Real Estate

Laneway suites ‘perfect solution’ to affordable housing shortage

By Paul Russell, AdvocateDaily.com Contributor

Allowing people to build laneway suites behind their homes is a great way to create low-cost housing while increasing the value of individual properties, says Toronto real estate lawyer Daniel Bernstein.

“The city has a real shortage of affordable housing, and I think these backyard units are the perfect solution, as they create badly needed accommodation at a low cost,” says Bernstein, a founding member with Weltman Bernstein.

According to a CP24 story, property owners in the Toronto and East York district can apply for construction permits for these structures, provided they are no more than two storeys or six metres tall and only contain a single unit. They must also be separated from the rear of an existing home by a distance of five to 7.5 metres, depending on their height, with all the mechanical services and utilities coming from the main house.

“This is an inexpensive way to create more housing, either by building on top of an existing garage or tearing it down and building a new structure,” Bernstein tells AdvocateDaily.com. “Since many will be on the ground level, those will offer easy access for people with disabilities.”

The program is limited to the Toronto and East York districts, with a city report stating that the majority of low-rise residentially zoned properties adjacent to public laneways are located in these two areas, with almost 42,000 units abutting public laneways.

“Laneway suites provide an additional form of contextually appropriate low-rise housing within the city’s neighbourhoods and are part of complete communities,” the report reads. “They can provide more opportunities for people to live close to where they work, shop, and play and … provide additional housing options for households at different ages and life stages.”

Bernstein says these units would be ideal for people who want elderly parents to live close by, or perhaps for adult children who cannot afford to purchase their own homes.

“By living in laneway units behind their parents’ home, young people can save money to buy their own house, while having easy access to work downtown,” he says.

To address fears about increased traffic congestion in the city core, Bernstein says no parking space is required for the units, but instead, there has to be room outside to park two bicycles.

To ensure that emergency vehicles can reach the units, city bylaws require them to be no more than 45 metres from a street, according to the report, which also suggests the city invests in smaller emergency service vehicles that can make it down laneways.

“Many European cities have small emergency vehicles, and in Israel, some paramedics even travel on motorcycles so they can access narrow alleyways,” Bernstein says. “Sometimes, cities have to think outside the box.”

The city is offering two programs to encourage people to invest in the idea, he says, including the Affordable Laneway Suites Pilot Program, which provides up to $50,000 in credit for construction costs.

“It’s really a forgivable loan, provided the person receiving the money owns the property for 15 years,” Bernstein says.

To receive funding, homeowners must agree to rent out the unit for less than the prevailing City of Toronto published average market rent throughout the 15-year period, he says, and the household income for the unit can’t be above $63,400 for one person or $96,00 for two or more people.

The second program to encourage laneway suites is the Development Charges Deferral Program for Secondary Dwelling Units. Those eligible will see development fees deferred for 20 years, then forgiven, Bernstein says, as long as the original homeowner does not sell the property.

“Both of these programs are definite incentives, as the city is trying to encourage affordable housing for people who need it,” he says.

Laneway suites offer a way to generate income and increase property value for eligible homeowners, Bernstein says, giving the example of someone charging $2,000 a month for a one-bedroom unit in their former garage, which would bring in $240,000 over 10 years.

“It’s a great idea to utilize available space in these laneways, as many people’s garages are just used to store junk instead of cars anyway,” he says.

“That is better than renting your basement, where you may still have to share part of your house with the tenant,” Bernstein adds.

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