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100 bpNichol Lane in Toronto is an example of a laneway house, something Toronto laneway advocates are pushing the city to adopt guidelines on for what is permitted.

The Globe and Mail

Highlights on a home buyer's checklist:

Upgraded kitchen? Check.

Finished basement? Check.

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Car port or driveway? Check.

Extra laneway home built in the back? Increasingly that will earn a check, too.

100 bpNichol Lane in Toronto is an example of a laneway house, something Toronto laneway advocates are pushing the city to adopt guidelines on for what is permitted. The Globe and Mail The Globe and Mail

100 bpNichol Lane in Toronto is an example of a laneway house, something Toronto laneway advocates are pushing the city to adopt guidelines on for what is permitted. (The Globe and Mail)

Laneway homes, whether built to rent or as a home for elderly parents or adult children, are still a niche phenomenon. They have taken hold in Vancouver, with hundreds built since the city started introducing permits in 2009, and Ottawa has more recently followed suit. The next major test is Toronto, where advocates are still pushing the city to adopt guidelines for what is permitted.

The argument for laneway homes is an obvious one.

"We need more housing, more rental housing, more affordable places to live, and this is one of the solutions for that problem," says Andrew Sorbara, a co-founder of Lanescape, a small group of developers and architects trying to get Toronto city hall up to speed. Lanescape plans to report its recommendations to Toronto councillors at the end of May.

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However, because of their uniqueness, with the architectural problem-solving and design flair that typically go into laneway homes, the houses can be expensive for renters and, especially in Toronto, ultra-rare and pricey for buyers.

Titles for laneway homes can be exceedingly difficult to separate legally and financially from the main residential property, and water and electricity typically come from the same lines as the main house. So, laneway homes are usually kept as part of the same title, like basement apartments.

"The reality is that there is no positive framework in place to address that kind of planning application [to sever the property]. You enter into a kind of black hole that can take forever," says Mr. Sorbara, "and there's just total uncertainty surrounding what you can and cannot do, and how long it will take [to get the permits]."

Because of their uniqueness, with the architectural problem-solving and design flair that typically go into laneway homes, such as 100 bpNichol Lane in Toronto, the houses can be expensive for renters and, especially in Toronto, ultra-rare and pricey for buyers. The Globe and Mail The Globe and Mail

Because of their uniqueness, with the architectural problem-solving and design flair that typically go into laneway homes, such as 100 bpNichol Lane in Toronto, the houses can be expensive for renters and, especially in Toronto, ultra-rare and pricey for buyers. (The Globe and Mail)

So, the most likely outcome is that laneway houses will continue to be treated more as rental units.

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"The goal is really to get as many of these laneway suites built as possible. If we don't put a straightforward planning-approval process in place, none of this is going to be built in reality," Mr. Sorbara says.

For home buyers, though, this means that the price will be more expensive over all, since buyers will be effectively purchasing two homes: the main house and the one at the back. Rent from the laneway home will, of course, help offset that purchase price.

And "multiunit homes have great resale value," says Lesli Gaynor, a realtor at Royal Lepage in Toronto, noting that laneway homes sometimes have quirky features appealing to buyers less interested in standard aesthetics and more in a home's uniqueness.

Amenities such as a clothes washer and dryer might, for instance, be in the main house. "Lots of architects are talking about the simplicity of laneway housing, because you can actually use some pretty innovative designs," she says.

There are some critics of this type of housing. A common counterargument from municipalities is that more laneway homes will clog back alleys, blocking vehicles like firetrucks.

Laneway homes, such as 100 bpNichol Lane in Toronto, have taken hold in Vancouver, with hundreds built since the city started introducing permits in 2009, and Ottawa has more recently followed suit. The Globe and Mail The Globe and Mail

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Laneway homes, such as 100 bpNichol Lane in Toronto, have taken hold in Vancouver, with hundreds built since the city started introducing permits in 2009, and Ottawa has more recently followed suit. (The Globe and Mail)

But Andy Thomson, an architect in Toronto who has worked on building second homes on existing lots, says smaller fire vans can be a solution to that problem, which needs to be weighed against the future of residential neighbourhoods.

He added that a main attraction is the diversity of laneway home designs.

"You're not going to have one developer go in and do 60 or 100 units. They're all going to be unique, niche, artisanal, you could almost call it craft solutions to very local problems," Mr. Thomson says. "I think it's a great thing for Toronto because we're starting to suffer from the conformity and monotony of the condominium-tower aesthetic."

Laneway houses that are severed from the main property come on the market rarely in Toronto, usually less than a handful a year. Some are renovated coach houses, which also can involve restoring original detail.

And the niche character can come with a high price tag.

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"Most of them are actually in the luxury price range, the architect-commissioned laneway ones. The ones that have been around in the last five to seven years, many of them have been over $1-million," says Anne Lok, a Toronto realtor at Blue Elephant Realty Inc. and a former architect.

"There's a perception from entry-level buyers that they are more affordable, because they tend to be smaller. Some of them are mini-homes, but they come at a price, because of their uniqueness," she says.

"Personally, I don't think it's a solution to housing affordability. … It will provide more housing if the owners decide to rent out the suites. But it's such a small percentage compared to the demand," she added.

For Toronto realtor Kimmé Myles, at Royal LePage's Johnston and Daniel Division, it's also a distinct market. "With the ones I've sold, the buyers have been creative types who understand that they're not getting a traditional house. It's a different mindset." She recently sold a renovated carriage house near the University of Toronto for $885,000.

She speculated that as more laneway homes are created and grow in popularity, "I think it would be a little bit easier to sever a laneway home from the main home." But for now, laneway homes in Toronto are still scarce to purchase separately.

"In the whole city, three or four a year is about it. We're hoping that changes. Like in Vancouver, they've eased up on the restrictions," she says. "It could add inventory to the severely depleted state that we're in right now."

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