambitious goal of building 1.5 million new homes over 10 years, Bill 23 represents one of the largest overhauls of Ontario’s planning legislation in decades. It affects everything from development charges and conservation authorities to municipal planning powers.
Perhaps the most publicized change is the requirement that municipalities permit up to three residential units on many residential lots “as of right.” This single provision has fundamentally changed how many Ontario homeowners can use their property.
But does Bill 23 really mean you can simply build three houses on your lot?
The answer is more complicated than many headlines suggest.
What is Bill 23?
Bill 23 is officially known as the More Homes Built Faster Act, 2022.
It was introduced on October 25, 2022, passed by the Ontario Legislature and received Royal Assent on November 28, 2022, making it law. It amended numerous pieces of legislation, including the Planning Act, Municipal Act, Development Charges Act, Conservation Authorities Act and others.
The provincial government’s stated objective was simple:
Increase housing supply while reducing municipal red tape.
Ontario argued that the province needed to dramatically increase housing construction because population growth, immigration and demand had far exceeded new housing supply.
Ontario’s Housing Crisis
Bill 23 was introduced against the backdrop of a severe housing shortage.
Several factors contributed to the crisis:
- Rapid population growth
- Record immigration levels
- Rising construction costs
- Higher interest rates
- Limited land available for development
- Municipal approval processes that could take years
- A shortage of rental housing
- Increasing home prices
Ontario estimated the province would require approximately 1.5 million new homes by 2031 to help restore affordability.
The Three-Unit Rule
The most significant change for homeowners concerns Additional Residential Units (ARUs).
Bill 23 requires municipalities to permit:
- up to three residential units per residential lot in many existing residential areas,
- without requiring a zoning by-law amendment or minor variance solely because three units are proposed.
This is commonly described as permitting three dwellings on one lot “as of right.”
What Does “As of Right” Mean?
This is one of the most misunderstood parts of Bill 23.
“As of right” does not mean:
- automatic approval
- no permits
- no inspections
- no building code
- no servicing requirements
Instead, it means municipalities generally cannot refuse the additional units simply because zoning only allowed one dwelling before.
Homeowners must still obtain:
- Building permits
- Electrical permits where required
- Fire code compliance
- Ontario Building Code compliance
- Septic approval (where applicable)
- Conservation approvals if required
- Engineering approvals where necessary
What Counts as Three Units?
The three units can take several forms.
Examples include:
Option 1
- Main house
- Basement apartment
- Garden suite
Option 2
- Main house
- Basement apartment
- Above-garage apartment
Option 3
- Duplex
- Garden suite
Option 4
- Existing home
- Detached coach house
- Basement suite
The legislation gives homeowners flexibility provided all applicable building and safety requirements are met.
Can You Build Three Separate Houses?
Not necessarily.
This is where confusion often arises.
Bill 23 does not automatically allow three completely independent detached homes on every residential lot.
Instead, municipalities must permit three residential units, which may be:
- inside one building
- split between buildings
- located within accessory structures such as garden suites
Local zoning, lot dimensions, servicing capacity, setbacks, height limits and the Ontario Building Code still influence what is physically possible.
Parking Requirements Were Reduced
Before Bill 23, municipalities often required multiple parking spaces for additional units.
The legislation now limits municipalities to generally requiring no more than one additional parking space per additional residential unit, and in some circumstances parking requirements may be reduced even further, particularly near transit.
Municipalities Lost Some Zoning Powers
Before Bill 23:
Many municipalities restricted:
- second suites
- backyard homes
- coach houses
- accessory apartments
After Bill 23:
Municipalities must generally allow qualifying additional residential units and cannot impose certain zoning standards that would effectively prohibit them. Provincial regulations have further limited some municipal standards related to lot coverage, floor space index and minimum lot area for these units.
What Properties Qualify?
Generally speaking, the legislation applies to many residential lots containing:
- detached homes
- semi-detached homes
- townhouses
Condominium rules and certain site-specific restrictions may still apply.
Servicing capacity also matters.
