Building 4–8 units on your Halifax ER-3 lot is now easier than ever. Thanks to zoning updates in 2024, you can construct multi-unit properties with fewer restrictions, making it a great time to invest in Halifax's growing rental market. Here’s what you need to know:
- ER-3 Zoning Basics: Allows up to 8 units on eligible lots, with 12-metre height limits and no parking minimums.
- Lot Requirements: Minimum lot size of 325 m² for 1–4 units; larger lots needed for more units.
- Cost Estimates: $160,000–$200,000 per unit, with energy-efficient builds costing more.
- Incentives: No federal GST or Nova Scotia’s provincial HST on new rental developments.
- Approval Process: Simplified permit system and online tools to check zoning eligibility.
- Financing Options: CMHC programs offer up to 95% financing for energy-efficient projects.
Halifax’s population growth and low rental vacancy rates make this a solid investment opportunity. Start planning your project by confirming your lot’s zoning, budgeting for construction, and choosing the right financing.
Halifax ER-3 Zoning Rules for 2025
Zoning Rules and What You Can Build
Halifax's ER-3 zoning is designed to offer a middle ground between single-family homes and high-rise developments, making it possible to build a variety of housing types. Whether you're considering a single-family home, a duplex, townhomes, or a small multi-unit building with up to eight units, ER-3 zoning provides the flexibility to meet these goals.
For projects involving one to four units, the minimum lot size is 325 square metres, with a minimum frontage of 10.7 metres. If you're planning for more units - up to a maximum of eight - you'll need additional space proportional to the number of units you intend to build.
Height limits are set at 11 metres, though pitched roofs can extend this to 12 metres, generally allowing for three storeys. Lot coverage is typically capped at 40%, though this can vary between 35% and 50% in specific areas. Setback requirements include a 6.0-metre front setback and side setbacks ranging from 0.5 to 4.5 metres.
These guidelines aim to balance density with liveability, and recent updates have expanded the opportunities for development in ER-3 zones.
2024–2025 Changes to ER-3 Zoning
In June 2024, Halifax made some major updates to its zoning rules to address the housing crisis and encourage the creation of more housing options. Backed by $79 million from the federal Housing Accelerator Fund, these changes aim to deliver 15,000 new units over three years [1]. A key change was replacing the restrictive ER-1 zoning - which only allowed single-family homes - with the more flexible ER-3 designation, permitting up to eight units on eligible lots [1].
"You cannot build affordable housing if you were not allowed to build affordable housing. The previous zoning was too restrictive to build any kind of housing." – Joseph Kirby, co-founder of More Homes Halifax [4]
Another significant update eliminated minimum parking requirements in both regional and suburban areas [1]. This change reduces construction costs and allows more of the lot to be used for housing. Halifax also introduced a streamlined approval process, part of its broader effort to create up to 200,000 new housing units in the coming years to combat the housing shortage [4].
These updates simplify the planning process and make it easier to bring housing projects to life.
How to Check if Your Lot Qualifies
Halifax offers an interactive online mapping tool to help you determine your property's zoning and specific restrictions. By entering your civic address, you can confirm whether your lot falls under ER-3 zoning and check for height restrictions or other considerations [5]. This tool has been available since the updated zoning rules went into effect on June 13, 2024.
If your property is within a Heritage Conservation District Study Area, it may be rezoned to ER-2 instead of ER-3. Keep in mind that ER-2 zoning allows for fewer units [5]. ER-3 zones are typically located along major transit routes or in areas where townhomes were previously permitted, ensuring convenient access to public transportation and existing infrastructure [2].
For more detailed guidance, you can contact Halifax's municipal planning staff at haf@halifax.ca [5]. Remember, the number of units you can build depends on your lot size - larger lots can accommodate up to eight units, while smaller lots may support fewer. Take advantage of these tools and resources to navigate the process with ease.
How to Build 4-8 Units on ER-3 Lots
Planning Your Project and Checking Feasibility
Before diving into a multi-unit development, it's crucial to evaluate your lot's capacity and financial feasibility. Start by confirming that your lot meets the requirements for the intended density.
Next, determine the type of housing that best fits your lot. ER-3 zoning allows for various housing options, including single-family homes, duplexes, three-unit dwellings, townhomes, backyard suites, and secondary suites [2]. The right choice depends on your lot's dimensions and local rental demand. For example, a narrow lot might be ideal for townhomes, while a wider one could support a small apartment building.
Halifax's booming population underscores the growing demand for rental properties. Since 2016, the city's population has doubled, with a 4.5% increase from July 2021 to July 2022 [6]. This rapid growth has contributed to a housing shortfall of 17,500 units as of late 2022 [6], making rental developments a promising investment opportunity.
