Adding a legal basement apartment in Kitchener, Waterloo or Cambridge

How many units each city allows

Ontario changed the rules in 2022. Municipalities can no longer prohibit a second unit in a detached house, semi or townhouse, or a third unit either in the house or in a backyard building. Kitchener and Waterloo have since gone further and allow four units on many residential lots. Cambridge allows three.

In Kitchener, ADUs are allowed in all RES-1 to RES-5 zones on lots with full municipal services, with one set of services per lot, although each unit can be separately metered. Some Cambridge properties are still governed by the older By-law 150-85, so ask the city which by-law applies to your lot.

Parking

Parking often decides whether a unit is possible, especially on narrow lots.

• Kitchener: no parking is required for an ADU within 800 m of an LRT station or in strategic growth area zones. Elsewhere it is 0.3 spaces per ADU in the Central Neighbourhood Area and 0.6 per ADU in the rest of the city, on top of the main house's own requirement. Spaces must be at least 2.6 m by 5.5 m, and every ADU entrance that does not face the street needs a clear walkway 1.1 m wide.
• Waterloo: two spaces in total for a lot with two or three units, and three spaces for four units. Each space must be at least 2.8 m by 5.5 m, and a driveway cannot extend in front of the house's habitable floor space.
• Cambridge: the city's ARU page points to section 4.19 of the zoning by-law for parking and entrances. Confirm the requirement for your lot with the city before you design.

Permits and approvals

A building permit is required in every case, and the electrical work needs its own ESA permit and inspection. Beyond that, each city adds its own steps.

Kitchener

Every ADU except a duplex needs a zoning (occupancy) certificate, applied for before the building permit. The city's guide lists 15 business days for the certificate and 10 or 15 business days for the building permit once the application is complete. A homeowner or a BCIN designer can draw a duplex; three or more units in a building need a designer or architect. The ESA letter must be submitted at the occupancy inspection, and a final zoning inspection is needed to get the permit deposit back.

Waterloo

Waterloo's basement and main-floor ARU process covers houses with up to two units. The drawings include a site plan with parking and entrances, floor plans showing ceiling heights, smoke and CO alarms, exits and the fire separation and its rating, plus structural plans for any structural change. The fee is $392 per unit added plus $0.62 per square foot renovated, and typical review is 15 business days. The city's web page says a homeowner may draw plans for their own house while its ARU guide asks for an architect, engineer or BCIN designer, so plan on a designer.

Cambridge

Cambridge requires every ARU to be built under a building permit in line with the Ontario Building Code, with occupancy approved by the city's Building Services Division. Drawings may be prepared by the owner or a qualified designer, at 3/16 inch to the foot or larger, and must show existing and proposed fire separations.

What the Building Code asks for in a basement unit

Most basement apartments go into houses more than five years old, where the 2024 Ontario Building Code allows compliance alternatives that are more flexible than the rules for new construction. The summary below follows the City of Kitchener's published guidance for adding a second unit to an existing house. Your designer confirms the exact requirements for your home.

Fire separation

The unit must be separated from the rest of the house by a fire separation, typically 30 minutes. A 15-minute separation is allowed in some cases (the province's older guide allows it where smoke alarms are interconnected throughout the house), and your designer confirms which applies. A typical 30-minute ceiling uses 5/8-inch Type X drywall (or 1/2-inch Type C) on the underside of the joists, and walls use 1/2-inch drywall on both sides. Doors between units need at least a 20-minute rating and a self-closer, and every penetration through the separation is fire-stopped.

Smoke and carbon monoxide alarms

Smoke alarms must be hardwired with battery backup and a visual signal, on every level, outside sleeping areas, in each bedroom of the unit and in common areas. They are interconnected within the unit, and between units where the units share the only exit or a 15-minute separation is used. Carbon monoxide alarms go near the unit's bedrooms wherever there is a fuel-burning appliance, an attached garage or a wood-burning fireplace.

Exits and bedroom windows

A separate exit for each unit is preferred. A shared exit needs a 30-minute separation and smoke alarms interconnected between both units. Every basement bedroom needs an egress window unless it has a door directly outside: openable from inside without tools, with at least 0.35 m² of clear opening, no dimension under 380 mm, and at least 550 mm of clear space in front of it in the window well.

Ceiling height

At least 1.95 m (6 ft 5 in) over the unit's floor area, and 1.85 m (6 ft 1 in) under beams and ducts.

Heating, ventilation and plumbing

In a house more than five years old, one furnace can serve both units if a duct-type smoke detector shuts it down when it senses smoke. The kitchen range hood should vent outdoors; recirculating hoods are generally not permitted. Each unit needs access to laundry (a shared laundry room needs a fire separation) and its own water shut-off. Living and dining rooms need natural light equal to 5% of their floor area, and bedrooms 2.5%.

