Price the zoning and the approval path before a firm offer, and the same infill lot yields more units, sooner.
On August 4, 2026, Calgary’s rules changed under every developer holding a lot there. Council’s repeal of citywide rezoning returned 99 per cent of affected properties to their earlier zoning, and on lots that stayed in the R-CG zone, the maximum height dropped from 11 m to 10 m and maximum lot coverage from 60 per cent to 55 per cent, with zero-lot-line development no longer permitted. Applications already in process continued under the old rules. A developer who underwrote a Calgary lot in July at 60 per cent coverage and had not applied was, by August, underwriting a smaller building.
That is the infill business in one example. Yield is the product of the rule in force, the site conditions that limit how much of that rule can be used, and the approval path required to use it.
What the zoning lets you build
The as-of-right envelope varies widely across Canada. Ontario requires municipalities to permit up to three units per lot where municipal services are available. British Columbia’s Bill 44 requires at least four units on parcels larger than 280 m² in municipalities over 5,000 residents, and six near frequent transit. Many communities with federal Housing Accelerator Fund agreements have committed to four units as of right. Units, height and lot coverage together set the ceiling, and each should be modelled before an offer goes in.
What the site lets you keep
The ceiling is rarely reachable on every lot. Five site checks decide how much of it a developer can use: frontage and access, including fire department access to rear units; servicing capacity, since four or six units can exceed connections built for one and upgrades fall on the project; ground conditions, where fill, organic soils or a high water table push toward deeper and costlier foundations; stormwater, where on-site detention takes buildable area; and protected trees and setbacks. Each one can take units off the pro forma, and all five can be checked during a conditional period. Additional considerations that impact the development potential relate to parking ratios per unit and applicable landscaping requirements which are market and location dependent.
Which approval path you are buying
Every unit above the as-of-right envelope must be approved, and each extra step adds time and risk. A scheme that fits the envelope may need only a building permit. One that needs a development permit for form and character, as most mid-rise buildings do, adds a council or staff decision: at 372 Martin Street in Penticton, profiled in this issue, the development permit was approved in August 2024 and the building opened just over 25 months later. A variance or rezoning adds a public process and a result that cannot be guaranteed. The right path is the one where the added units are worth the added time.
Six steps for a developer underwriting an infill lot:
• Confirm the rule in force and any pending change. Check council agendas for bylaw amendments, and watch the councils elected on October 17 in B.C. and October 26 in Ontario: a new council can revisit zoning, development charges and permitting priorities in its first year. Treat a filed application as the way to lock in the current envelope.
• Model yield three ways: as of right, with a minor variance, and with a rezoning. Price the time each path adds against the units it gains.
• Book a pre-application meeting with the municipality before a firm offer. Confirm the approval path, servicing and frontage requirements, and any studies the application will need.
• Use the conditional period for a desktop geotechnical review, a servicing check and a tree and setback survey. Any one of them can change the unit count.
• Look at the neighbours as land, not only as constraints. Assembling an adjoining lot can add frontage, allow a lane or single-stair layout to work, and can lift yield more than a variance would. The Martin Street building sits on five legal lots.
• Submit a complete application. A missing study stops an approval clock, and it is the easiest delay to avoid.
Duplex, townhomes or six units? The maximum is not always the best return. A front-back duplex that keeps existing services and avoids frontage works, and fits the as-of-right envelope without a variance, can return more per dollar and reach a building permit faster than a six-unit scheme that triggers a new sanitary connection, on-site detention, a development permit or a variance, which may trigger neighbourhood consultation. On lots with a lane, good ground and transit nearby, the six-unit scheme spreads those fixed costs across enough homes to make it the clear choice. CMHC’s Housing Design Catalogue, with regional versions for every province and territory, is a sound starting point for either, provided the design is adjusted to the site.
Prefabrication is worth pricing on either. The British Columbia Real Estate Association is asking newly elected councils for as-of-right zoning and streamlined permits for prefabricated homes, citing cost savings of as much as 20 per cent and construction waste reductions of up to 70 to 80 per cent. On an infill lot, the savings depend on delivery and crane access from the street or lane, and on foundations built to the tolerances the factory units need.
Developers who price the approval path with the land will pay less for the lots that are slow to approve, and more confidently for the ones that are not. Over a portfolio of infill sites, that discipline is worth more than any single variance.
Underwriting an infill lot? Contact the PRI Team today.
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“After working on both sides of development, the best projects are those with client collaboration.”
Nola Kilmartin, MUP, RPP, MCIP
Vice President, Property & Buildings
nola.kilmartin@priengineering.com