- The homeowner can ask to have the loan forgiven and cleared five years after the unit is occupied. The homeowner will pay all costs related to this process.
- The property owner must charge rent in accordance with the Loan Agreement during the five-year term of the agreement. Learn more in the Tenant Household Eligibility Criteria section.
- During the five-year term, the property owner can increase rent annually in accordance with the Residential Tenancies Act's annual Rent Increase Guideline.
- Loan Agreements providing $5,000 or more in funding will be in the form of a second mortgage. This second mortgage will be registered on the title of the property behind the primary mortgage obligation.
- In the case of a subsequent tenancy during the five-year affordability period, the rent can be reset in accordance with the Loan Agreement.
- Contravention of the Loan Agreement may result in the required repayment of the loan.
- For Loan Agreements providing over $5,000:
- The applicant must retain independent legal services to register the Loan Agreement and cover the associated costs.
- Note that legal fees are eligible expenses when determining the cost of the project.
Additional Residential Unit Incentive Program
The Additional Residential Unit (ARU) Incentive has five incentives and grants that help property owners create alternative housing options within the city.
Property owners that create an ARU and agree to meet the conditions of the program can get funding. The funding options include forgivable loan incentives and non-repayable grants. If you receive a forgivable loan, you do not need to repay this loan if you continue to meet the program terms for five years.
We review and approve applications on a first-come, first-served basis while funding is available.
1. Detached ARU Incentive
The detached ARU incentive provides eligible property owners financial help of up to 50% of the project cost or $40,000, whichever is less.
- The property owner receives the funding after the occupancy of the unit in the form of a forgivable loan.
- The property owner will not need to repay the loan if they follow the terms of the program.
2. Interior ARU Incentive
The Interior ARU incentive provides eligible property owners financial help of up to 50% of the project cost or $30,000, whichever is less.
- The property owner receives the funding after the occupancy of the unit in the form of a forgivable loan.
- The property owner will not need to repay the loan if they follow the terms of the program.
3. Accessibility ARU Grant
The accessibility ARU Grant provides a $5,000 extra funding to an ARU project that meets accessibility criteria. We encourage the development of more accessible housing options.
- No ongoing terms or conditions associated.
- Funding is provided following the occupancy of the unit.
- A property owner can combine it with the Detached or Interior ARU incentives, or they can choose to access the Accessibility ARU grant independently.
4. Rough-In Detached ARU Grant
The rough-in detached ARU grant provides $5,000 of extra funding to property owners that install rough-in servicing (i.e. water supply, sanitary sewer, and electrical supply) to accommodate a future detached ARU project.
- Installing rough-in services during the construction of a detached ARU can help save future costs for servicing it.
- The Rough-In Detached ARU grant enables property owners to create opportunities for future ARU development.
- The Rough-In Detached ARU Grant cannot be combined with any other incentive.
5. ARU Servicing Constraint Area Grant
The ARU Servicing Constraint Area grant provides eligible property owners financial help of up to 50% of the construction cost or $10,000, whichever is less to upgrade an existing half inch water service.
- This grant enables properties that would otherwise be subject to servicing constraints to have an ARU.
- Funding is provided following the issuance of the occupancy permit and submission of supporting documentation.
- A property owner must combine it with the Detached or Interior ARU incentives.
How To Apply
Please note that property owners must apply and obtain an ARU building permit to be eligible for the ARU incentive program.
Sign up/log in to MyKingston to complete your application online and ensure we can fulfill your request effectively. If you have questions, please call 613-546-2695 ext. 4949/4836 or email housing@cityofkingston.ca.
Program Eligibility Criteria
- Eligible properties must be in the City of Kingston.
- Eligible projects must comply with the applicable zoning by-law provisions for ARUs.
- Regular Building Permit approval and inspection processes apply for all ARU projects.
- Homeowners should submit an application once they have confirmed the project will proceed. We will not consider applications submitted following the completion of the project.
- Eligible properties must not have any outstanding property taxes or other outstanding fees or charges owed to the City of Kingston.
- Mortgage payments on the subject property must be up to date.
- Any misrepresentation may result in an application being ineligible.
- The City may update the eligibility requirements or other program criteria at any time.
Terms of the ARU Incentive program
Rough-In Detached ARU grant and ARU Servicing Constraint Area grant
To receive the Rough-In Detached ARU Grant or the ARU Servicing Constraint Area Grant, you must complete all work according to the regular building permit and inspection process. This includes installing the sewer lateral and submitting a verification form.
