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In Toronto and other municipalities that UrbanToronto reports on, many redevelopments mention rental replacement suites as part of the proposal. This is a situation triggered when an existing building on the site had rental suites already, as long as there were enough of them to reach a threshold number, past which developers are required to include suites in the new towers that will first be offered to previous tenants at similar rents. The intent is to preserve existing rental stock and protect residents from long-term displacement, with updated implementation guidelines adopted in 2025 for Toronto itself.
While the minutiae differs from city to city, the intent and process is generally the same in each. In Toronto, rental replacement is governed by Chapter 667 of the City’s Municipal Code and Section 111 of the City of Toronto Act, 2006. Buildings with six or more rental homes slated for removal must provide an equal number of replacement units matching original sizes and types, with rents kept similar to pre-demolition levels under provincial guidelines. This ensures tenants — often temporarily displaced to other accommodation — can return to their neighbourhoods after construction.
As part of the approval process for the new building, the applicant must obtain a Section 111 permit that includes a rental housing demolition plan and a detailed tenant assistance strategy. Tenant assistance plans outline financial compensation, temporary relocation, and a right of return once construction is complete. Replacement homes must match the original bedroom count and are typically built within the redevelopment, though on occasion, replacement suites may be approved at a nearby site. Developers are required to maintain communication with affected tenants throughout the process, and construction cannot proceed until Council has secured a legal agreement guaranteeing these obligations.
The policy aims to preserve aging purpose-built rentals and prevent permanent tenant displacement, particularly in high-demand areas near transit where many postwar apartments rent below market. The approach is part of the City’s broader housing strategy to maintain affordability while supporting intensification. By mandating one-for-one replacement and a right of return, the framework aims to keep communities intact and prevent the loss of moderately priced rentals that serve thousands of households across Toronto.
Despite its goals, rental replacement has faced criticism from both tenants and developers. From time to time, tenants and advocates report smaller new units and inconsistent enforcement of rent levels, leading to disputes after completion. Developers argue the requirements add cost and complexity, especially where temporary relocation or phased construction is needed. Debate has intensified as the Province considers regulations under the More Homes Built Faster Act that could narrow municipal authority over rental replacement, prompting concern from the City and housing advocates that local protections could be weakened.
In March, 2025, City Planning released its updated “Implementation Guidelines for Rental Replacement”, modernizing how the City enforces rental-unit replacement. The changes reflect stakeholder feedback and include a newly published tenant-friendly rental replacement handbook, zone-specific rent-gap data drawn from Canada Mortgage and Housing Corporation figures, additional tenant-consultation meetings (at notice to vacate and occupancy milestones), and public data tracking of demolition and replacement timelines. They also mark a firm commitment to strengthened oversight of Section 111 agreements, requiring landlords to submit unit-allocation frameworks before offering replacement units, and report annually on rent levels and occupancy.
For developers, rental replacement adds costs to their new development, but the new buildings are typically much, much larger than what is being replaced, allowing the cost of the replacement units to be amortized over the large number of new market-rate suites. Replacement suites will, therefore, directly shape design, phasing, and financing for new buildings. Applications involving existing rental buildings must include a housing inventory, detailed rent roll, and tenant assistance plan at the outset, with commitments secured through legal agreements before demolition permits are issued. Projects often require additional time for City review and consultation with tenants, which can affect project timelines and pro formas. While the requirements introduce more upfront work, they are increasingly viewed as a necessary component of responsible intensification. For tenants and community members, rental replacement terms in planning reports provide key insights into how redevelopment will maintain affordability and continuity in neighbourhood housing stock.
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From 2015 to 2017, UrbanToronto and its sister site, SkyriseCities, ran an occasional series of articles under the heading Explainer. The series was revisited, expanded, and articles were updated where necessary in 2023. Now, additions to the series will occur on occasion, like this article. Each Explainer takes a concept from Urban Planning, Architecture, Construction, or related topics covered on our sites, and presents a detailed look at it. While you may already know what some of the concepts covered by the Explainer articles mean, others may be new to you. To read other Explainer features, click on the magenta Explainer box at the top of the page. If you have other planning terms that you would like to see detailed in an Explainer article, or thoughts about this one, please share them via the comment field below!
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UrbanToronto’s research and data service, UTPro, provides comprehensive data on construction projects in the Greater Golden Horseshoe—from proposal through to completion. Other services include Instant Reports, downloadable snapshots based on location, and a daily subscription newsletter, New Development Insider, that tracks projects from initial application.