Sound

Sound separation is not required by the code for this kind of conversion, but it is worth doing. Insulation in the ceiling and a resilient ceiling assembly cost little during construction and make a real difference to both households.

Houses under five years old

Newer houses follow the full new-construction rules: a continuous smoke-tight barrier of 5/8-inch Type X drywall on both sides of walls and the underside of floors between units, smoke and CO alarms interconnected between the suites (CO alarms hardwired), and ducts serving one unit kept separate from the rest of the house. Expect a separate or modified heating system.

Three or four units

A building with three or more units falls outside the rules for a house with a second unit, with different fire separation and other requirements. Plan on a designer or architect from the start.

Renting it out: licensing

• Waterloo requires a rental licence before a tenant moves in. Its Rental Housing Licensing By-law took effect July 1, 2026, covers basement and secondary units, and licences renew every year. Applications include a floor plan and parking plan, an electrical inspection form from a licensed electrician dated within 12 months, a gas or oil appliance form, an insurance declaration (the by-law requires at least $2 million in liability coverage), ID and proof of ownership, plus a criminal record check where the owner lives on site. New licences cost $460 to $675 depending on the class and number of bedrooms.
• Kitchener does not mention a rental licence in its ADU guidance. Its licences cover lodging houses (five or more renters, not counting a resident owner), and council approved a Rental Renovation Licensing By-law in April 2026 for renovations that require a tenant to move out. Confirm with the city's licensing office before you rent.
• Cambridge lists no residential rental licence on its licensing page. Confirm with the city before you rent.

Development charges

Ontario exempts a second unit, and a third unit in the house or in a backyard building, from development charges. Waterloo and Cambridge both confirm that city and regional charges do not apply to these units. School board charges can still apply; Cambridge lists $3,448 for the Waterloo Region District School Board and $1,739 for the Waterloo Catholic District School Board, per unit. A fourth unit pays the full charges.

Kitchener's ADU Grant, which opened January 19, 2026 while funding is available, pays 100% of the school board charges on a second and third unit, and 50% of all charges on a fourth unit, rising to 100% if that unit meets an affordability, energy-efficiency or barrier-free condition.

Grants and financing, checked October 2026

• Insured refinancing: since January 15, 2025, homeowners can refinance up to 90% of the home's value, including the value the new units add, with up to a 30-year amortization. The as-improved value must be under $2 million, the property can have up to four units, the owner or a close relative must live in one, and the new units cannot be short-term rentals.
• Multigenerational Home Renovation Tax Credit: a refundable credit (for the 2025 tax year, 14.5% of up to $50,000 in eligible costs, to a maximum of $7,250) when the suite lets a senior, or an adult eligible for the disability tax credit, live with a qualifying relative.
• Region of Waterloo, Ontario Renovates Secondary Suites: up to $25,000, interest-free and forgiven over 15 years, for owner-occupied homes that keep rents affordable for 15 years. Repayable if the home is sold sooner. Funding is limited each year.
• City of Waterloo ARU Grant: up to 50% of costs, to a maximum of $20,000 for an interior unit or $30,000 for a detached unit, if rent stays at or below 80% of average market rent for at least five years. Construction cannot start before approval, and a rental licence is required.
• City of Cambridge ARU grant: a one-time grant of up to $10,000 for owners who build an ARU, toward water and sewer upgrades, professionally prepared permit drawings, labour and materials.
• City of Kitchener ADU Grant: covers development charges, as described above.

Every program has conditions and limited funds. Confirm availability before you count on it, and apply before construction starts where the program requires it.

Is your basement a good candidate?

At a site visit we look at the same handful of things every time:

• Ceiling height under beams and ducts, and whether ducts can be rerouted to protect it.
• Windows: whether each bedroom can get a compliant egress window, which may mean enlarging an opening in the foundation.
• Entrance: an existing side or rear door, or room to add one. Many bungalows and side-splits already have one.
• Parking that meets the city's rules for your lot.
• Plumbing: where the drains run and how much of the slab needs to be opened for a bathroom and kitchen.
• Heating: whether the existing furnace can serve both units with a smoke-detector shut-off, or a separate system makes more sense.
• Moisture: any history of water, which gets solved before anything is framed.

How we build basement apartments

We design the unit to the code requirements above from the first concept, prepare the permit drawings, manage the city's approvals and coordinate the building and ESA inspections through to occupancy. The first four steps of our process, including the site visit and a written preliminary proposal, are free.

Read more about our basement renovations, our permit guide, or the city pages for Kitchener, Waterloo and Cambridge.