A new wave of subterranean luxury houses known as “iceberg homes” popping up has the city of Toronto concerned. These detached homes have more living space below ground than above, which might sound harmless at first, but the proposals have raised growing concerns about environmental impacts and construction nuisance.
These homes typically feature large, multi-storey basements (housing, for example, rec rooms, gyms or parking garages) that extend far beyond the surface footprint of the building, allowing homeowners to work around height and density limits in residential zoning.
But critics say they’ve been linked to the “collapse of neighbouring home foundations, shifting ground levels, and excessive noise and vibration during excavation.”
And now, city planners are recommending tighter rules on how deep below-grade residential buildings should be allowed to extend in low-rise neighbourhoods.
In an April 2025 staff report to the City’s Planning and Housing Committee, city staff proposed zoning by-law changes to protect the tree canopy and stormwater systems while responding to the impacts of iceberg homes. The report proposes introducing minimum below-ground building setbacks for low-rise houses and multiplexes, so sprawling basements can’t extend right to the property line.
“Potential impacts of iceberg homes include those related to injuries to mature trees, limitations on new planting opportunities, soil permeability, drainage, groundwater and stormwater management, and embodied carbon,” the report notes, adding that these concerns are tied to the city’s climate resilience goals.
While the number of official iceberg home proposals remains pretty small (a City of Toronto spokesperson told the Toronto Star that 12 applications have been submitted since spring 2024), the issue is still drawing enough attention from neighbourhood groups and environmental advocates, who point to the 2021 Hoggs Hollow project as a warning, where construction of an iceberg home resulted in the removal of a 250-year-old sugar maple and other mature trees in a ravine area. That controversy led City Council to launch a review of how these builds affect neighbourhoods.
The volunteer-run group More Neighbours Toronto wrote in a recent letter to council that iceberg home proposals partly reflect how difficult it has become to expand housing above ground in residential zones, so some homeowners are increasingly looking to add space underground.
“This is not the sign of a city with a healthy housing policy, and as noted by City Planning, these buildings are not good for the tree canopy,” the letter states. “We encourage City Planning to consider increasing height limits in residential zones so that iceberg homes stop being necessary.”
The city will revisit the issue in January.
