“It made a lot of sense.” said the 69-year-old Calgary resident. “Tear down the old garage, build a single-family home for about the cost of a very nice condo, and we don’t have to pay the condo fees. We don’t have a homeowners association except for (an) old dad here.”
Laneway homes have been touted as an answer to constructing livable spaces in tighter cities, with various levels of presidency lately offering incentives to encourage gentle densification – increasing housing supply and creating room for rental income.
Another use case has also emerged as more older homeowners look for tactics to age of their neighborhood while sharing space with their adult children without having to share a roof. “The idea of staying where they’ve lived and loved for so long is a really important factor (for the older generation),” said Andrew Fishman, owner of Toronto-based boutique construction company Laneway Home Builders. “We’re seeing a big increase in people wanting to stay where they were.”
Fishman, who has been constructing alley and garden suites for five years, said it also offers many young Canadians who’ve been priced out of the market a probability at homeownership.
How do you construct a single-family home?
Other cities and municipalities corresponding to Toronto and Vancouver have offered incentives and bylaw changes to push for more housing with multiplexes and townhouses to extend housing supply. Fishman said he has fielded calls from construction firms and homeowners as distant as Edmonton, inquiring about projects and processes.
It starts with a feasibility test, he said. This means you might want to discover whether the property meets all local requirements corresponding to zoning and emergency safety, and whether there’s a hearth hydrant nearby. “Before you get all excited and jump into design, you need to know what you can do (with the space),” Fishman said.
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Then move on to on-site logistics: whether there are trees and power lines or poles that would impact your city planning application. It can also be necessary to know the space wherein you will likely be working and the necessity for sewage, drainage, electricity and gas installations.
“Once you have reviewed the site conditions, the next step is to begin the design process,” Fishman said. For Blanchard, it took almost a 12 months and a number of other redesigns to provide you with a design that fit the City of Calgary’s bylaws and his 30-foot-wide backyard.
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There wasn’t enough space to construct a two-bedroom apartment in keeping with city guidelines, so Blanchard decided to tear down his two-door garage to make room for a automobile and a small workshop for him. This created space for a bigger unit: a front room with stairs to the master bathroom, kitchen and two bedrooms. And the town’s incentive program began on time for construction, which could lead to savings of greater than $20,000.
Blanchard, who worked with an area company, said a 1,500-square-foot home with a garage and workshop cost about $330,000 and will likely be ready for occupancy early next month.
Construction costs may vary depending on the town. For example, a variety of $350 to $450 per square foot is a start line for such homes in Toronto ranging in size from 645 square feet to 1,300 square feet, while city permits and development fees could increase the bill, Fishman said. For Blanchard’s Calgary home, the whole process, from approval to move-in ready, cost about $230 per square foot.
Lessons from Vancouver’s alley houses
Vancouver became the primary city in Canada to permit townhouses in 2009, so newcomers may have the ability to learn from their example.
Laneway homes are only unfamiliar at first, said Bryn Davidson, co-founder of Vancouver-based Lanefab, which has been constructing infill homes for nearly twenty years. “For the first year or two there’s a lot of fear and anxiety. But after a few years these things become really normal and people don’t even notice them anymore.”
In Vancouver, this system has also improved over time, he said. For example, in 2023, the town increased its size limit for single-family homes, allowing as much as 2,000-square-foot, three-bedroom, two-bathroom units for families with children. Previously, the town had an area of 1,000 square feet. “In the past, (the city) had very strict design guidelines that limited the size of the upper floor because they were concerned about how big these things looked and what impact the shadowing would have on the adjacent neighbors,” Davidson said.
The paperwork can be difficult at first. “Appraisal issues, financing issues, insurance issues, tax issues,” Davidson said. “Every time (single-family homes) come into a new community, everyone in that community, with all their different responsibilities, has to figure out how it works.”
Rental income via resale
Hamilton, Ontario-based real estate investor Katerina Wagner and her husband saw potential in single-family homes at a time when the town wasn’t offering incentives. In 2022, they began adding residential units to 3 of their properties, hoping to convert them into rental income or sell them for extra money. But as they began to refinance or sell the properties, the couple realized that these additional properties on the property weren’t adding as much to the house’s overall value.
