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If you don't fancy moving into a condominium apartment, there is probably a small old house in your future. It could be a bungalow suitable for a couple starting a family. Or, if you're at the other end of life, you could be looking at a retirement cottage. Toronto abounds in such compact dwellings. For people who can afford to live in high-priced Hogtown at all, finding an affordable one should not be a large problem.

What can be a problem for people of any age, however, is living with the architectural tastes and values of yesteryear.

Unless they have been recently renovated, elderly little houses in Toronto tend to be diced up into too many rooms. That's because decorum decreed, from the Victorian era into the 1960s, that each new house be furnished with a living room structurally distinct from the dining room, and that both rooms be sharply distinguished from the kitchen.

Another downside of older housing: Windows in the sturdy brick walls are often small and sparse. They were designed that way to save on energy costs, but also to express visually the modesty of the inhabitants and the tight-knit character of the nuclear family within.

The frequent result of these environmental and cultural moves is an ill-lit, poorly ventilated interior that's hardly appropriate for the active, two-income, work-at-home lifestyles that numerous contemporary Torontonians enjoy.

So you renovate. At its least creative, the overhaul of old Toronto residences is merely a matter of root-and-branch gutting, followed by a splashing of white paint over everything that's left standing. The plainest house in this city merits more respectful treatment.

Last week, I visited a house that got the treatment it needed and deserved. The Toronto firm of Levitt Goodman Architects has taken the opportunity offered by a much-needed renovation to transform this very ordinary, small, dark old home into a light-filled, open place of work and rest for a professional couple and their young son.

The house is located in the relatively down-market north end of Toronto's generally tony Annex neighbourhood. As it happened, Levitt Goodman's clients – she's an architectural historian, he's a software designer – wanted the dowdy exterior of the building to remain as it had been when it went up. Even the stingy windows (which I so dislike in Toronto houses) were acceptable to the family. (The couple told the architects they didn't want to live in a glass box.) The only external hints of the thorough interior intervention is a colourful little metal plate spelling out the numbers of the street address, and, around back, a new steel-clad sleeping nook popped out of the rear façade.

Inside the front door, however, artistry comes fully into play. Project architect Megan Cassidy and Janna Levitt, the partner in charge, have made over the ground level into a smooth spatial flow from the dining area at the front, through the kitchen, to the family room at the rear.

An open plan, of course, is not unusual in a modern renovation. What makes this one notable is, first of all, the emphatic kitchen area in the middle. This is clearly the heart of the house, and the architects have underscored its importance with a striking linear lighting device hung over the massive food-preparation island.

Then there's the natural radiance that washes down on the kitchen from a skylight high above the second floor. If the centre of a traditional Toronto house is usually gloomy during the day, this one was changed into a cheerful spot by the soft sunshine descending through a slot in the floor of the second level.

Upstairs, the long horizontal skylight that brightens the kitchen below illuminates a kind of high-ceilinged bridge between the couple's bedroom at the front of the house and their son's bedroom and a tiny home office for the software engineer at the back. But this bridge is no empty corridor. It serves, instead, as the office and library of the historian in the family.

I cannot imagine a more pleasant, generous place for a scholar to work. The ample natural lighting is surely part of the good impression made by this space. But I also liked the simple, attractively edgy artificial lighting arrangement devised by Levitt Goodman to hang over the stairwell: a happy tangle of red wires, each ending in a big, old-fashioned transparent incandescent bulb. This rococo-modernist fixture is a welcome moment of excitement and counterpoint in an otherwise calmly sculpted interior.

In this project, Levitt Goodman has shown what lively architectural imagination can do for even the most humble Toronto house.

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