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A Vancouver laneway house under construction on Knight St. in Vancouver October 29, 2010.John Lehmann/The Globe and Mail

Allan Bernardo's new house in south Vancouver cost him a little more than he had originally thought. Somewhere over $200,000.

But the laneway house that he had built behind his parents' home was still a bargain compared to any condo he could have bought in the city: The cheapest, older condos listed these days start at $204,000. The laneway option was also half the price of the smallest house available in Vancouver and well below the $681,000 average.

Instead he got a new place built to high-level green standards, with top-quality, durable materials. And he doesn't have to leave the city.

"I could have done what my friends have done and moved to Surrey or Langley or Coquitlam. But I wanted to stay here," said Mr. Bernardo, 35, who works in the warehouse at London Drugs. "And this way, I don't have to worry about strata fees or maintenance."

Mr. Bernardo and his parents made a choice that is proving to be increasingly popular in the Lower Mainland, as high-altitude house prices and shifting lifestyles have combined with a push for urban densification from city planners. Cheering them on are the lower-carbon-footprint advocates.

At the head of that parade is Vancouver, which introduced a new policy a year ago that allows small houses to be built behind any single-family house in the city that has a lot wider than 33 feet as well as access to a lane or road.

So far, nearly 200 applications have come in - a number that has made Vancouver a North American leader in enthusiasm for this new form of housing.

Many other Lower Mainland municipalities are also on board, albeit with a few more restrictions and cautions than Vancouver.

For 10 years, Surrey has allowed coach houses in certain zones - its new-urbanist development of East Clayton, as well as south Newton, Douglas, Grandview - and the city has nearly 700 of them, which represents almost half the sites where they're permitted. "It's something that allows a young couple to meet bank requirements for a mortgage," said Surrey's head of planning, Jean Lamontagne.

The City of North Vancouver and Maple Ridge also permit laneway houses.

And others are joining in. Richmond is asking its residents in public consultations whether to allow what it calls coach houses or granny flats anywhere in the municipality. (In Richmond, coach houses are apartments above garages. Granny flats are one-storey standalone houses at the back of the lot.)

That's all part of Richmond's move to allow all kinds of new housing forms to flourish in what had once been a monoculture of large single-family homes, as people look for options for their aging parents or for adult children priced out of the housing market.

"This is a new choice and we're asking people if they would like it," says Terry Crowe, Richmond's manager of policy planning.

Coquitlam and West Vancouver, along with Victoria over on Vancouver Island, are also contemplating allowing laneway houses.

Where did the mania for these small, infill houses come from? Besides their appeal for the mortgage-overloaded and the extended families, there are political and environmental reasons.

"This was a low-risk, low-political-cost way of densifying without incurring the wrath of these wealthy homeowner groups," said Lance Berelowitz, an urban planner and author of Dream City: Vancouver and the Global Imagination.

Mr. Berelowitz points out that, as much as advocates champion laneway houses as solutions to affordable housing, they're not. Even if Vancouver builds 100 a year for 10 years, that will work out to an amount of housing that is no more than a few condo towers.

But they allow neighbourhood to keep the same look and feel. The Lower Mainland, outside of certain concentrated zones, is a relatively low-density area, even in much of the City of Vancouver proper. West-side neighbourhoods like Kerrisdale and southeast neighbourhoods like Killarney don't look that much different from Coquitlam or Langley.

"We think of Vancouver as an urban place but it's really suburban," said Jake Fry of Smallworks, the company that built Mr. Bernardo's laneway house. Mr. Fry has been a vocal champion of infill houses for almost a decade. "And this is a way to add some space without changing the look."

Laneway houses were common in many cities throughout history, frequently providing wealthy neighbourhoods with a stock of housing for their servants and resource towns with a way to accommodate rapid population booms.

But as cities standardized and regulated their residential zones throughout the 20th century, that kind of housing diminished temporarily.

It got a new lease on life starting in the 1970s. An American urban writer, Grady Clay, wrote a book in 1978 called Alleys: A Hidden Resource. The environmental movement and its urban-planning child, the smart-growth movement, also promoted the idea of using back lanes more intensively.

In 1995, the town of Langley, Wash., just north of Seattle, was the first to introduce a zoning code that specifically allowed laneway housing. Since then, the idea has been spreading. In some places, laneway houses are only allowed on a case-by-case basis. In other cities, they're only allowed in particular zones.

Vancouver has been the most aggressive, with a policy that permits them on almost all single-family lots and without the restrictions that others have put in. Unlike in the City of North Vancouver, laneway houses don't have to come with an owner living on the premises. Unlike North Van, Surrey or Richmond, homeowners don't have to choose between a basement suite or a laneway house - they can have both. Unlike Richmond's granny flats, which are restricted to one storey, Vancouver laneway houses can go to one-and-a-half storeys.

That all-out charge forward in Vancouver has produced backlash, though. At council meetings two weeks ago, when planners brought up an assessment of the program so far and suggestions for minor tweaks, 35 people showed up and about half were adamantly opposed, saying the new houses are so big that they're invading neighbours' privacy and blocking views.

One block on West 11th generated particular outrage because five laneway houses are going in at once.

City planner Brent Toderian, while generally an enthusiast, notes that "we're getting some pretty big units on the larger lots."

Councillor Raymond Louie said he plans to ask staff Thursday to find out if there's a way to make three changes: reducing the heavy city costs by not requiring a new sewer line; only allowing single-storey houses outright and making anything higher subject to approval; and limiting the number of laneway houses per block.

But he said laneway houses are not something his council is likely to back away from, with the public saying, at a rate of two-to-one in favour, how much they like the new housing form.

"There's a lot of support out there," Mr. Louie said.

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