Budgeting is another critical step. Construction costs can vary widely depending on factors like unit size, finishes, and energy efficiency requirements. Beyond the actual building expenses, account for design fees, permits, site preparation, and financing. A common mistake is underestimating total costs by focusing solely on construction.
Financing is also key during the planning phase. Traditional construction loans often require a down payment of 20–25%. However, programs like CMHC MLI Select can provide up to 95% financing for energy-efficient projects, which can significantly impact your upfront costs and long-term cash flow.
Once you've confirmed the project’s feasibility and explored financing options, you can move forward with securing permits and meeting design requirements.
Getting Permits and Meeting Design Requirements
After assessing feasibility, the next step is to tackle detailed design and permit approvals. Halifax has streamlined its permitting process to address housing needs, but you'll still need to meet specific requirements. Submit detailed plans that demonstrate compliance with ER-3 zoning and the Building Code.
The 2025 Regional Plan introduces additional considerations, particularly for environmental impact. For instance, watercourse buffers are standardized at 30 metres, extending to 100 metres for primary municipal water sources [7]. Energy efficiency requirements now include provisions like "electric vehicle ready" parking spaces [7]. If your lot is in a heritage district, such as Schmidtville, you’ll also need to adhere to additional design reviews as outlined in the heritage by-law [2].
For any questions or guidance, you can reach Halifax municipal planning staff at regionalplan@halifax.ca [7]. The Planning & Development Permit Office is located at 5251 Duke St, 3rd Floor, Suite 300, Duke Tower, Halifax [8][9].
Construction Timeline and Getting Occupancy Permits
Building a 4–8 unit structure typically takes 6–12 months, depending on the complexity of the project and weather conditions. The process starts with site preparation and foundation work, followed by framing, mechanical and electrical installations, insulation, drywall, flooring, and finishes. Inspections are scheduled throughout these stages.
Halifax's winters can cause delays, so many builders prefer starting construction in the spring to avoid disruptions during critical phases.
Municipal inspections should be planned at key milestones. If your project involves engineers, architects, or interior designers, ensure they conduct field reviews as required by the Nova Scotia Building Code Regulations [10]. These professionals must submit Schedule "A11" before you can obtain an occupancy permit [10].
The final step is securing your occupancy permit, which is mandatory for all buildings (except single-family homes) before they can be occupied [9]. You can apply online through Halifax’s customer portal, and a final inspection will be required [9]. The permit remains valid unless there’s a change in operator, floor area, or building use. If any of these changes occur, a new occupancy permit will be needed [9].
Keep in mind that the Nova Scotia Building Code Regulations were updated as of 1 August 2025 [11]. Make sure your construction team adheres to the latest standards.
Design, Costs, and Financing Your Build
Design Requirements and Tenant Features
ER-3 zoning in Halifax allows for a variety of housing types, such as duplexes, townhomes, backyard suites, and secondary suites [2]. The best choice depends on your lot's size and the local rental market. A narrow lot might be ideal for townhomes, while a wider property could support a multi-unit building.
When designing, you'll need to account for key requirements like proper setbacks, parking availability, and accessibility. If your property is in a heritage district, additional municipal design reviews may apply [2].
To attract tenants and increase rental value, consider energy-efficient upgrades like triple-pane windows and ductless heat pumps. High-end finishes - such as engineered hardwood floors, quartz countertops, and custom millwork - can give your property a premium feel, justifying higher rents.
Adding smart home features like keyless entry, programmable thermostats, video doorbells, and in-unit laundry can help draw quality tenants. These features not only appeal to renters but may also reduce maintenance calls, a practical advantage in Halifax's competitive rental market.
Once your design is finalized, careful budgeting becomes the next critical step.
Construction Costs and Budget Planning
Construction costs in Halifax have stabilized since early 2025, after a period of sharp inflation between 2021 and 2023, during which some materials saw annual price increases of up to 40% [12]. That said, labour shortages and trade tensions with the United States still influence pricing, with about 8.1% of total construction costs tied to US-imported materials [12].
For 4–8 unit developments, construction costs typically range from $160,000 to $200,000 per unit. This estimate includes features like ductless heat pumps, triple-pane windows, quartz countertops, and engineered hardwood floors. A four-unit building starts at approximately $640,000.
Certain materials, such as steel and exterior doors, have seen price increases, while petroleum-based products have become less expensive due to lower oil prices. Declining copper prices have also helped reduce electrical costs [12].
It's essential to budget for more than just construction. Additional expenses like design fees, permits, and site preparation are often underestimated but can significantly impact your overall costs.
If you're aiming for CMHC MLI Select compliance - requiring buildings to be 40% more energy-efficient than the standard building code - expect construction costs to reach around $200,000 per unit. While this adds about $40,000 per unit, the long-term benefits, such as better financing options and improved cash flow, can make the investment worthwhile.
