The ins and outs of laneway houses

Since the launch of Vancouver's laneway housing initiative in 2009, more than 400 dwellings of just 500 to 750 square feet each have been built or are nearing completion along lanes (alleys) in the British Columbia city. 

That's enough production to begin to reach some conclusions about how these small auxiliary houses are functioning and whether they make economic sense. The magazine BCBusiness this month did an excellent job of looking at the various ways in which laneway houses are developed and financed.

(Vancouver Planning Director Brent Toderian told New Urban Network that the magazine story was wrong in saying there have been "more than 200" dwellings" in the program. We initially reported the magazine's figure, but have since updated out story to the number that Toderian says is correct: more than 400.)

So far, there seem to be three prevailing development scenarios:

• The owners of the main house on the property build a small unit on the lane—usually, though not always, to generate rental income.

• A couple builds a small house for themselves behind the home of a family member. One example is Akua Schatz and Brendon Purdy, a couple in their thirties who built a 500 sq. ft., $280,000 laneway house. They acquired ownership of the lane house, while Purdy's parents retained possession of the land (as required by the laneway housing regulations).

• A developer constructs both the main house and the laneway house at the same time. This is how more than half of the laneway houses have come into being. "It''s cheaper to do two at the same time," says developer John Kyriazis. "It costs $15,000 to bring new sewers and gas to the lot's property line, whether it's one or two houses. Landscaping's cheaper. Construction's cheaper."

BCBusiness says a laneway house can be a good investment, but it depends in part on whether the costs come in as anticipated. The cost may be $500 per square foot, double what it would be for a standard house. Laneway houses in Vancouver, which has some of the highest housing prices in Canada, typically range from $225,000 to $350,000.

The city is now processing between 30 and 40 applications each month. Planning Director Brent Toderian describes the program as the largest backyard, laneway housing initiative in North America, and he expects it will eventually result in thousands of units—adding to neighborhood density without overwhelming the surroundings. 

The magazine points out:

Vancity has what it calls its Laneway Homebuyers’ Bundle, which is meant to encourage the development of lane homes. As the credit union sees it, these small backyard buildings will increase the amount of affordable housing in Vancouver without ghettoizing the elderly, or low-income workers or those who don’t like highrise living. They’ll also help keep families together, with aging parents and children choosing to live side by side.

For more in-depth coverage on this topic:

• See this November 2010 article from New Urban Network and this April 2009 article from New Urban News.

• Subscribe to New Urban News to read all of the articles (print+online) on implementation of greener, stronger, cities and towns.

• Get New Urbanism: Best Practices Guide, packed with more than 800 informative photos, plans, tables, and other illustrations, this book is the best single guide to implementing better cities and towns.

• See the July-August 2011 issue of New Urban News. Downtown makeover, agrarian urbanism, bike sharing, bike-ped issues, TIGER III livability grants, unlocking remnant land value, selling the neighborhood, Landscape Urbanism vs. New Urbanism, new urban resort, granny flats, The Great Reset. 

• See the June 2011 issue of New Urban News. Mid-rise living, elevated walkways, Jane Jacobs and observational urbanism, affordable transit-oriented development, the coming housing calamity, rental and TOD to dominate market, New Town in bankruptcy, regional approach for high-speed rail, the civic costs of sprawl, redevelopment of mall 

• See the April-May 2011 issue of New Urban News. Transit-oriented development, “Cycle tracks,” gentrification versus revitalization, HUD grants, economic silver linings, light rail development, pocket neighborhoods, close-in Maryland housing less expensive, transit outperforms green buildings, Charter Awards, shift to smaller stores