Apply for the Additional Residential Unit Grant

Get funding to build an Additional Residential Unit (ARU) on your property. This grant helps homeowners create more affordable rental housing in Waterloo.

Funding is limited — we accept applications while funds are available.

On this page:

1. Check if you can apply
2. Review rent and tenant rules
3. Confirm your project meets requirements
4. Apply for the ARU grant
5. Find other funding
6. Contact us

Check if you can apply

Two types of ARU projects qualify for funding:

1. Detached ARU – up to 50% of project costs, to a maximum of $30,000. These include separate buildings such as a coach or laneway house, usually in the rear yard.
2. Interior ARU – up to 50% of project costs, to a maximum of $20,000. These are self-contained units within an existing or new home, such as a basement apartment or separated suite.

Your property and project are eligible if:

• the property is in an area where ARUs are permitted under Zoning Bylaw 2018-050
• construction has not yet started
• the project meets all program requirements
• the unit will be rented to an eligible tenant at an affordable rate for at least 5 years

We may give priority to projects that create family-sized, accessible, or more affordable units.

You’re not eligible if:

• the project is already completed or occupied
• the work does not meet the city’s definition of an additional residential unit

Review the full program guidelines in Appendix A of the June 2025 staff report (PDF).

Review rent and tenant rules

Check rent limits before applying to make sure your project qualifies.

You must rent the unit to an eligible tenant at an affordable rate for at least five years. Affordable means rent, including utilities, is set at or below 80% of CMHC’s average market rent for Waterloo Region.

We update rent and income limits when CMHC releases new data.

Projects that create family-sized, accessible, or more affordable units may receive priority.

Maximum affordable rent and income

Confirm your project meets requirements

You must confirm that your project meets all building, zoning and rental requirements.

Once your application is approved:

• you’ll have 120 days to get a building permit
• you must finish and occupy the unit within one year

All work must meet the Ontario Building Code and Zoning Bylaw 2018-050, including future amendments.

We recommend getting independent legal advice before signing your agreement. Legal costs are your responsibility and are not covered by the grant.

Apply for the ARU grant

Funding for this program comes from the Housing Accelerator Fund. Grants are issued on a first-come, first-served basis until the budget runs out.

To receive payment, you must:

• finish construction and meet all program criteria
• submit a legal agreement, occupancy permit, construction receipts and a signed lease
• rent the unit to an eligible tenant for at least 5 years
• obtain a residential rental licence before renting — learn about residential rental licenses

Apply for an ARU grant

Find other funding

The Region of Waterloo’s Secondary Suites Program offers up to $25,000 for units rented at an affordable rate for 15 years.

You may also qualify for the Multigenerational home renovation tax credit. This federal tax credit helps with renovation costs when you build a secondary unit for a family member. 

Contact us

Email ARU@waterloo.ca if you have questions or need help with your application.