Are laneway suites in Toronto a solution to the housing affordability crisis? From the length of time it takes to save a down payment, to the housing supply shortage driving up prices, many prospective homebuyers are being priced out of North America’s fourth-largest city.

In recent years, many public policymakers, industry professionals and community activists have proposed a series of measures to address housing affordability in this major urban centre.

Real estate experts contend that the best answer to Toronto’s housing woes is to create more supply, by removing exclusionary zoning bylaws and supporting the construction of new homes. One concept that has garnered support from city hall is the development of laneway suites.

So, what are these residential units anyway, and can they help alleviate the sky-high housing market? Let’s explore!

Building Laneway Suites in Toronto: What Homeowners Need to Know

A laneway suite is a type of property that is a detached secondary unit, typically located in the backyard or back alley of densely populated cities.

While some will describe it as a newly designed mid-block property big enough for a couple of bedrooms and space for a family, others view it as a small, detached apartment above a garage that belongs to the primary house.

The laneway suite shares the main home’s water, sewer, gas, electric and waste collection services. Also known as “infill houses” or “garden suites,” these units can never be standalone, commonly likened to a basement apartment. The difference, of course, is that you enjoy more light, windows, fresh air, and the myriad of benefits that a typical above-grade apartment offers.

Experts argue that laneway suites tackle under-utilized spaces, make communities more sustainable, and create equity for the population. Moreover, there are other perceived advantages, such as respect for the character of a neighbourhood, addressing multi-generational living needs, and slowing the pace of development. Others also see it as a rental income opportunity, allowing the homeowner to generate revenue or support retirement plans.

Toronto officials got on board with the idea, launching the Laneway Suites Initiative in June 2018. This program incentivizes homeowners to produce secondary laneway suites.

“This is one of the ways we can get more housing options built and part of the City’s Expanding Housing Options in Neighbourhoods plan. We want to help people grow more housing options in neighbourhoods across Toronto,” said Mayor John Tory in a statement.

Are you interested? Here is what you need to know before you take advantage of the program:

  • You can receive up to $50,000 in the form of a forgivable loan.
  • You must own a single-family home on a public lane.
  • You must conform with applicable zoning and other by-laws.
  • You must apply for building permits.
  • You must join the Affordable Laneway Suites Contribution Agreement.
  • You must receive approval for Development Charges Deferral Program for Ancillary Secondary Dwelling Units.

In addition, rent cannot exceed Toronto’s average market rent, and work must begin within 120 days of receiving the confirmation letter. The maximum household income limit is $63,400 for one person and $96,000 for two or more people.

Are Laneway Suites the Answer to Housing Affordability?

Toronto has been home to laneway suites for a century, and it appears that Canada’s most populous city is leading the push in North America. However, other jurisdictions, such as Vancouver and the state of California, are incorporating laneway suites into their public policymaking efforts.

“In the world of planning and urbanism, these homes are generally known as granny flats or accessory dwelling units (ADU). American municipalities have been embracing them for a decade now. California effectively legalized ADUs at the state level in 2017. In Los Angeles, many are being built, and the city government pre-approved a set of standard plans for such dwellings by talented young architects,” The Globe and Mail reported in January 2022.

The average price of a detached home in Toronto is well north of $1 million, while condominium suites are approaching seven figures. The metropolis is begging for more supply to come online. Construction cranes dot the skyline and residential neighbourhoods, but many agree that more needs to be done. Whether laneway suites will enhance housing affordability in Toronto or not remains to be seen. Still, real estate is at the top of mind for public officials, the housing industry, and consumers – buyers and sellers.

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