In Toronto and other communities covered by UrbanToronto, many redevelopment projects mention rental replacement housing as part of the proposal. This is a situation that is triggered when there are already rental apartments in an existing building on the site, provided these are sufficient to reach a threshold beyond which developers are obliged to set up suites in the new towers, which are initially offered to existing tenants at similar rents. The aim is to preserve the existing rental portfolio and protect residents from long-term displacement. In 2025, updated implementation guidelines will be adopted for Toronto itself.
While the details vary from city to city, the intent and process is generally the same in every city. In Toronto, rental housing replacement is governed by Chapter 667 of the city's Municipal Code and Section 111 of the City of Toronto Act of 2006. Buildings containing six or more rental apartments that are to be demolished must provide an equal number of replacement units consistent with the original sizes and types, with rents maintained at pre-demolition levels in accordance with provincial guidelines. This ensures that tenants – who are often temporarily relocated to other accommodation – can return to their neighborhood after construction.
The Dennis with six rental replacement units designed by WZMH Architects for LIUNA, Fengate Properties, The Hi-Rise Group and ITC Construction Group
As part of the approval process for the new building, the applicant must obtain a Section 111 approval, which includes a rental demolition plan and a detailed tenant support strategy. Tenant assistance plans provide financial compensation, temporary relocation and a right of return after construction is completed. Replacement apartments must match the original number of bedrooms and are usually built as part of the renovation. However, replacement housing may occasionally be approved at a nearby location. Developers are obliged to maintain communication with affected tenants throughout the process and construction cannot proceed until the council has reached a legal agreement guaranteeing these obligations.
The policy aims to preserve aging, purpose-built rental properties and prevent long-term displacement of tenants, particularly in high-demand areas close to transport links, where rental prices for many post-war apartments are below market rates. The approach is part of the city's broader housing strategy, which aims to maintain affordability while supporting intensification. By requiring 1:1 replacement and a right of return, the framework aims to keep communities intact and prevent the loss of affordable rental properties that support thousands of households across Toronto.
Despite its goals, rent replacement has been criticized by both tenants and developers. From time to time, tenants and attorneys report smaller new units and inconsistent enforcement of rent levels, leading to disputes after completion. Developers argue that the requirements increase cost and complexity, particularly when a temporary move or phased construction is required. The debate has intensified as the province considers regulations under the More Homes Built Faster Act that could limit municipal powers over rent replacement, raising concerns among the city and housing advocates that local protections could be weakened.
708 Kennedy Avenue with 96 rental replacement units designed by Kirkor Architects Planners for Brosko Property Management Ltd
In March 2025, City Planning released its updated “Rental Replacement Implementation Guidelines,” which modernizes the way the City enforces rental unit replacement. The changes reflect stakeholder feedback and include a newly released tenant-friendly tenant replacement manual, zone-specific rent gap data derived from Canada Mortgage and Housing Corporation figures, additional tenant consultations (at eviction notice and occupancy milestones), and public data tracking of demolition and replacement schedules. They also represent a clear commitment to greater monitoring of Section 111 agreements, requiring landlords to provide master unit allocation plans before offering replacement units and to report annually on rent levels and occupancy.
For developers, rent renewal has added additional costs to their redevelopment, but the new buildings are typically much, much larger than what is being replaced, so the cost of the replacement units is recouped over the large number of new, market-rate suites. Replacement suites will therefore directly influence the design, phasing and financing of new buildings. Applications involving existing rental buildings must initially include a housing inventory, a detailed rental list and a tenant support plan, with obligations secured by legal agreements before demolition permits are issued. Projects often require additional time for city review and consultation with tenants, which can impact project schedules and pro formas. While the requirements entail more preparatory work, they are increasingly seen as a necessary part of responsible intensification. For tenants and community members, rent replacement conditions in planning reports provide important insight into how regeneration will ensure the affordability and continuity of housing stock in the neighborhood.
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