Premium upgrades, including Energy Star appliances and window blinds, add roughly $15,000 per unit. These not only enhance tenant appeal and allow for higher rents but also improve financing opportunities by keeping project costs predictable and reducing vacancy periods. This ensures your property is ready for tenants without the usual 60-day furnishing delay.
Financing Options for Multi-Unit Construction
When it comes to financing, traditional construction loans typically require a 20–25% down payment. However, government-backed programs can offer more favourable terms. For instance, CMHC's MLI Select program provides up to 95% financing with extended 50-year amortization for energy-efficient projects [17].
Once you've finalized your cost estimates, choose a financing option that aligns with your fixed-price construction goals. Halifax Regional Municipality has partnered with CMHC on a $79.3 million Housing Accelerator Fund Action Plan, aiming to create 2,600 new housing units by 2026 [17]. This initiative could offer additional incentives for qualifying projects.
For smaller developments (2–4 units), FHA 203(b) loans are available if the owner occupies one unit. These loans require a lower down payment but come with mortgage insurance premiums and owner-occupancy restrictions [14]. USDA 538 loans are another option, offering favourable terms for affordable multifamily housing in rural areas around Halifax [13].
Larger projects may benefit from programs offered by Fannie Mae and Freddie Mac, both of which have $73 billion in volume caps for 2025 [15]. Fannie Mae, for example, finances over 90% of apartments affordable to tenants earning up to 120% of the area median income [16].
"DUS is called 'The Loan We All Own' because it aligns the interests of lenders, borrowers, and investors." – Fannie Mae [16]
It's always a good idea to shop around and compare rates and terms from multiple lenders. Consulting with professionals familiar with Halifax's multifamily property market can help you find the best financing structure for your project.
Matching your financing to your construction strategy is crucial. Fixed-price construction agreements minimize uncertainty, making your project more appealing to lenders. With guaranteed timelines, you can start collecting rental income as scheduled, reducing perceived risks for all parties involved.
Avoiding Problems and Maximizing Returns
Common Problems and How to Prevent Them
When it comes to building multi-unit properties in Halifax, there are some familiar hurdles that can drive up costs and stretch out timelines. One common issue is working with multiple contractors, which often leads to budget overruns - sometimes 30–60% above the original estimates. Why? Because having different teams handle various aspects of construction creates coordination headaches and frequent change orders, both of which can quickly inflate costs.
Permit delays are another sticking point, even as Halifax continues efforts to speed up the approval process. Additionally, it's crucial to evaluate the capacity of water supply and wastewater systems before breaking ground to avoid expensive surprises later on [18].
To sidestep these pitfalls, consider focusing on smaller, faster wood-frame builds. These allow for quicker construction while maximizing lot coverage by expanding the footprint of your building rather than its height. Another smart move is adopting an integrated construction approach - this means placing all responsibilities under a single contract, ensuring smoother coordination and accountability.
By addressing these challenges upfront, you’ll not only streamline your construction project but also set the stage for better tenant experiences and more efficient operations.
Getting Higher Rents and Better Tenants
Halifax’s rental market has plenty of potential for property owners who keep up with pricing trends. For instance, in Q1 2025, the average asking rent was $1,770 for one-bedroom units and $2,230 for two-bedroom apartments. Notably, two-bedroom rents have climbed by 63.4% since 2019 [21]. However, advertised rents have dipped by 4.2% compared to the previous year, reflecting affordability pressures and increased competition from new rental properties [19].
To attract reliable tenants and command higher rents, consider making energy-efficient upgrades. Simple changes like installing smart thermostats, sealing door and window gaps, and swapping out old appliances for energy-saving models can lower utility bills, which tenants appreciate. Replacing worn carpets with hardwood or laminate flooring, sticking to neutral colour schemes, and adding modern security features like smart locks or cameras can also boost a property’s appeal [20]. First impressions matter, so enhancing your building’s entryway with thoughtful landscaping can make a big difference.
With Nova Scotia’s 5% annual rent increase cap for existing tenants extended to 2027, getting your initial rent right is essential. Units that turn over can see rent increases averaging 28%, but retaining good tenants through timely maintenance and clear communication often pays off in the long run. Targeting mid-market renters by offering clean, safe, and moderately modern units strikes a good balance between steady rental income and tenant retention [3].
Streamlined construction and thoughtful upgrades not only help you avoid delays but also make your property more attractive to tenants, ensuring better returns on your investment.
Picking the Right Construction Method
Managing multiple contracts with architects, engineers, contractors, and trades can be a logistical nightmare. This fragmented approach often leads to miscommunication, budget overruns, and extended timelines - sometimes pushing a 12–18 month project well past its expected finish date.
