What is an additional dwelling unit (ADU or ARU)?

An additional dwelling unit (ADU) is a separate living space within a home or on the same property as a house. These units typically have a kitchen, bathroom, living and/or dining area, and area to sleep. Examples of ADUs may include: a basement apartment or an in-law suite.

The City of Guelph permits attached and detached Additional Dwelling Units (ADUs) (also called Additional Residential Units - ARU) on a single residential property.

Detached ADU Regulations in Guelph:

The City of Guelph allows for the construction of detached ADUs (such as backyard tiny homes or converted garages) subject to specific zoning requirements.

• Number of Units: A maximum of four residential units are permitted on a serviced lot (the principal dwelling plus two ADUs in the main building, or two detached ADU’s in a detached building and one principal unit and one ADU within the main house). There are a few options that might comply with the zoning bylaw and quality for the CIP grant program.
• Location: Detached ADUs can be constructed in a rear or interior side yard.
• Size: Each detached ADU can have a residential floor area of up to 80 square meters (861 square feet).
• Height: The building can be up to 6.1 meters tall, which allows for two storeys.
• Yard Coverage: The detached building, including other accessory structures, cannot cover more than 30% of the yard.
• Permits and Registration: A building permit application is required, and all ADUs must be registered with the City using the Small Multi-Unit Residential Registration form.

The City of Guelph Affordable Housing Community Improvement Plan (CIP) grant program to help offset the costs for units committed to being rented at an affordable rate.

The City is considering increasing eligibility and funding amounts under the Affordable Housing Community Plan (CIP) grant program to spark more interest in the program before the end of 2026. The increase is on the site servicing side for homeowner applications. This should be particularly helpful for the construction of detached ADU’s and increasing number of units in an existing house.  Of 26 ADU’s that can be supported through the program as of October 2024 eleven ADU’s received funding from the program. Of these only one was a detached ADU. All provincial funds in this program must be used by the end of 2026. Homeowners can currently receive up to $50,000 as part of this grant program (with conditions).

The only detached additional dwelling unit constructed under the CIP program up until October 2025 was constructed in Guelph’s south end by AVE Consulting.

‍The detached 861 square foot two-bedroom one-storey bungalow with timber framed front porch was constructed and received just over $42,000 in grants under CIP program (this was more than 10% of total project cost). The cost of construction after the grant was under 350K. With a 50K downpayment and a 300K mortgage the monthly mortgage at 4.24% interest rate for 30 years for monthly mortgage would be about $ 1,474.06. With a super insulated home you can probably expect to pay 150 to $175 per month for electricity, water and gas, averaging over the year = $1649.06 in monthly operating costs. The maximum rental rate for a two-bedroom unit under the program is $1,740 to be considered affordable. So even if monthly utility costs were $275 per month this unit would still be considered affordable for the occupant. This situation is ideal for building an affordable home for adult children that are unable to afford to get into the broader new home market. Time is running out to take advantage of the CIP grant program (monies must be paid out by the end of 2026).

For further information on a detached ADU constructed under the City of Guelph CIP program in 2025 see projects.

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