A man accused of killing a young woman who went missing in Toronto's gay village last year was denied bail on Monday.

Kalen Schlatter, 21, is charged with first-degree murder in the November 2017 death of Tess Richey.

Richey, 22, was reported missing on Nov. 25 after a night out with a friend in Toronto's Church and Wellesley neighbourhood.

Her mother travelled from the family home in North Bay, Ont., to search for her daughter, and found Richey's body four days later in a stairwell at the back of an alley, just steps from where the young woman was last seen.

Police have said Richey died of "neck compression."

Schlatter, whose bail hearing began last month, let out a sigh in court when Superior Court Justice Brian O'Marra announced his decision.

I feel it's absolutely the right decision. - Varina Richey, sister

​Richey's friends and family present in the courtroom smiled as the decision was read out. The young woman's sisters later said they welcomed the decision.

"I'm as thrilled as I could possibly be, I feel it's absolutely the right decision," Varina Richey wrote in a Facebook message to The Canadian Press.

"It was a hard two weeks contemplating whether or not he might be free to enjoy the summer sun on face, eat his favourite foods and spend time in the company of his family, all things Tess will never get to enjoy again."

She added on Twitter that she would now like to focus her attention on her family and friends.

Hailey Richey wrote in a Facebook post that the bail decision had prompted "tears of joy and grief."

Kalen Schlatter was denied bail by a judge on Monday morning. He is accused of first-degree murder in the death of Tess Richey. (Facebook)

Some of Schlatter's family members who were in court on Monday wept and hugged each other after O'Marra's decision was delivered.

Schlatter was initially charged with second-degree murder in February but the charge was elevated to first-degree murder in March when new evidence emerged, police have said.

Police have said Tess Richey and Schlatter did not know each other prior to the night of her disappearance. They said Richey met Schlatter on the street after she and her friend left a bar.

Investigators also have said surveillance video released by investigators shows Schlatter and Richey together near the alley where her body was found by her mother.

Police faced public criticism for their failure to find Richey after her disappearance. In June two officers were charged with misconduct under the Police Services Act in connection with the case.

Richey's death, and several other disappearances connected to the gay village — eight of which resulted in first degree murder charges against 66-year-old self-employed landscaper Bruce McArthur — led community members to say police were not adequately protecting them.

Toronto Police Chief Mark Saunders announced in December that the force would review its handling of missing persons cases.