Focusing on unique, detached, homes that feature a Laneway home...Carriage & Coach homes.

Laneway Homes

City of Vancouver has permitted laneway housing in all single-family neighbourhoods(RS zoning). A number of residents are adding laneway homes to their existing property, while others have decided to build them alongside their new construction. On average, 11 laneway house permits were issued per month during the first 100 laneway homes built in Vancouver, according to a study done by the city. City of Vancouver has currently permitted 3,237 Laneway homes and there are 2,527 that are lived in, as of September, 2019. Almost every Municiplality is now ammending their zoning bylaws to allow further Laneway homes, Carridge Houses, and Coach homes. Very soon we hopefully will see Tiny homes as well! If you have a lot that is big enough, explore your options!

What is a Laneway House?

A Laneway house is a small dwelling built at the back lane of a residential lot. Laneway houses cannot be strata titled and they are permitted in Vancouver lots with designations. The primary uses for laneway houses are either as a rental property or for family use.

2. What is my income opportunity?

Laneway housing is an excellent opportunity for a home owner to create additional rental income. If the construction is financed with a loan on your primary residence and rent out the Laneway house, you can qualify for tax deduction on the mortgage interest from your loan.

Depending on the size and make up of your laneway house a small one bedroom unit around 500 sq ft may be rented out at $2,000 – $2,500, and a larger 2 bedroom unit around 750 sq ft may fetch $3,000 or more.

3. Will a laneway house increase the value of my home?

Your laneway house benefits you by generating good rental income which makes your home more desirable to home buyers. Naturally, it will add value to your home and make it more valuable. Besides the rental income that you received, when your re-sale your home, the interest of other buyers for your property will be much greater than homes without a laneway house.

4. What is the benefit of having a laneway house?

When your laneway house is financed by a loan, you are able to deduct the interest on your loan if your unit is rented out. But, you have to report your rental income is you are claiming interest deduction on your loan.  You will not enjoy this benefit, if your laneway home is occupied by your family member(s) when no rent is payable to you.

Most home owners use the extra rental income to accelerate paying down their mortgage, pay tuition fees for their college kids, invest the extra money for retirement, improve cash-flow to enjoy a better lifestyle, travel, etc.!

Your investment in a laneway house will also benefit you over the long term when you sell your home. You can expect to get a higher price for your home as buyers are willing to pay more for your home than another home without a laneway house.

5. If I get a loan to finance my laneway house, what will be my net income after deducting my expenses?

Generally, rental income from laneway housing produces a net positive cash-flow to a home owner. Below are 2 scenarios, one for a 500 sq ft laneway house, and the other a 750 sq ft laneway house:

644 sq ft laneway house:

* A lot with 33′ x 122′ is eligible to build a laneway home of 644 sq ft, say at $180,000.
* Mortgage financing at 80% is $144,000.
* At a mortgage interest rate of 2.34%, 25 yr. amortization the monthly P&I mortgage payment is $633.66 (interest cost is $280.80 a month)
* Monthly rental income is $1,300 to $1,600

760 sq ft laneway house:

* With 38′ x 125′ lot at a buildable ratio of 0.16, the laneway house that can be built is 760 sq ft
* Cost of laneway home is $215,000, and if financing is 80%, the loan amount is $172,000.
* At 2.34% interest rate, 25 yr. amortization the monthly P&I mortgage payment is $756.87 (interest cost is $335.40 a month)
* Monthly rental income is over $1,800

You will find that you can enjoy a healthy net income after mortgage payment. There are other costs besides one time design and construction, the increase in property tax will be small relative to the income from rent.

6. What are my financing options?

There are Canadian banks and credit unions that are willing to lend to homeowners who are planning to build their laneway houses. For example, Vancity Credit Union- has developed a mortgage financing package called “Laneway Housing Bundle” specifically for this purpose.

7. Will adding a laneway house to my property increase my property taxes?

Yes, when you are adding a laneway house, you are making improvements to your property.  It will increase the value of your house, and your property tax bill will increase as a result. You can contact the City to find out how much more tax you will be paying when you add a laneway house to it.

8. Can I find a new home builder to construct my laneway house?

It is not as simple a process to find any new home builder to build the laneway house for you. It is a complicated undertaking, and there could be expensive delays and mistakes for those who are inexperienced to do the job.

You need an experienced building contractor who has a team that has years of experience in housing construction and project management. The general contractor will take care of the entire process including design, building permits, construction, project management, etc.

Cost over-run is the biggest problem faced by many home owners who use someone who is not experienced in laneway house construction. Many home builders are not familiar with the regulations, while others may not have built any laneway house before.

9. What is the cost to build a laneway house?

This depends on many variables; as the construction cost is directly linked to the size of your laneway house. You can budget for:

Site-specific costs:

City fees for permit, sewer and water upgrades, demolition, new electrical service and landscaping ~$30,000 to $40,000.

