Building an ADU

The ADU grant is fully subscribed and we will not be accepting new applications.

What is an ADU?

An ADU is an Additional Dwelling Unit - this generally describes a separate living space on your property in addition to the home you already have. They can be built inside the house, onto the house, or off in the yard.

Depending on the size of your lot, an ADU is allowed in most urban residential neighbourhoods. Use the ADUSearch tool to see if your property can fit another unit.

Please note - Constructing an additional dwelling unit could impact your:

Property assessment and taxes, and;
Sewer and water rates

Please visit the Property Taxes and Water Meter Readings and Billing web pages for more information.

Types of ADU

There are three types of ADUs:

Type A: Interior Alteration (Built IN)
These homes are built inside the existing building. An example would be a basement apartment, but they can also be on the main or upper floors.
Type B: Addition (Built ON)
These homes are built as an attached addition to an existing building.
Type C: Accessory Building (Built OFF)
These homes are completely separate from the existing house or main building on the property. They also go by “Backyard Homes” or “Laneway Houses”.

Steps to building an ADU

Make sure your lot can fit an ADU - use the ADUSearch tool to check out your property!
Figure out the type of ADU you want to build.
Estimate how much your project will cost.
Apply for grants and secure funding, if available.
- Learn about grants and financial incentives available to you.
- *Please note: All new applications must be provisionally approved before you start work on your project.
Get Your Project Ready! Let's Build Thunder Bay!

These steps are outlined in greater detail in our How to Create an Additional Dwelling Unit on Your Property guide.

ADU Grants and Financial Incentives

The Additional Dwelling Unit Grant is intended to encourage home or property owners to add legal additional units to a residential or mixed-use building that are safe and contribute to the limited supply of diverse rental housing. This can be within the building as an apartment, an addition to the building, or a backyard home on the property. There may be other grants and incentives available for your project.

Additional Dwelling Units Grant

The Additional Dwelling Unit Grant is intended to encourage home or property owners to add legal additional units to a residential or mixed-use building that are safe and contribute to the limited supply of diverse rental housing. This can be within the building as an apartment, an addition to the building, or a backyard home on the property.

Please note: All new applications must be provisionally approved before you start work on your project.

Value

100% of eligible costs to a maximum of $20,000 per unit

Project Eligibility

Residential or mixed-use building located within the designated project area

A self-contained additional unit with private kitchen, bathroom, and sleeping area must be created

Eligible costs

- Electrical
- Safe egress
- Ventilation
- Fire protection, including associated insulation
- Similar improvements

Permanent finishing materials and decorative elements
- Construction materials
- Painting
- Drywall
- Trim
- Permanent light fixtures
- Flooring
- Countertops
- Cabinetry

Costs to complete any of the following types of studies, plans, or designs
- Conceptual plans
- Structural analysis
- Site plan drawings
- Architectural studies
- Engineering plans
- Other site-specific studies or plans which may be required or recommended by the City at the time of a pre-application submission meeting or pre-consultation under the Planning Act
- Costs for the services of a design professional, professional engineer, or architect as may be required in association with the above-noted improvements

Payment

This grant is paid when the following documentation is uploaded to the portal and the building permit is closed per the building permit process:
- Photographs showing the completed work
- Receipts for eligible costs
- Invoices with a $0.00 balance owing

Servicing Grant

The Servicing Grant provides support to home or property owners participating in the Additional Dwelling Unit Grant where upgrades to municipal servicing such as water, sanitary sewer, and storm sewer are needed to construct the additional unit(s).

Value

100% of eligible costs up to $10,000 where municipal servicing upgrades are needed to support the creation of the additional unit(s)

The funds will be applied to work on City-owned lands first, with any remaining funding being used for upgrades on private lands

Eligible costs

Municipal infrastructure work including the improvement or reconstruction of existing on-site public infrastructure required to create the additional unit(s)
- Water services
- Sanitary sewer
- Storm sewer
- Installation of municipal servicing as directed by the Infrastructure, Development and Operations Department
Costs to complete any of the following types of studies, plans, or designs
- Conceptual plans
- Structural analysis
- Site plan drawings
- Architectural studies
- Engineering plans
- Other site-specific studies or plans which may be required or recommended by the City at the time of a pre-application submission meeting or pre-consultation under the Planning Act

Costs for the services of a design professional, professional engineer, or architect as may be required in association with the above-noted improvements

Relationship to other grants

This grant is intended to support the Additional Dwelling Unit grant.

Payment

This grant is paid after the project is complete and the building permit is closed as per building permit process.

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