The fourplex that isn't: Ottawa's four-unit zoning is still under appeal

If you have been reading anything about Ottawa's new zoning by-law over the past few months, you have seen the line: four units on every serviced residential lot, as of right. Contractors are advertising on it. Land is being priced on it. Listing remarks are starting to lean on it.

It is not true today. Not in a technicality sense. In a the-provision-is-under-appeal-and-is-not-in-force sense.

What actually happened on July 2

Zoning By-law 2026-50 was enacted by City Council on March 11, 2026. The City then received 25 appeals to various sections of it, which froze the whole thing.

On July 2, 2026, the Ontario Land Tribunal made an oral decision ordering that the parts of By-law 2026-50 not caught up in those 25 appeals may come into force, retroactive to March 11. The majority of the new by-law is now live. That is the part that got picked up and repeated.

The part nobody reported

On July 7, Derrick Moodie, the City's Director of Planning Services, sent Council a memo explaining what the OLT decision actually left out. His words, not mine:

"The most significant impact is for Neighbourhood Zones where appeals remain regarding the number of units permitted on a lot and rear yard setbacks."

Read that again. In Ottawa's Neighbourhood zones, N1 through N6, which is where most of the city's houses sit, the number of units you are allowed to put on a lot is precisely the thing still stuck at the Tribunal. The memo's Document 1 lists Section 801 subsections (5) and (6), Table 801A row (i), 801(7)(f), 801(7)(h)(i), and part of Table 801B among the provisions not yet in force. Rear yard setbacks in subzones A through C are out as well.

So the single most-quoted feature of the new by-law, the one driving land pricing conversations across the city, is the one feature that did not come into force on July 2.

What you can actually build right now

Until the appeals resolve, building permit applications deemed complete on or after March 11, 2026 have to comply with both by-laws, with the most restrictive provision of the two applying. For unit counts in Neighbourhood zones, that means the old rules.

The City's own building permit page, live today, still says it plainly: where permitted, the number of dwelling units on a lot including the principal unit must not exceed three total.

That gets you a principal dwelling plus two additional units, structured one of two ways:

• Two separate apartments inside the same building as the principal dwelling, or
• One apartment in the principal building plus one coach house on the same lot

That is on fully serviced lots. If you are on septic or a well, you are capped at one additional unit, and you need the Ottawa Septic Office to confirm your system can carry the load before you get excited about anything.

A few things that have not changed and are worth remembering, because they are genuinely favourable:

No additional parking is required for these units. If you do add a space, it cannot go in the front yard, but tandem parking in the existing driveway is fine. And on design responsibility, the Building Code lets a homeowner take it on for one additional unit. Push to two units inside the principal building and you need someone registered under a BCIN. That is a real line item people forget to budget.

Why this matters for your underwriting

If you have been shopping Neighbourhood-zoned land at a premium because of the four-unit story, understand what you actually bought. You bought an option, not a permission. And nobody can tell you when it converts. Twenty-five appeals do not resolve on a schedule anyone can hand you, and the City itself is only saying it will update the online by-law text to flag appealed provisions by the end of July.

Three units is real. It is available today, it is provincially backed, and the math on it is well-established. I walked through the numbers on the two-unit version of this in the basement secondary suite math back in June, and none of that changed on July 2.

Underwrite three. If four arrives later, that is upside you did not pay for. That is the whole discipline.

The rate picture is not coming to rescue a thin deal

The Bank of Canada held its policy rate at 2.25% on July 15. That is the sixth consecutive hold. The Bank Rate sits at 2.5%. The Bank expects inflation to ease to 2.5% in the second half of this year and reach the 2% target in early 2027.

Six holds in a row is the market telling you something. The "buy it thin and refinance when rates drop" thesis has been wrong for a full year now. If your deal only works after a cut, you do not have a deal, you have a bet on the Governing Council.

The demand side is real, but read it carefully

OREB's June numbers: 1,518 sales, down 4.9% year over year. Average price $733,648, up 1.3%. Median $655,000, down 1.3%. Months of inventory at 3.3, up from 2.8 last June. Sale-to-list held at 98.5%, unchanged, and median days on market moved only from 19 to 22.

That is a balanced market with more pricing discipline, not a correction.

For anyone building rental units, the number that matters most is buried in OREB's release citing CMHC: Ottawa's primary rental vacancy rate was 3.0% in 2025, but the condominium rental vacancy rate was 0.6%. Demand for the kind of unit a secondary suite produces is tight.

The counterweight is the pipeline. Ottawa had 17,212 housing units under construction in May, with nearly 14,000 of them apartments. That supply is aimed at exactly the tenant you are hoping to rent to. Completed and unabsorbed inventory is still low at 37 apartment units, so this is not an oversupply story today. It is a question of timing, and if your suite delivers into the back half of that wave, your rent assumption should not be today's asking rent.

What I would actually do

Check the zoning map before you write an offer on anything with a multi-unit thesis. The City is adding an asterisk suffix to zone codes under appeal, so a *_N3B tells you the designation itself is contested. If your target address is site-specific, Document 1 in that July 7 memo lists the exact properties and areas where zoning is not yet in force, and it is worth two minutes of your time.

And if an agent tells you a Neighbourhood-zoned lot is a fourplex play, ask them which subsection of 801 they are relying on. The answer will tell you a lot about who you are dealing with.

If you are looking at a property with a multi-unit angle and want the zoning checked properly before you commit, call me at 613-262-6545 or email fil@613realtor.ca. I would rather spend fifteen minutes on it now than have you find out at permit stage. You can also browse what's currently listed if you are still building a shortlist.