How to Turn a Single-Family Lot into a 12-Unit Cash Flow Machine? With as-of-right zoning and strategic lot severance, Toronto’s detached lots are no longer just home sites—they’re mini multifamily assets waiting to happen. Here’s the exact playbook.

Modern 6-unit multiplex under construction in Scarborough, Toronto—example of as-of-right missing middle housing development
Construction of a 6-unit multiplex in Scarborough—no rezoning, no delays, just smart infill development.

Toronto real estate has always rewarded the bold. But right now, it’s rewarding the smart.

A quiet shift in zoning has opened the door to 6-unit multiplexes in Scarborough North. And if you know how to sever lots strategically, you can turn a basic single-family property into a 12-unit rental powerhouse—without a tower, without rezoning, and without delay.

Here’s how the numbers work. Here’s how the approvals work. And here’s how small developers can outmaneuver the big guys—6 units at a time.

Step 1: Start with the Right Lot

You’re looking for a detached or semi-detached home on a wide or deep lot in a residential neighborhood.

Ideal criteria:

  • At least 60 feet wide (60+ even better)
  • 100–150 feet deep
  • Precedence for lot severance within the area
  • No heritage designation
  • Scarborough North has lower land costs and big lots

The magic? You don’t need rezoning to build and can maximize land value

Step 2: Sever the Lot into Two Parcels

Lot severance—also known as consent to sever—is the process of legally splitting one lot into two.

You do this through:

  • A formal application to the Committee of Adjustment
  • A professional land survey
  • A planning rationale (from a planner or architect)

Yes, this step adds extra time (1-2 months). But the land lift is massive! —and reduced costs building two multiplexes side by side.

Once severed, each new lot becomes a standalone legal parcel eligible for its own 6-unit building. That’s 12 total units.

Step 3: Design Two As-of-Right 6-Plexes

With two legal lots in hand, you design two buildings that each conform to the new as-of-right rules:

  • Max height (usually 10m)
  • Max lot coverage
  • Required setbacks
  • Only a minor variance needed to expand frontage

Use a designer or architect who understands the new multiplex framework. You want:

  • 1 or 2-bedroom units
  • Walk-up access
  • Simple mechanicals
  • Durable finishes

This isn’t luxury—it’s smart, efficient rental housing. Think families, essential workers, long-term tenants.

Step 4: Finance the Build with CMHC MLI Select

Here’s where things really get interesting.

Each 6-plex qualifies as purpose-built rental, meaning you can finance construction with CMHC-insured debt under the MLI Select program.

That means:

  • Up to 95% loan-to-cost
  • 50-year amortization
  • Below-market interest rates

When you stack those terms with the affordability and energy-efficiency points you can hit with a new build, your cash flow becomes real.

Step 5: Lease, Stabilize, Refinance, Repeat

Once construction wraps (typically 12 months from permit), lease up!

  • 12 doors at ~$2,200-$2,800/month = ~$369,600 gross rent/year
  • Add in internet and parking for NOI value add
  • Reduced management fees, both buildings serviced together.

With that NOI, your CMHC take-out financing can easily refinance your original debt and return equity back to investors

Now you own a fully stabilized 12-unit building—spread across two side-by-side properties—with strong, predictable monthly income.

Rinse and repeat.

Why This Strategy Works in 2025

Big developers are chasing rezoning, land assemblies, and 30-storey towers. That takes years.

Small developers who stay focused on as-of-right, gentle density have a huge edge:

  • Lower risk
  • Faster timelines
  • Government-backed financing
  • Immediate affordability impact

The land is out there. The zoning is in place. The opportunity is live right now.

But most people are still thinking in duplexes—or worse, single-family.

This isn’t theory. This is what we’re building today.

Final Word: Be the One Who Sees the Opportunity Early

Toronto doesn’t need more luxury condos. It needs small-scale, high-quality rentals that normal people can actually live in.

As-of-right zoning + lot severance = the clearest path to 12-unit infill projects without a rezoning fight.

If you own land, want passive income, or are raising capital—this is the model to build.

Let’s build, baby, build.