Are Laneway Homes the New Condos?

I recently sold a laneway home in Riverside and it got me thinking about the opportunity these types of homes offer as an alternative to condo living.

In 2018, the City of Toronto passed legislation to allow laneway housing in select parts of the city and in 2019 opened it up to all of Toronto. With space at a premium in the city, this created options for people to build additional housing on their property to use as extra living space, as an in-law suite or for rental income.

Laneway living is not a new concept, but with the changes in legislation it has started to gain more attention, especially as housing affordability is such an issue. Under this current legislation they are referred to as Laneway Suites. According to the City of Toronto:

“A Laneway Suite is a self-contained residential unit located on the same lot as a detached house, semi-detached house, townhouse, or other low-rise dwelling. A Laneway Suite is typically located in the rear yard next to a public laneway and is generally smaller in scale and completely detached from the main house on the lot.

Laneway Suites provide new rental housing opportunities within established neighbourhoods, providing a wider range of low-density housing options while enhancing neighbourhood and community character.”

Because Laneway Suites are located on the same lot as an existing dwelling, they cannot be sold as a separate unit as per the current legislation. However, prior to this legislation people were severing their lots where they could and building laneway dwellings that could be sold as a stand-alone home, much like the one I recently sold.

This is why you may see them come up from time to time for sale. Today, residents with laneway access who wish to build a Laneway Suite must apply to the city for a permit. However, these dwellings can only be rented, not sold.

Laneway Suites are a great alternative to condos, especially for those who prefer a more residential setting vs the “high” life. They also come in many shapes and sizes as they are built to accommodate the space, giving you more options to suit your needs.

From an owners perspective, there are several pros:

• Additional rental income
• An affordable housing option for your children or in-laws
• Extra living space for entertaining, setting up a home office or studio, etc.
• A chance to downsize to a custom-built home and rent out the main house for additional income

There are some cons as well:

• Laneway suites are expensive to build as they are custom designed to a space, must meet specific requirements and have tight or restricted access that can require special equipment to build
• It can take years to realize a return on investment
• Permit fees are a significant expense

Some homeowners are also taking advantage of this legislation to increase the value of their property by getting plans and approvals done prior to selling their home and including these in the sale. This can be an attractive option, especially for builders or other buyers looking to invest in a laneway suite, by having all the paperwork done for them.

Want to know more about laneway living and what options are available to you? Get in touch with me today!