Laneway houses may be key to solving Vancouver's affordability crisis

Post by Michael Geller in


Controversial laneway houses are popping up all over Vancouver these days

On October 1, Heritage Vancouver organized another Laneway Housing Tour to allow participants to see a new flock of laneway housing around Vancouver. Six houses were on display, however two 'beautifully crafted lane and coach houses' by Lanecraft were not finished. While this allowed visitors to examine how these little houses are built, they could not fully appreciate how the new houses will relate to the existing older house on the lot, or other houses and garages along the street.


That being said, the other houses were most interesting and allowed visitors to appreciate what works, and what doesn't work when it comes to the city's laneway housing program.

As a general comment, I believe that laneway houses can be designed to fit into a neighbourhood, provided the narrower (33') lots have a minimum 120 foot depth. There is no doubt that it is easier to create a successful laneway unit on a corner lot, or lots that are 50 feet or wider.

However, what the tour did not offer was a chance to see single level 'cottage-style' laneway houses, which is what I believe many potential homeowners want to build, and what many neighbours would be happier to have in their neighbourhood.

laneway3.jpg Regular readers of this blog will be aware that this is the type of housing I would like to build, especially using pre-fabricated modular housing. Unfortunately, such units are likely to protrude further into the rear yard of 33' lots; however they could be built on lots 130' in depth or more.

The following are some images of what I saw travelling around the city. In many instances, the exterior design of the new houses relates well to the existing homes. However, in many instances, the houses do seem to 'feel' too large, especially when the garage is integrated into the new house.lanewayhouse4.jpg

This is generally done because the zoning regulations require that the second floor cannot be more than 60% of the ground floor including garage.

laneway5.jpg This is what makes the units 'one and a half' rather than 'two storey' in height. However, from looking at these photos, I would say that most people would describe many of these houses as two storeys.

As I noted when I last wrote about laneway housing, it is obvious to me that many homes are being designed so that the garages can become living space in the future. Well this might seem clever, I fear that it could compromise the success of the program as residents are required to park on the street, rather than in a garage. (As many readers may recall, while I urged Vancouver City Council to require a second parking space for lots with laneway houses, this idea was rejected. As a result, some lots could have three units...a main house, a basement suite, and a laneway house, with no 'off-street parking'.


Secondly, I found that some of the interior plans are much more successful than others. As I discovered on the first tour, some of these 500 square foot units have gigantic refrigerators and stoves when smaller, more compact appliances are available and might be more appropriate. To my mind, the more successful units offer one large living/dining/kitchen areas, rather than two smaller areas.

Some of the houses on the tour had the living area at grade and the bedroom(s) above; others havebedroom(s) at grade, and the living areas on the upper floor with an outdoor space over the garage. Both seem to work for the younger renter; however, neither is really suitable for an 85 year old granny who might want to live in this type of unit on a property owned by a family member.

laneway7.jpg I hope this is helpful to those of you who are interested in building a laneway house. I am pleased to announce that Laneway Cottages Inc., which I created two years ago to build laneway housing in Vancouver will soon start designing and building houses in the city, working with an established modular housing company, and Trasolini Chetner, an established westside builder, who is also building my Hollyburn Mews project in West Vancouver.

One advantage of modular building is that it can be completed in weeks, rather than months.... Contact me for more details at

Editor's Note: Here are few other posts we've written in the past on laneway housing & related issues:

 - Post by Michael Geller. Michael is a Vancouver architect, planner, real estate consultant and property developer. From 1972 to 1981 he was an official with CMHC during which time he oversaw the development of thousands of affordable housing units and the preparation of numerous housing policy and strategy documents. You can visit his blog by clicking here.


Just a thought for affordability that we can take from hong kong. After all the homes have houses in their back yards, we can put tin shacks up on top of any flat building in town. Then when that's all done we can fill English Bay with stilt housing. Then move out to Spanish Banks. Just a thought.

Great idea, but what's the rent for one of these? Far beyond what would be deemed affordable I suspect.

Any prescriptions to resolve crisis-level affordability issues during an historic bubble that include more overpriced housing for sale or rent are no solutions at all. The biggest problem is mostly outside of anyone's control - unless the Banks decide that they want to move interest rates back up to their typical range. That will certainly burst the bubble, but it will also expose the debt crisis and the clay feet of an economy masquerading as healthy. It's a house of cards.

These things cost >$250k to build. For ~500 sq ft. How does that fit with "affordable housing"?

I agree with foo and (apocolypse cometh...), Boohoo.

Laneway houses seem to be more about those who won the property lottery trying leverage their gains.
The whole process relies on someone borrowing $250,000 against what may already be an overlevered and, arguably, overvalued property.

Does bulldozing a $1.5 million bungalow and then spending another $1mil to build a house and a laneway house really translate into "affordable"?

Call it hyperbole, but this idea that the wealthy 'landowner', rents out the back of his land to those who cannot afford sounds borderline "Feudal"!

If the property bubble deflates, those levered up with homeowner lines to build laneway houses may be the first ones struck by lightning. Then what? Start bailing them out in the name of affordable housing?

Future headline. "Struggling family being evicted from laneway house because owner property is in foreclosure"!

We grew up on a 75X130 ft lot in South Vancouver. I must have been way ahead of my time because I envisioned a laneway house at the back of the property from about age 5 onward. Only thing was, my objective was a glorified play house.

Adding a $250,000 structure to create housing... how on earth is $250,000 considered affordable?

Anyone who is still wondering whether Vancouver, and much of Canada, is in a real estate bubble that must inevitably correct needs to take a look at what Australia is experiencing right now. There will be a correction in the most inflated areas of between 25% and 40% before this cycle bottoms. Ironically, it still won't be "affordable" by conventional metrics - but Vancouver never really has been.