A fixed-price construction method offers a more predictable alternative. By locking in costs before construction begins, you eliminate budget uncertainty. Some contracts even include financial penalties - up to $1,000 per day - for delays, providing extra motivation to stay on schedule. Opting for an integrated design-build service can also streamline the process by consolidating planners, architects, engineers, and construction crews under one contract, reducing the risk of missteps.
With advanced planning and efficient delivery, construction timelines can shrink from 12–18 months to as little as six months. Add in thorough inspections and warranties, and you’ve got a recipe for better quality control and peace of mind. Halifax property owners who choose this approach can save an average of $47,000 in coordination waste while avoiding major budget overruns. Plus, with monthly rents averaging $1,950–$2,100 per unit and a 12–20% annual ROI, the choice of construction method can significantly impact your bottom line.
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Episode 39: Connect East Developments & Kulak Construction Ltd.
Conclusion: Key Takeaways for Halifax Property Owners
Developing 4–8 units on an ER-3 lot in Halifax is shaping up to be a smart investment for 2025. These multi-unit properties can deliver strong returns when approached with careful planning and cost management.
The updated zoning rules bring some serious advantages: no parking minimums, up to 60% lot coverage, and flexible height regulations [22][23]. These changes lower expenses and open up more design possibilities.
To get started, confirm your lot's eligibility using Halifax's interactive mapping tools and familiarize yourself with municipal design requirements. Budget wisely - construction costs typically range from C$160,000 to C$200,000 per unit, depending on efficiency standards. Integrated construction methods can help you avoid the coordination headaches and budget overruns (often 30–60%) that come with more fragmented processes. Plus, energy-efficient, modern designs are a magnet for high-quality tenants willing to pay premium rents.
Timing is another critical factor. Traditional construction methods often stretch projects over 12–18 months, but integrated design-build approaches can cut that timeline down to as little as six months. A quicker build means you can start earning rental income sooner and reduce holding costs.
Halifax's ER-3 zoning updates offer a golden opportunity to grow your real estate portfolio while addressing the city's housing needs. By acting decisively, planning thoroughly, and teaming up with experienced construction professionals, you can achieve solid financial returns and play a role in easing Halifax's housing crunch.
FAQs
What recent changes to Halifax's ER-3 zoning allow for building 4–8 units, and what do property owners need to know for construction planning?
Halifax's New ER-3 Zoning Regulations: What You Need to Know
Halifax has made a significant change to its ER-3 zoning rules, increasing the maximum number of units allowed per lot from 3 to 8. This shift creates new possibilities for higher-density housing, such as duplexes, townhomes, and even small apartment buildings.
However, with these expanded opportunities come additional considerations. Property owners must now navigate updated requirements for lot coverage, setbacks, and height restrictions, all of which can influence the design and feasibility of a project. Larger developments also bring added complexity, requiring careful attention to planning, budgeting, and timelines to ensure success.
Understanding and staying up-to-date with these regulations is key to making the most of your property’s potential while avoiding unnecessary hurdles.
How can I check if my property qualifies for ER-3 zoning in Halifax, and what steps should I take to confirm its eligibility?
To check if your property qualifies for ER-3 zoning in Halifax, start by reviewing the city’s official zoning maps and regulations. These can be accessed through the Halifax Regional Municipality's planning department or online. Find your property on the zoning map to verify its current designation and go over the specific ER-3 zoning criteria, such as minimum lot size, frontage, and permitted uses.
If you need a more detailed assessment, it’s a good idea to contact Halifax's regional planning office or consult a local planning expert. They can clarify whether your property meets ER-3 zoning standards and outline any necessary steps to move forward with your plans. This way, you’ll have all the information you need to proceed confidently with your project.
What financing options can help reduce costs when building energy-efficient multi-unit properties in Halifax?
Halifax property owners have a range of financing options to support energy-efficient multi-unit developments. For instance, Efficiency Nova Scotia offers grants and rebates that can cover up to 80% of specific energy-saving upgrades. Additionally, the Canada Greener Homes Loan provides interest-free financing for improvements aimed at reducing energy consumption. These programs can help ease the financial burden of upfront costs while paving the way for long-term savings.
Taking advantage of these opportunities not only reduces initial expenses but also boosts your property's energy efficiency, which could lead to lower operating costs over time. To make the most of these benefits, careful planning and budgeting are essential.
Related posts
- Halifax & Area Development Guide: Opportunities in Underserved Communities
- Small Multi-Unit Development 101: Building Duplexes and Fourplexes in Nova Scotia
- Halifax’s New Zoning Rules Explained: Up to Four Units on a Single Lot (What It Means for Builders)
- Halifax ER-3 Zoning: Build 4 Units on 375 Square Meter Lots
