Higher value at the lower level.
September 26, 2023
By Christopher Smith
Working in Toronto’s East-end, I tend to see a lot of older homes with unfinished or poorly finished basements, so the need for my clients to reclaim these dungeon-like areas is usually a pressing one.
This has led to a lot of basement renos over the years and until recently, we went about them in one of two ways. The first was to renovate the basement space to serve the family residing in the home and the second was to create a secondary apartment space to generate income. I tend to lean heavily towards family-centric basement spaces for clients.
This singular approach towards basement renovations makes the most sense, as it best serves our clients’ current needs. The question is: Are we tapping into the full potential these spaces offer? What if we could give our clients a remodeled basement and the possibility of a future rental income source? The short answer is we can, and it is not that hard to do so. All it takes is a clear understanding of the requirements for an accessory apartment in an existing space and some extra space planning.
It might be time to consider creating basement spaces with rental conversion optionality built in. There is no reason that today’s single-family space can’t become tomorrow’s multi-unit housing. With a bit of extra planning and consideration, this could be an achievable goal for all basement renovations moving forward. Of course, the possible optionality of a future basement apartment should be an easy sell but how do you do it without blowing budgets?
In today’s competitive rental market, any rental space is in high demand. Based on trends in population growth forecasted over the coming years, they will be in high demand in the future too. The problem is that you need your basement space renovated today and with a growing family, you need that space for yourself.
Adopting a dual-purpose basement renovation strategy can allow you to serve your client’s current space requirements and provide potential future rental income. Given the current housing shortage, I would argue it is time to overhaul our traditional approach towards renovating basements and view these renovations with a different lens. One that positions us, as contractors, to offer a superior product that delivers enhanced value to our clients.
How we get there is surprisingly straightforward, thanks to Part 11 of the Ontario Building Code, which outlines the compliance alternatives our basements need to meet. There are compliance alternatives that really make it easy to have your cake and eat it too.
Please make sure to check the codes and requirements for your area, as they might differ from the ones I am referring to.
For this article, I will focus on the main requirements under Part 11 for fire ratings, HVAC, exits and plumbing. Given this is a future conversion, it is important to understand that we are considering the space an existing space, which means the requirements are different than if it was new construction, which is why Part 11 and not Part 9 apply. This doesn’t get you off the hook in any major way, but it is important to note the requirements for an accessory apartment in an existing space vs. a new one are different. For quick reference, I use TACBOC details BO2a and BO2b as they provide the information graphically, which I find helpful.
Let’s start with fire separations, as a few things fall into this category. We must keep in mind that we are dealing with both fire separations and penetrations.
Using interconnected smoke alarms throughout the home and fire-rated cones in all pot light holes covers 90 per cent of what you need to worry about. You will need to add a 20-minute door for the door opening that is shared with the rest of the home but beyond that there isn’t too much else. A 30-minute rating is required for all unit separations, which is standard half-inch drywall, something you would be doing either way with any finished basement space. I like to upgrade here just because with the older homes, I deal with ⅝ inch type X drywall, which tends to work better at flattening things out, thanks to its rigidity.
No matter what drywall you choose, how you deal with any penetrations in that surface does matter. Metal boxes for all electrical connections are a must and, in most cases, fire donuts for your plumbing penetrations could also be required. Metal boxes for lighting have never been the best option for basements but now you can stick with pot lights if you want to by installing fire cones at the time of conversion. Fireblocking needs to also be considered as your fire rated protection must be continuous. The best approach I have found to deal with this is to double up your top plates. Doing this removes the need to run strips of drywall over the partitions during framing as a double top plate meets the fire stop requirements for even a 45-minute rating.
Everything fire related that is not shown in the TACBOC details can be found under Part 11 compliance alternatives.
Given that both uses of your client’s basement spaces will need HVAC, I would recommend a forced air system, which tends to be the case for most homes anyways. The advantage it provides here is that under Part 11, the future rental space can share the existing forced air HVAC system, with the addition of a smoke detector in either the main supply or return duct. Keep in mind that your HVAC design must meet the requirements for both uses so it is important to consider the eventual layout to ensure adequate heating for all final rooms and spaces, including return air requirements for the final space.
An essential aspect to consider when planning for future rental conversions is providing kitchen, bathroom, and likely laundry facilities. These future plumbing requirements must be incorporated into the initial design. Consulting with a professional plumber can also help you navigate the intricacies of drain and venting specifications. Ensuring that your anticipated plumbing fixtures are within a suitable distance to a vent and main stack is crucial. With some thoughtful planning, you can align future kitchens with existing bathrooms or laundry rooms or in certain scenarios, route future plumbing lines toward nearby mechanical rooms. Investing some time into addressing these potential plumbing needs upfront can make the conversion process significantly smoother in the future.