Any Vision politician that promises Vancouver will ever be affordable again is simply lying through their teeth. It would takes billions of dollars of tax payer subsidies to make this happen. Government is broke so don't count on it.

New reality - If you want affordable, move to Mission. If you want downtown living, get ready to pay for it in Vancouver.

It could be worse - they could qualify for a STIR exemption and then the tax payer would also be on the hook.

The LWH feels more like an upgraded basement suite to me which in the past was a form of “affordable/student” housing. However, given the cost of construction, I would expect rents to be around $1,000-1,100 a month to coverage a conservative mortgage on the LWH (assuming banks approach them the same way they do investor owned condos). Not sure I consider that affordable.

This seems more like a commercial for Gellers Laneway Cottages Inc.At over $500 a square foot no wonder this is the kind of housing he wants to see.

no need to knock Michael personally on this.

Knock Bob Rennie. He'll tell you that the reason you should build it for $500/sq ft is because it will be worth $2,000 a sqft next year!!!!!!

I agree. This seems like something a paid tout would write because it is so disconnected from the myriad important considerations that don't benefit builders and owners. And the idea that it helps resolve "affordability" or is green is absurd.

I live in an area (between Main & Cambie) where LWH's have been going in steadily for the last two years. There is far more traffic and general congestion now, and many of the neighbors have said that the general quality of life has been noticeably diminished. I agree; and that's in the areas where construction is complete. In the numerous areas where it is still in progress, all one can do is try their best to avoid them.

Several long-time homeowners in our vicinity have already begun to protest. This story is far from over...

You're right Paul, laneway housing is not affordable. If one does the math a $225k 25 yr. mortgage @ 5% (assumes a 25% down payment) = +/-$1750 a month payments + $100 taxes + $100 insurance, expenses, etc. =$1950 / month break even. That's not affordable for a 600 sf 1 bedroom in a back lane often away from transit with no amenities. A smaller 450-500 sf bachelor/shoehorn 1 bed would have monthly payments of +/-$1600 / month.

Most people doing infills would be financing 100% so their monthly costs are even higher.

Laneway housing has some advantages for some people, but I suspect it is not for everyone. And, as Michael points out there are some significant design/good neighbour problems which need to be fixed if this housing type is going to be the 'gentle densificator' it might be.

Grandma could live in a pretty nice private pay Assisted Living facility for $1,900 rent if you just compare the actual housing costs.

Are these properties going to become white elephants when the time comes to sell them? You can't really call them mortgage helpers.

Have any of you checked out the density of London, Paris or Rome lately? These are all cities we dream of in our spare time. Nobody is saying that lowering their density would somehow make them better cities.

If people don't live in these laneway houses the reality is they will live in the valley and drive to work. How enviro-friendly is that? How affordable is that? NOT

If a 2000 sq.ft house costs $1000000 then thats $500 a foot,but dont forget that includes the cost of the lot.When you build a LWH you already own the lot.Seems like a goldmine for some.

one of the reasons the sq.ft cost is so high is because you still need all the same expensive items like a bathroom, furnace, hot water tank, kitchen, stairs, electrical panel etc. whether the house is 500 feet of 2,000 feet. Kaching.

Julia most houses have at least two bathrooms their kitchen is much bigger and they have at least three bedrooms,you need more doors and windows and a much larger roof.But a house also has an eight foot basement that has to be excavated and the extra material has to be hauled away where as a LWH is slab on grade so the cost of the foundation is much lower.And this still doesnt address the cost of the lot.And I would think that a house would also require a higher grade finish.

the bathroom or kitchen might be bigger but it still requires the same plumbing and venting. Kitchens usually have 1 sink, 1 stove, 1 fridge, 1 disposal regardless of how big it is.

The level of finishing on these LWH appears to be pretty deluxe. Is this a city requirement?

I am still a fan of the basement suite or inlaw suite all under 1 roof. Far more cost effective.

Julia Im not against these things or basement suites.But it appears that the price per foot in no way reflects the cost of materials and labor.I would be interested to know what the city charges for permits and increase in taxes and such.

I just picked this out of the blue,no pun intended,but even this seems high to me.But to be honest I have not built a house since the early nineties.

You may be correct about that. There's a new house at the end of our block. The owner tore down his smaller home (purchased for less than a million a few years ago) and built a new huge home with a 3 bedroom basement suite as well as a laneway house.

He originally tried to sell it for about $5 million while it was being built, but no takers. After living about a year in the house he now has it listed for $5,688,000. The listing advertises the basement suite (rented for $2750 per month) and the laneway house (rented for $1750) as mortgage helpers.

But my question is: would anyone who has $5.6 million to pay for a house want to become a landlord?

That's so bang on. The only people spending money on laneway houses are ones that seem to actually need money.

1) People who pay the over inflated developer price and convince themselves that the laneway house income will make it worth it, stretching themselves in the process.

2) Speculators who own and are leveraging themselves to build a laneway house to increase the value of a property.

$2,750 for a basement suite. OMG! Isn't that where newlyweds and poor students are supposed to live?

What rubs me wrong even more... aren't these revenue properties rather than residences and why are they not taxed accordingly. In the same way, why are rental apartment buildings not taxed to the owner at the same rate as the little mom and pop situation directly across the alley?

Something is not right in this whole scenario.

I am one of the people who would like to build a laneway house (sadly my block has no lane, so this may not even be possible). I would actually live in this house and renovate the larger house for any of my kids that would like to live so close. Does not help with the business issue of attracting people to Vancouver, but the fact is this is not as important as it once was as we now hire the best people possible and let them live where they choose (assuming broadband Internet and proximity of an airport). There are a lot of macro factors that get in the way of a solution but I think greater density and in-fill housing will be part of the solution no matter who wins the election.

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