Changing Lanes

An in-depth look at the prospects and challenges of Laneway Housing in the GTA. Special Thanks to Mark Wessell & OHB

Laneway housing is not consistent with Toronto’s Official Plan, or good planning in general. It compromises safety, garbage and recycling collection, emergency access, snow clearing, and privacy. And overall, it’s just too expensive and difficult to implement. And with that 2006 assessment from the city’s Technical Services department, laneway housing in GTA was placed in suspended animation, with no immediate prospect of revival for years to come, despite the efforts of Ontario home builders, residents, and other housing advocates in favour of such accommodations.

More than anything, what killed laneway housing in Toronto, recalls Leith Moore, president of Waverly Inc., a long-time advocate of laneway construction, was the concept of building a second home on an existing lot. The main reason Toronto City Council dismissed laneway housing, he says, was the fact that the department report “focused on the difficulty and cost of servicing a second home.”

But 11 years later, efforts are afoot to revive the concept—this time under the guise of a potentially more acceptable model: laneway suites. Thanks to the findings of a report entitled Laneways Suites: A New Housing Typology for Toronto, combined with the advocacy efforts of OHBA and BILD and the unwavering support of city councilors Ana Bailao and Mary-Margaret McMahon, the Toronto and East York Community Council agreed in June to re-examine the viability of laneway housing. As outlined in the report, jointly prepared by Lanescape (a group of planning, design and development professionals) and Evergreen City Works (a charity dedicated to making cities flourish), the game-changing approach this time around is to promote laneway suites versus laneway homes.

The concept of laneway suites is that the current landowner would be allowed to build a secondary building that backs onto the laneway and use this new dwelling only for personal use (e.g. for extended family) or as a rental property. Essential services such as water, gas, and electricity would simply be tied into the services of the primary residence. This, in theory, would make the approval process for laneway construction far less onerous for city officials than having to contend with approvals for a laneway home, where the property is subdivided, sold to new owners and would likely require putting in dedicated new services. It’s an approach that, in the opinion of Moore, is “more of a community-building exercise that puts homeowners in the driver’s seat.”

Based on this new interpretation, Toronto’s planning department has been asked to review and enhance the Laneway Suites proposal after reaching out to residential stakeholders and then report back to the council in the first quarter of 2018, with recommendations that could conceivably fast-track broader adoption of laneway homes as an accepted housing solution. This, in turn, could dramatically transform the residential landscape not only of Toronto but other established communities in Ontario where laneway housing may be viable but has yet to gain acceptance.

Considering Toronto alone boasts 300 kilometers of laneway streets, it’s not too much of a stretch to see how laneway home construction could add up to tens of millions—perhaps 100s of millions—of dollars in new business opportunities for Ontario home builders in the years to come.

Backwards Forwards

Of course, a number of factors have conspired over the past 11 years to bring about Toronto City Council’s 180-degree change in perspective. They range from the city’s increased emphasis on intensification to the model established by major cities such as Vancouver and Portland to actively embrace laneway housing in response to the perceived need for more affordable housing.

Another key motivator was the change in Ontario’s Planning Act in 2011, which requires cities to accommodate secondary units, including laneway housing. Since Vancouver implemented a laneway strategy in 2009, the city has built 2,329 laneway homes (as of 2016), with Calgary a distant second with 458 secondary suites built, according to U of T’s Kelsey Carriere, who just this past April published a 35-page report entitled Backwards: Way Forward – Assessing the Potential for Secondary Suites in Toronto. Carriere says the key to the success, not only in Vancouver but other cities in Canada and the U.S. that she examined in her report, has been to approach laneway housing “as part of a smart growth policy that addresses the lack of rental and affordable housing.”

For example, in support of laneway construction, Vancouver has established guidelines with respect to such details as height restrictions, setback requirements and even solar orientation to avoid shadowing. These guidelines, in turn, help to fast-track the approval process. Carriere contrasts this approach with Toronto’s process for obtaining building permits for laneway construction and renovations in general, which she describes as “arduous and unpredictable.” Says Carriere: “People can invest in drawings that could easily cost $10,000, and then go to the committee of adjustments and at the end of the day not get their permit.”

