Despite what many people believe, Toronto laneway houses are nothing new. They have been around a long time. It was no easy task to get these built back in the day. You really needed to be an aficionado of problem solving. You needed to find creative ways to make creative space. Be an architect and design buff with patience in abundance to deal with all of the labyrinth of rules from an unhelfpful City of Toronto. Our city made it next to impossible back then, but those fewer dreamers were able to get them built DESPITE the lack of support.

It feels like laneway houses are a brand new idea though to most people in Toronto. And that’s because it has been made much easier to build now. After seeing laneway houses officially encouraged in Vancouver, the City of Toronto passed a series of bylaws and amendments to the Official Plan to allow for laneway houses as of June 2018. Since then, a few amendments have taken place to clarify some more details and to get the fire department on board in terms of their regulation.

Why did the City get on board with making the process of building a laneway house so much easier? Well, the City of Toronto does want to encourage densification and to relieve the housing shortage. Unused backyards that connect to laneways are one way of supporting that densification mission. It helps to address the housing shortage in the city.

Despite the easier and streamlined rules brought in by the City of Toronto, not all houses with a laneway qualify. You’ll do much better in the old city of Toronto where the vast majority of laneways are approved for laneway houses. Much less so in Etobicoke, North York and Scarborough.

There are also certain rules about fire access and proximity to a fire hydrant. More specifically you need your laneway house to be 45 meters to the street and then 45 meters to the hydrant. There are discussions now on increasing the length of this, but it has not been made official.

In addition your laneway house needs a one meter clearance for the width of walkway to access the nearest street and your property needs to be a minimum 3.5 meters wide in the back. Then there’s the trees. You need to be a certain distance from any large trees.

These rules are in still in flux somewhat. If anything, these rules are increasingly allowing more properties to utilize their backyard to build secondary suites, making it more streamlined and easier to build an additional backyard structure in the future. As an example, there is talk of “garden suites” that don’t have to connect to the laneway. These would essential be similar living structures to laneway houses, but with only a connection to the access street at the front of the house. It would just be in your backyard, regardless if you had a laneway or not. Again, these have have not been approved yet, but may be in the next few years.

But let’s say you do have a laneway and a bigger back yard. Is it worth building a laneway house? Of course the answer depends on your need. Why do you need a laneway house? It is certainly a good idea if you want multigenerational living – parents, friends or kids living nearby. It is also great for income potential. In fact, I believe if you are able to build a laneway house, you will certainly pay less and generate more income than if you bought an income condo or separate property.

In fact, most laneway houses become cashflow positive right away. Why? Because unlike a new condo or a new house, you are not paying for the land, just the structure on the land. So, if you pay $430,000 to $630,000 to build a laneway house, depending on the size, you should be able have an entirely new 2-3 bedroom property with no basement in your backyard.

So what are the drawbacks? Well, the City of Toronto has made it easier, but not easy. It will be a stressful experience. Also, you will own two connected properties that you cannot sell separately at the moment – they are currently considered one property. The laneway sewer lines and electricity will all be connected to the main house. So, it’s one big complex. To date, I have not seen a house and laneway house sold together, but I’m sure it’s coming.

Some may consider this combination of house and laneway house a bonus when buying property. It will certainly increase the value of your property, though you would lose a portion of your yard. At this early stage with so few laneway houses built, it is touchy to quantify how much value an actual built laneway house will add to your property. It is also hard to quantify at this point how much the potential to add a laneway house to your property will add value. it certainly will, but by how much is hard to say right now.

The clear upside so far: You can create an income property in your laneway, maximizing your land usage. You also can build something to live in yourself to the exact specifications. There are now architect firms that specialize in laneway housing. Some like Lanescape offer free assessments as to whether your laneway can have a laneway house. Click here for some of their projects.

It’s the beginning of a golden age for Toronto laneway houses. I think we are going to see a surge of interest in having these built in the next ten years. Laneway houses seem perfect for many Toronto neighbourhoods. It seems like an obvious way to repurpose under-utilized land. I believe the option to build a laneway house or even a garden suite in the future will add to the value of your property. I’m already seeing houses for sale that advertise the potential to build laneway house off their laneways in their promotional material.