A rural property with a small septic system may require substantial upgrades before additional units are permitted.
Does This Apply in Rural Ontario?
Yes—but with important limitations.
Many rural homeowners assume Bill 23 allows unlimited backyard homes.
Not exactly.
Rural properties may face additional challenges including:
- septic capacity
- well water availability
- minimum setback requirements
- conservation authority regulations
- floodplain restrictions
- environmental protection areas
- agricultural zoning rules
The Planning Act changes do not override every other applicable law.
Why Did Ontario Introduce This?
The province argues that allowing more housing on existing residential lots will:
- increase housing supply
- provide more rental housing
- reduce urban sprawl
- improve affordability
- help seniors age in place
- create multigenerational housing
- provide homeowners with rental income
- make better use of existing infrastructure
This approach is often referred to as gentle density or gentle intensification because it adds housing within existing neighbourhoods rather than relying only on large subdivisions.
Benefits for Homeowners
For many homeowners, Bill 23 creates new opportunities.
Potential benefits include:
- Rental income
- Mortgage assistance
- Increased property value
- Housing for aging parents
- Housing for adult children
- Caregiver accommodations
- Greater flexibility for future family needs
Many homeowners who previously could not legally add a second suite now have a much clearer pathway.
Criticism of Bill 23
Despite its objectives, Bill 23 has generated significant debate.
Critics argue it:
- reduces municipal planning authority
- limits local decision-making
- may reduce municipal revenues through changes to development charges
- could strain infrastructure if growth outpaces investment
- includes environmental changes beyond housing that have raised concerns
Municipal organizations estimated the legislation could significantly reduce revenues used to fund infrastructure such as roads, parks and water systems, while environmental organizations criticized changes affecting conservation and planning.
Supporters’ View
Supporters argue the previous planning system:
- took too long
- cost too much
- discouraged investment
- limited housing options
- created unnecessary bureaucracy
They believe simplifying approvals for additional residential units is one practical way to increase supply without dramatically changing neighbourhood character.
Has Bill 23 Solved Ontario’s Housing Crisis?
The short answer is no.
Housing construction remains influenced by many factors, including:
- interest rates
- labour shortages
- material costs
- financing conditions
- municipal servicing capacity
- market demand
Bill 23 removed some planning barriers, but it cannot eliminate broader economic constraints on homebuilding.
Current Status of Bill 23
As of 2026, Bill 23 remains law in Ontario. Since its passage in 2022, the province has introduced additional housing legislation that modified some aspects of the broader housing framework—such as changes to development charges and other planning measures—but the core framework allowing **up to three residential units on many residential lots “as of right” remains in place. Municipalities across Ontario have been updating their zoning by-laws and planning policies to comply with these provincial requirements.
Practical Example
Imagine you own a detached home in London, Kingston, Barrie or many other Ontario municipalities.
Under the updated rules, your property might include:
- your primary residence,
- a legal basement apartment,
- and a detached garden suite,
without needing a zoning amendment simply because there are three units on the lot.
You would still need:
- building permits,
- inspections,
- compliance with the Ontario Building Code,
- servicing that can support the additional units,
- and any other required approvals.
The Bottom Line
Bill 23 represents one of the most significant housing reforms in Ontario’s modern history. By allowing up to three residential units on many residential lots “as of right,” the province has shifted toward encouraging gentle intensification in established neighbourhoods.
For homeowners, the changes can create opportunities to generate rental income, support multigenerational living, or add flexible housing options. At the same time, the legislation has sparked ongoing debate about municipal autonomy, infrastructure funding and environmental oversight.
The key point to remember is that Bill 23 does not give every property owner carte blanche to build three detached houses on a lot. Instead, it establishes a provincial right to create up to three residential units on many qualifying residential properties, while still requiring compliance with building codes, servicing requirements, fire safety rules and other applicable laws.
As Ontario continues to grapple with housing affordability and rapid population growth, Bill 23 remains a central part of the province’s strategy to increase housing supply—one backyard suite, basement apartment or garden home at a time.
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