Paul Rayment, executive vice-president of Foremost Financial, a Toronto-based firm that has financed dozens of builder infill and laneway projects over the past decade, characterizes the long-running battle between planners, architects, and builders with the city’s planning department as an adventure into the unknown.

“With most of these laneway projects, it has always been the uncertainty of not knowing what the city is looking for because they’re one-offs with no real standards to go by,” says Rayment. “So it’s typically quite a time-consuming and costly process that our builder clients have to go through.”

Unlike Vancouver, Toronto’s lack of a standardized approach when dealing with laneway housing has resulted in an average approval process of 12-18 months, a period of time that Rayment estimates could be cut in half with proper guidelines in place.

As a way of accelerating the approval process, Jo Flatt, senior manager for Evergreen, a Canadian organization that seeks to increase the range and mix of housing options available to individuals and families, says the GTA and other Ontario cities should consider replicating specific rules and policies that have been put in place in municipalities such as Vancouver.

In the Evergreen/Lanescape report, an ‘as-of-right’ approach to laneway suites is recommended. “Just like a basement apartment, the city would produce a set of performance standards that must be followed. The average homeowner would apply for a permit, submit their drawings and, once they receive approval, build the suite,” observes Flatt. “So there would be no need for a rezoning application or committee of adjustment.”

But even with the as-of-right approach, Flatt admits there are still technical considerations that cities must contend with, from height restrictions and waste collection (ensuring garbage comes from the main house), to sorting out water usage and determining whether you can or can’t have two connections running from the same line to serve two different units.

Flatt says this approach and the positioning of laneway homes as suites is very much a workaround for city officials. “You have to change the language because when you say you’re building a house, the city gets scared. That’s a level of complication and work they don’t want to take on.”

But then again, there are industry players that are willing to take on these complications until the process becomes more streamlined due to the fact that in cities such as Toronto, there’s a strong demand for homes on lots that can be subdivided.

“There are still parcels of land, including laneway properties, that are being underutilized where, instead of one home, it could accommodate two, three, even four homes,” says Foremost’s Rayment. “It’s just a matter of finding those lots where there could be a garage and multiple parking spots with enough land to build additional units.”

Rayment says these types of projects are profitable for builders. But they also make a neighborhood more accessible for potential homeowners who wouldn’t otherwise be able to buy into a community where the primary residences might start at $2.5 million.

Bob De Wit, CEO of the Greater Vancouver Home Builders’ Association, is an advocate of maintaining the option of subdividing or stratification. The way it is now (in Vancouver), you’re allowed to build laneway homes with certain constraints: You can’t sell it; you can only rent it. But if you could subdivide and sell the property, that’s huge.”

De Wit says other communities, such as Kitsilano, have allowed the stratification of property between such elements as the basement and upper floors or the main house, as well as the garage and main house. So there are potentially as many as four units on one property. Having seen how dramatically homes have appreciated in Vancouver, with Toronto following suit, De Wit believes “the part about laneway homes making living in Vancouver more affordable is becoming less applicable. Encouraging more laneway housing is still a great policy for homeowners in expensive areas to add density. But because prices (for homeownership and renting) in Vancouver have moved up so rapidly, laneway apartments or suites don’t necessarily make it easier for renters to live in nicer neighborhoods.”

When you contrast the views of industry players such as De Wit and Rayment, both of whom are clearly in favour of stratification, with those of Moore and other builders, who are strongly in favour of the laneway suite versus home approach, the reality is there is a demand for multiple forms of laneway housing as well as an appetite for a variety of other infill projects in cities such as Toronto. It’s a demand that’s driven by a combination of consumers wanting to live in the downtown core, city councils interested in pursuing ‘gentle intensification’, and builders and supporting professions seeking to tap into this business opportunity.

One Step, Two Step

But the other, inescapable reality with respect to laneway housing, observes Michelle Senayah, co-founder and director of the Laneway Project, is that if you want to get Toronto’s City Council on board with the notion of accelerating laneway construction, the ‘suites versus second home’ approach is the path of least resistance.

