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Toronto’s quietly changing again — but this time, it’s not about cramming more housing units onto every lot. It’s about bringing life and small business back to the block.
The city’s Neighbourhood Retail and Services Study, part of the broader Expanding Housing Options in Neighbourhoods (EHON) initiative, just passed the Planning and Housing Committee. It’s now heading to City Council for final approval. If it passes, this update could reshape how investors approach residential properties across Toronto.
What’s Changing Under the Neighbourhood Retail and Services Study
The latest phase of the EHON Neighbourhood Retail and Services Study is about unlocking small-scale commercial uses inside neighbourhoods that have been zoned strictly residential for decades.
Here’s what’s coming if Council gives it the green light:
Major Streets:
Homes and multiplexes that abut a Major Street will be allowed to add small-scale commercial spaces — like cafés, salons, barbers, clinics, or professional offices — right at ground level. This is huge for investors holding or buying along Toronto’s main corridors.
Neighbourhood Interiors:
Inside the neighbourhoods, the City’s taking a gentler approach. Corner lots or properties beside parks, schools, or existing commercial sites could host limited retail uses — think the return of the neighbourhood café, daycare, or convenience shop.
Home Businesses:
The City is also expanding what’s possible for home-based businesses. You’ll be able to run legitimate small operations from your house or even a backyard studio — a clear nod to today’s live-work economy.
| Category | What’s Changing | Key Details |
|---|---|---|
| Major Streets – More Flexibility | Residential lots that abut a Major Street can include small-scale retail, service, or office uses. |
|
| Neighbourhood Interiors – Gentle Retail Only | Select corner lots and edge properties inside neighbourhoods can host small retail. |
Allowed only if the lot:
Rules:
|
| Home Businesses – Easier Live-Work | Expanded permissions for legitimate home-based businesses. |
|
Why This Matters for Real Estate Investors
For decades, zoning in Toronto drew a hard line between residential and commercial. This update softens that boundary. It doesn’t turn neighbourhoods into retail strips — it just makes it possible to add low-impact uses that make sense in walkable communities.
For investors, that means new optionality.
You can now:
Blend residential and commercial income for stronger cash flow.
Add value to underused properties along major streets.
Attract a better tenant mix — professionals, small business owners, or long-term renters who value convenience.
Future-proof your portfolio with properties that can adapt to mixed-use demand.
In short, this zoning update makes it easier to balance risk and reward through smarter property design.
What’s Next
City staff will monitor the rollout closely — checking results after 100 building permits or business licences (instead of 200) or within two years of the new rules taking effect. They’ll also review:
The economic benefits of cutting red tape for small retail and services;
Safety concerns and the need to limit cannabis and liquor retail in interior neighbourhoods;
And whether major-street permissions should apply only to new construction.
This shows City Planning is serious about testing these changes — but the overall direction is clear: Toronto’s moving toward more flexible, mixed-use neighbourhoods.
The Investor Takeaway
This is bigger than it looks. The Neighbourhood Retail and Services Study isn’t just about adding cafés or corner stores. It’s a signal that Toronto’s opening the door to hybrid real estate models — where residential, commercial, and live-work uses can coexist on the same property.
For investors, it means more options, more creativity, and more ways to increase returns without relying purely on appreciation.
Zoning in Toronto is evolving — the best investors will evolve with it.
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What Toronto Real Estate Investment Is Right For You?
Check out our complete Toronto real estate investment guide for all the details and real-life examples. If you’re ready to dive in, just book a call with us!
