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Not so long ago, a three-storey house tucked into a back lane south of Dundas Street West would have appealed to only the most forward-thinking.

“Everybody was scared of them,” says real estate agent Jose Nieves of the earliest houses that began to appear in the gaps in back alleys.

The surrounding Parkdale neighbourhood was a good place to buy crack cocaine when he bought his own loft in a converted industrial building on Federal Street.

“If you wanted a good-quality gun you came to our ’hood,” says Mr. Nieves, laughing. “Even my girlfriend didn’t want to move in.”

For the past 14 years, Mr. Nieves, with Sutton Group-Associates Realty Inc., has been a co-owner of Lula Lounge, which opened when the stretch of Dundas West between Ossington and Dufferin was an extremely sketchy part of town. “We were the pioneers.”

He and his family were also buying laneway houses around the city as investment properties when no one else wanted them.

Mr. Nieves points out that as more homeowners come and go in the laneways, people engaged in illegal activities move on. Entire neighbourhoods become safer and more desirable, he adds.

Now, he jokes, he has gained a cool factor because of where he lives. He sometimes holds events and turns his loft into gallery space in order to raise money for the arts.

Many architects and planners are proponents of laneway housing. They say it’s a clever way to increase density and reclaim rundown areas of the city. Toronto has never made it easy to get permits, they say – partly because of the question on how to get services to those areas. As a result, the city doesn’t have a large inventory of infill houses in hidden places.

25 Skey Lane, Toronto

Currently, Mr. Nieves has a house listed for sale at 25 Skey Lane, near Dundas and Dovercourt. The asking price is $874,000 and he was expecting a few bids to materialize by the deadline for submitting offers on Wednesday night.

As for the broader Toronto market, some agents report there’s a slight chill in the air: there have been nights in the past week or two with no bids. However, the typical summer slowdown didn’t occur this year, some point out, and buyers may be taking a breather. Also, more listings tend to come on in September compared with the summer months.

Mr. Nieves says the cool summer weather likely kept house hunters out visiting properties during those months. When temperatures finally climbed in September, people wanted to enjoy the sun, he figures. “We had summer a week or so ago.”

Laneway houses often sit a bit apart from the rest of the market, in their own niche.

Real estate agent Max Oliveira, also with Sutton Group-Associates Realty, recently developed a laneway project downtown. He recently listed the unit at 18 Egerton Lane with an asking price of $1.269-million. He received a conditional offer after three days and is still waiting for that deal to close.

Mr. Oliveira says he had to wade through a lengthy process to buy an existing house in front of the three new units, structure the whole project as a condominium, then have the city services extended from the existing house to the new units behind.

The owner at 25 Skey Lane, Lisa Ellenwood, says a steady stream of potential buyers had been through the property over the weekend. By Monday, a few had booked appointments to see the property a second time.

She says she and her husband decided to list the house for sale now because it shows so well in the fall. The quality of light is lovely at this time of year and large trees screen nearby buildings. “It’s this green privacy wall between us and the neighbours.”

Ms. Ellenwood says what she loves most is the quiet on Skey Lane because there’s no traffic. She walks less than five minutes along one laneway straight into Trinity Bellwoods Park. “I have a dog so right now I’m there twice a day. That park in the summer is so much fun,” she adds, citing the regular farmers’ market, frequent live music performances and artists’ festivals.

She says the lane has changed a lot in the time she’s been there. An artist who also teaches at Ontario College of Art and Design owns a warehouse on the lane and rents space to several tenants. Just to the north, construction is under way on lots that have been vacant for years. “Everyone chats and knows each other now,” she says. “Our dogs play together.”

She also enjoys the proximity to Enoteca Sociale on Dundas West and the Dakota Tavern on Ossington. “It’s a really laid-back place to have a beer. It’s not pretentious at all.”

Ms. Ellenwood imagines the house could appeal to a young couple with children. A family with a two-year-old lives a few houses down the lane. The Toronto West End College Street YMCA Centre is nearby and the area is known as a good school district. But she could also imagine a singleton or couple moving in to take advantage of the nightlife.

Some people can’t quite grasp the concept of living in a tucked-away location, she says. “I think there are a lot of people that don’t really understand it and don’t understand it’s way more quiet.” Her tall, narrow house has four floors of living space and a small urban-style yard with a patio.

Mr. Nieves took some older Portuguese clients to see the property on Skey Lane, which is in a pocket traditionally known as Little Portugal. “Obviously, they hated it.”

The people drawn to laneway houses tend to be young professionals between 30 and 45, he says.

Mr. Nieves says the houses in laneways come with some hassles. At a couple of his properties he can’t get mail – he has to have it routed to a different address. Canada Post doesn’t want to enter the lane in winter because there’s no snow removal and the City of Toronto doesn’t provide that service, he says.

But in many laneways the owners get out there and shovel their own snow and that’s how they get to know each other, he adds. “I guess when you live in a laneway you’re a different breed. You’re more courageous.”

Editor's note: 25 Skey Lane did not sell Wednesday and has been re-listed with a higher asking price of $925,000.

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