“I think it’s smart to start with laneway suites versus laneway lots,” says Senayah. “It’s a way of upping the city’s level of comfort with laneway development. And then the next step would be to increase severability.” As its name suggests, the Laneway Project takes a much more holistic approach to Toronto’s hundreds of kilometres of laneways, driven by the perception that “laneways have the potential to be vibrant community spaces that support healthy neighbourhoods.”

“More and more people want to move to the low-rise area of mid-town and downtown,” says Senayah. “People also tend to live in smaller households, and what we’re starting to see is multiple generations of family that want to be in close proximity to one another, but not necessarily in the same unit.”

Depending on the neighbourhood, laneway suites could also make the prospect of living downtown more affordable for families that opt to use these suites as a secondary source of income. “It’s an innovative solution on a small scale that gives younger families that might not normally be able to afford to live downtown the opportunity to be on the ground, versus a shoebox in the sky,” observes Mike Collins-Williams, OHBA’s Director of Policy and co-author of the joint OHBA-Pembina Institute Make Way for Laneway report released in 2015. “If you own a house and build a laneway rental suite, it’s a way to generate additional income to help cover your mortgage costs.” At the same time, Collins-Williams says this kind of housing promotes the multiple benefits of greater transit use, less dependence on cars and more support for local retail—all of which contributes to a healthier community.

Recognizing all of the benefits of laneway development for cities with established downtown cores, be it Toronto, Hamilton, Kitchener-Waterloo or elsewhere, what policies must be implemented to make laneway housing an easier pill to swallow for city councils? And equally important for homeowners and builders alike, what can be done to fast-track the approval process?

Apart from the current recommendation before Toronto council of allowing a second dwelling on a lot an ‘as of right,’ McCartney of the Ryerson City Building Institute offers a laundry list of recommendations that include, among other things: allowing services from the main house to piggyback on the laneway second dwelling; removing parking requirements for these second dwellings; and coming up with an emergency access strategy for these spaces.  “The main thing is to develop an easy-to-access as-of-right policy so that people who wish to construct units can do so with a building permit process, rather than a variance or subdivision process,” says McCartney. She also recommends that homeowners engage neighbours in the process so that it becomes “a community building rather than a community dividing experience, and that the spaces of the lanes themselves need to be considered as public spaces.”

Developer Andrew Sorbara offers a unique perspective on what it will take to successfully implement a laneway strategy. He not only has the advantage of living in a laneway home, but is co-founder of Lanescape, with plans to tap into the laneway market as a builder. “We’re going to introduce a series of modular designs for laneway properties that minimize customization,” Sorbara notes. “So not necessarily prefab, but designs and a construction process that limits the construction time.”

But before he even goes down that path, Sorbara and Lanescape are working with the city to create performance standards that can be applied across Toronto. “We need design concepts that create a minimum overlook and maintain privacy, as opposed to three-storey rectangular laneway homes.”

There’s a general consensus among proponents of laneway development to minimize disruption within laneway neighbourhoods in order to gain greater acceptance among both community members and council representatives. That translates to less invasive designs, finding ways to fast-track both the approval and construction process and tapping into existing servicing instead of having to introduce new servicing.

In Vancouver, where these policies are already in place and laneway housing is widely accepted, few builders in Canada have done a better job of parlaying the demand for these dwellings into a healthy business model than Smallworks, which has built 150 laneway homes to date and has an annual target of 36-40 homes. Partner Jake Fry says the key to success is volume and quality. “There are lots of guys—probably 100 in Vancouver alone—who are what I would describe as ‘pickup truck builders,’ who literally operate out of a pickup truck and tackle jobs such as laneway construction without a lot of experience or up-front planning. Smallworks, though, specializes in small home and laneway home construction, and the way we differentiate ourselves is to build quality homes that add value for families.”

The company’s website showcases dozens of laneway homes, ranging from traditional and contemporary to cottage and west coast plans, all tied to a philosophy of creating a ‘laneway culture,’ as well as design concepts that promote privacy, light optimization and flexible, adaptable plans.

“It’s not the fact that it’s a small home,” says Fry, “but that it’s a well-designed home that happens to be smaller in size—but one that still gives you all of the assets to make it a comfortable living area.”

It’s a plan many Ontario builders may want to emulate if the path to laneway housing can be properly paved.

Special Thanks to Mark Wessell & OHB

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