In most of my cases, a shared exit that goes through the home is all that exists and the option for a dedicated walkout is usually not in the cards. If this is the case for you as well, then you must provide an exit in the form of an egress window to meet the exit requirements. I would recommend putting it in whatever room/area of the basement that would eventually become a bedroom. This helps in two ways, as it meets the natural light
Photo courtesy of Woodsmith Construction Inc.
requirements for the room and gives anyone sleeping a quick way out if there ever is a fire. Your main door to the rest of the house would also have to be a 20-minute rated door and depending on how high off the finished floor the egress window it is might also need steps, but beyond that, you should be covered.
Exits are easy, given that an egress window is probably your best option as it is cost effective and meets the requirements. If you have a bedroom space already planned, then it will be required anyway. If not and you are showing an office or something like that, then I would recommend adding it to that room which should eventually become your bedroom space.
The next big area is space-planning, which also ties into exits. In my area, 90 per cent of the basements don’t have space to put in a separate dedicated exit or even a shared one so we go with door number three and install an egress window. Make sure to read the TACBOC detail carefully before placing your egress window.
In some cases, they can add to other parts of their homes and make it work, using the passive rental income to help pay for the home renovations, but this, unfortunately, is the minority of cases. Single-family homes usually tend to remain that way to maximize the usable space for the homeowners.
Rental or rec room?
A basement renovation is nothing new in my part of the world; it is probably one of the top renovations clients ask for.
Basements in my area need a lot of work to bring up to par and so in most cases we are given a blank canvas to work with. Everything gets moved and replaced, foundations are underpinned, and mechanicals are re-routed. It is what the space tends to become that got me thinking over the years. In most cases, it is designed and built for extra family space because it is desperately needed with cramped quarters on all other floors. There is nothing wrong with that but over the years we have had a housing crisis like no other – rental space is very expensive and hard to find. The need for additional housing has never been greater and this trend shows no signs of changing.
The problem is that with the high costs associated with these renovations, clients had to choose between satisfying their need for more usable space or gaining rental income. Rental options tended to win out a fair bit of the time because income is income at the end of the day, and additions could usually add much-needed space elsewhere in the home.
For years, we have treated these two options as pretty much mutually exclusive but after a careful review of some of the compliance alternatives listed in Part 11 of the Ontario Building Code, we realized this wasn’t 100 per cent accurate. With a bit of forethought and careful consideration in the planning process, we can create a family centric basement space that is easily convertible to a basement apartment space in the future.
Much like everything, the devil is in the details.
The future of basements
We must ask ourselves “what if we could offer something more than just a nicely finished basement” “What if we could also provide the possibility of a rental conversion in the future?” “How would we do it in a way that gives the needed flexibility for each use case?”
If possible, we could add a significant number of new rental units to market by simply converting basement spaces, making today’s single-family home into tomorrow’s much-needed multi-unit. As it turns out it is very much possible and doesn’t require much planning to execute.
At first glance, these use cases are seemingly mutually exclusive but are not so far apart.
Whether on its own or in combination with other additions to a home, a basement renovation always gives great bang for your buck. Over the past few years, we have realized that we have been limiting ourselves to just thinking about our clients’ current needs and not paying much attention to how we can address the possible future ones, especially when it comes to the convertibility of the basement space from single family to multi-unit. What does it really take to make sure that every renovated basement space can be converted into apartment space, if and when the need becomes available?
What if we could design and build with two plans in mind? A purpose-built space for today and a conversion opportunity for tomorrow. We have done lots of basement apartments over the years, but they are few and far between when compared to the family-oriented basement spaces we have done. Tomorrow offers something wholly different however in that studies show people tend to downsize as they get older and the needed space of today becomes the unused space of tomorrow.
I am hopeful that by applying this more strategic approach to our basement renovations, we can unlock added value in every project. Allowing us to not only create inviting family spaces but also lay the groundwork for potential income-generating units. By ensuring we have our bases covered, with fire ratings, HVAC, exits, plumbing, and space, we can successfully integrate future rental conversion possibilities into our current renovations.
As we continue to operate in this ever-evolving housing landscape, let’s embrace the change and rise to the challenge. Let’s rethink our traditional approach towards basement renovations, and instead, let’s design and build with the future in mind. Ultimately, our ability to deliver enhanced value through strategic basement renovations isn’t just good business sense; it’s a commitment to serving our clients better today and tomorrow. Providing an attractive prospect for many homeowners especially considering the current housing shortage, one which carries the added potential of setting you apart as a forward-thinking contractor who not only meets the needs of today but also tries to anticipate your client’s future needs. Something that in today’s competitive marketplace, could be a deciding factor.