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The City and the Province realizes there is a severe shortage of affordable living spaces in the city. That is why they tolerate illegal rooming houses and place no legal limit on how many humans can live in one house. Ever notice how when a house catches fire ---- 30 people, 16 cats and 12 dogs and 4 snakes are homeless.
I guess I'm living in a sheltered world, I've not seen that kind of a situation before.
But I can assure you of this......
If you convert a detached garage to a living space, you must get a building permit and odds are almost guaranteed, you will need a minor variance from the Committee of Adjustment with respect to zoning before you will get your building permit.
If you think you can just have at it and convert a garage because you think it's your right, and not have to follow the rules, think again. You may or may not get caught by the city itself, or MPAC. They both have people wandering around inspecting and taking pictures all the time. You'd be amazed what they have on file (I know I was.) Sooner or later, they will catch you.
AND, all it takes is one pain in the ass neighbour to complain and you WILL get caught immediately. The city is going to act on any complaint with respect to an illegal conversion right away. (They figure if you own property, you have money in that property and that's all it takes. (If you're some idiot with not even a pot to piss in, they generally leave you alone because it's not worth it to them, but if you have access to cash, they will want to talk to you.)
Besides, just thinking about what it would take to convert a garage to a living space, it isn't going to be easy. For one thing, you need water and sewage. Not so simple