To receive the Accessibility Grant, the property owner must include accessible elements throughout the living space to allow for safe movement. This must be part of the completed project and include:
- Clear access to entrance doors and interior doorways to bedrooms and bathrooms at 900mm
- Increased hallway width to 1100mm
- Installation of grab bars
- Accessible shower dimensions
- Control heights at 1200mm
- Knee space at kitchen sink
Tenant Household Eligibility Criteria
- The property owner will select the tenant household. Family members are eligible tenants. All tenants must meet The Maximum Income Level criteria for the tenant household.
- For the Interior and Detached ARU Incentive, the property owner may charge rent of no more than 90% of the Average Market Rent for a similar-sized unit. We will provide up-to-date Average Market Rents information on this page for reference.
- During the five-year affordability period, at the time of a new tenancy commencing:
- The household’s gross income must be below the maximum income levels outlined in the table below.
- Following the tenancy commencing, there is no ongoing need to review the tenant’s income
- Homeowners should verify the tenant's maximum income level before offering a lease. The homeowner can determine the household’s gross income by requesting receipt of all household members’ most recent Canada Revenue Agency Notice of Assessment. The Notice of Assessment(s) for the initial occupancy must be provided as part of the documents submitted to receive the funding.
The following table outlines the affordable rent (inclusive of utilities) for a unit occupied in 2024.
|
Unit Size |
Average Market Rent |
90% Average Market Rent (Affordable Rent) |
|
Bachelor Unit |
$1,035 |
$931 |
|
One Bedroom |
$1,333 | $1,200 |
|
Two Bedroom |
$1,612 |
$1,451 |
|
Three Bedroom |
$1,850 |
$1,665 |
The following table outlines the maximum gross income levels per household type
|
Unit Size |
Maximum Gross Income Levels |
|
Bachelor Unit |
$37,000 |
|
One Bedroom |
$48,000 |
|
Two Bedroom |
$58,000 |
|
Three Bedroom |
$68,000 |
After a project gets approved
You will receive a Conditional Letter of Commitment. You will have one year to complete the work and occupy the ARU in compliance with the Loan Agreement.
How to receive funding after you complete the project
After finding an eligible tenant, the property owner must complete the following steps to receive funding:
- Signing and proof of registration of the Loan Agreement
- Submit a copy of the Occupancy Permit issued by the Building Inspector
- Submit a copy of the standard lease
- Submit the tenant household’s income confirmation (i.e. previous year’s income tax Notice of Assessment)
- Submit a copy of the property owner’s current home insurance coverage
- Submit receipts related to development/construction costs
Frequently asked questions
Does the loan have any interest and do I need to make any payments?
Provided the property owner rents the ARU following the terms of the agreement, they do not need to make any payments during the five-year period of the agreement.
Eligible costs are those related to the creation of the ARU. Some common costs covered:
- Design fees
- Structural modification
- Electrical
- Plumbing
- Fixtures
- Permit fees
- Contractor labour (not including work completed by the applicant)
- Legal fees associated with registering the security for the agreement on title of the property
Keep in mind that this is not an exhaustive list. There may be other eligible costs depending on the type of project.
I just completed an ARU project, am I eligible?
Property owners must apply and obtain conditional approval before completing a project.
What happens to the rent after the five-year period?
At the end of the five-year period, the property owner can request the discharge of the security for the funding agreement at their own expense.
Who can I rent the ARU to during the five-year period of the agreement?
Eligible tenants must have household incomes below the maximum income levels. See the Tenant Household Eligibility Criteria section for more information.
We only forgive loans for ARU projects that have continued to meet the terms of the agreement for a five-year term. Forgiveness would occur at a rate of 20% per year of compliance with the terms of the program.
If during the five-year term, the ARU is no longer rented following the terms of the agreement, the property owner must pay the forgivable loan at a prorated rate.
How much funding is available within the program?
The program has an initial funding commitment of $1.25 million.
I just applied to the program. When can I expect to hear back and how long is the process?
We review completed applications and respond to each within two weeks. If the project is eligible, we will send a conditional letter of commitment indicating the applicant has one year to complete and occupy the unit following the terms of the program.
Contact
Building Services
1211 John Counter Boulevard
Kingston, ON K7K 6C7
buildingpermits@cityofkingston.ca
Phone: 613-546-4291 ext. 3280
Contact
Housing Services
housing@cityofkingston.ca
Phone: 613-546-4291 ext. 4949
The City of Kingston acknowledges that we are on the traditional homeland of the Anishinaabe, Haudenosaunee and the Huron-Wendat, and thanks these nations for their care and stewardship over this shared land.
Today, the City is committed to working with Indigenous peoples and all residents to pursue a united path of reconciliation.
Learn more about the City's reconciliation initiatives.
