What is an Additional Residential Unit (ARU)?

An Additional Residential Unit (ARU) is a self-contained dwelling unit located within the same building, or on the same lot, as an existing residential unit. Self-contained means that it has its own kitchen and washroom facilities, and a separate entrance.

ARUs can be located within the interior of the existing house (for example in the basement), in an existing garage, or by constructing a detached tiny home on the property or as an addition to an existing building. 

London is encouraging this form of residential development to improve housing diversity, affordability and sustainable land use.

Do I need a permit to build an Additional Residential Unit (ARU)?

Yes an approved building permit will be required prior to any construction. Backyard Homes London works with the City of London in order to obtain this permit on the Residential Owner’s behalf.

Why Build an Additional Residential Unit (ARU)?

1. Rental income: One of the most common reasons for building an additional residential unit is to generate rental income. By renting out the unit, homeowners can offset their mortgage or other expenses, potentially turning the property into a source of passive income.

2. Multigenerational living: Additional residential units can provide a separate living space for extended family members such as aging parents, adult children, or relatives. This arrangement allows for shared living while maintaining privacy and independence for each household.

3. Increased property value: Adding an additional residential unit can increase the overall value of a property. The extra living space and potential rental income can make the property more attractive to buyers and investors.

4. Flexibility: Additional residential units offer homeowners flexibility in how they use their property. The unit can be used as a home office, guest quarters, studio space, or even as a short-term rental through platforms like Airbnb.

5. Affordable housing: In areas facing housing shortages or high housing costs, additional residential units can help increase the supply of affordable housing options. ARUs, in particular, are seen as a way to provide more housing units without the need for large-scale development.

6. Aging in place: Some homeowners build additional residential units as a way to plan for aging in place. They may intend to downsize into the unit themselves in the future or use it to provide living space for a caregiver.
   

Can I rent out the Additional Residential Unit (ARU)?

Yes. Many homeowners build ARU’s to be used as additional rental income. In the City of London you will require to obtain a Residential Rental License. If you have any questions our team can help you work through the process.

How do additional residential units affect property value?

Adding an additional residential unit can increase the overall value of a property. The extra living space and income potential can make the property more attractive to buyers and investors.

Are there any funding program in place for building an Additional Residential Unit (ARU) in London?

Yes. There are a few different options for obtaining funding for your ARU project. See funding page here.