What counts as an additional residential unit
The City defines an ARU as a self-contained unit with its own kitchen, bathroom and sleeping area, inside a house or in a building on the same lot. ARUs replaced what Peterborough used to call secondary suites, and the 2023 by-law followed the province's Bill 23, which requires Ontario municipalities to allow more units on residential lots.
Options
- Basement suite: usually the lowest-cost way to add a unit when ceiling height and egress work
- Garden suite: a small detached home in the backyard
- Garage or coach house suite: a unit above or within a garage
- Second unit within the house, such as a converted upper floor
Step by step
- Check eligibility. Zoning, lot size, setbacks, parking and servicing decide what fits. The City's ARU guide and zoning by-law set the rules.
- Choose the unit type. For detached units, check the City's pre-approved plans, already reviewed against the Ontario Building Code.
- Design to code. Fire separation, interconnected smoke and CO alarms, egress, ceiling heights, sound control, heating and ventilation.
- Apply for the building permit with complete drawings. Incomplete applications are not processed.
- Build and pass inspections.
- Register or license the unit if you plan to rent it, under the City's rules.
Legalizing an existing unit
The City has a separate process for units built before November 16, 1995, and a path for bringing other existing units up to code. If you have an unpermitted basement apartment, legalizing it protects you on insurance, safety and resale.
What it costs
A legal basement apartment in Ontario typically costs $120 to $200 per square foot in 2026. Detached garden suites cost more, often $350 to $450 per square foot, because they need foundations, a roof and their own services. Permit drawings, engineering and servicing upgrades are extra.
Is it worth it?
For many owners, yes: rental income can cover a large share of the cost over time, and a unit for family members can replace the cost of care or a second home. We run the numbers with you at the first meeting.
Sources
- City of Peterborough: Additional Residential Units Guide
- City of Peterborough: Pre-Approved Plans Program
- City of Peterborough: 2023 secondary suites notice
- Builders Ontario: Cost to finish a basement in Ontario (2026)
- MoneySense: Are laneway homes worth it?
Last updated October 2026 by NEUE. Market figures change; your project gets its own fixed price after a site visit.
Questions, answered
Under By-law 23-087, most homes can have up to two additional residential units: two in the house, or one in the house and one in a detached building, subject to the City's rules.
Yes. Every additional residential unit needs a building permit and must meet the Ontario Building Code.
Building plans for detached ARUs that the City has already reviewed for Ontario Building Code compliance, which speeds up the permit process.