Construction Cost:

Current quotes are from $300 to $350 per sq ft cost to construct a laneway house. When compared to a standard East Vancouver new house construction cost between $350 to $475 per sq ft, there are some savings a capable new home builder could deliver. Shopping for an experienced laneway house builder is important to build your house on a budget.

When new home builders and the city gained more experience dealing with laneway house construction, it may be possible to bring the cost down to much more affordable level.

10. Is there a warranty for my laneway house?

Yes. Every home constructed has a comprehensive warranty for your peace of mind. Some builders include 12 months of building maintenance after the home is completed and an occupation permit issues by the City.

We use new home builders who are licensed by the Home Protection Branch of B.C. and your new laneway house is covered by the 2-5-10 years National Home Warranty.

11. How do I get started?

Visit our Getting Started information or give us a call 778 251 8176 or info@paulbale.com

Regulations and Guidelines for Laneway House

Some of the key regulations for laneway housing issued by the City of Vancouver are:

Allowed in RS-1 and RS-5 single family zones
Can be located on lots 33 ft. wide and wider, with an open lane, on a double fronting street, or on a corner with a lane dedication
Generally located in the space where a garage would be permitted, i.e., in the rear 26 ft. of the lot (with a minimum of 16 ft. separation between the laneway house and the main house)
Rental or family use only: no strata-titling. 
Minimum of one on-site parking space must be provided
Maximum allowable unit size is based on lot size, to a maximum of 750 sq. ft. (A maximum unit size of approximately 500 sq. ft. is allowed on a 33 ft. x 122 ft. lot)
1 and 1½ storey configurations are possible, with guidelines to address upper storey massing, privacy and shadowing
Homeowners can add a laneway house while retaining their existing main house, with or without a secondary suite. A laneway house can also be built with a new house.

Detailed regulations and guidelines are available online to help prospective applicants determine whether their lots are eligible for the construction of laneway houses. 

Links to some key resources are below:

Regulations governing the Zoning and Development By-law.

Laneway housing guidelines focus on creating neighbourly relationships with adjacent properties, a positive landscape, and enhanced environmental performance of the entire site.

Development Services staff work with applicants to determine how design on a specific site can best

meet these guidelines.

https://bylaws.vancouver.ca/bulletin/bulletin-laneway-housing-guide.pdf

https://www.pinterest.ca/vanheritage/laneway-houses/

– this collection of photos shows the diversities and choices you have when building your laneway house. It is best to consult a home builder who is experienced in laneway housing for options on the design of a laneway house most suited for your lot… parking requirement, the size, finishing and inside furnishing to meet your budget.

Cash-flow and benefits from A laneway house

The financial incentive to build your laneway house is attractive. You can get superior rental income from your laneway house. The rental return from your laneway house far out weighs your cost to add a laneway house to the back of your house.

The low vacancy rate in Vancouver and preference by renters for new rental housing, makes adding a laneway house to your primary home a very attractive financial investment. From rental rates home owners are able to get for their laneway house, the rental income from their laneway houses produces net positive cash-flows to the home owners.  

Below are 2 scenarios, one for a 644 sq ft laneway house, and the other a 760 sq ft laneway house:

644 sq ft laneway house:

* A lot with 33′ x 122′ is eligible to build a laneway home of 644 sq ft, say at $225,000.
* Mortgage financing at 80% is $180,000.
* At a mortgage interest rate of 2.34%, 25 yr. amortization the monthly P&I mortgage payment is $792.08 (interest cost is $351.00 a month)
* Monthly rental income is $1,500 to $1,800

760 sq ft laneway house:

* With 38′ x 125′ lot at a buildable ratio of 0.16, the laneway house that can be built is 760 sq ft
* Cost of laneway home is $265,000, and if financing is 80%, the loan amount is $212,000.
* At 2.34% interest rate, 25 yr. amortization the monthly P&I mortgage payment is $932.89 (interest cost is $413.40 a month)
* Monthly rental income is over $1,800

You will find that you can enjoy a healthy net income after mortgage payment. The increase in property tax will be small relative to the rental income from renting out your laneway house.

*Some experienced contractors are confident that they can build more affordable laneway houses at between $250 to $375 a sq ft.

How-to-Guide: Laneway House

https://vancouver.ca/files/cov/laneway-housing-howto-guide.pdf

on Laneway House published by the City of Vancouver will help you understand how you can go about owing your own laneway house. Over 90% of the single-family homes in Vancouver are within the RS1 and RS5 zonings that allow laneway houses to be built.

The City of Vancouver’s map below shows the distribution of homes with the above zonings:

The first 100 laneway houses posted on the City of Vancouver website showed that about 60% of these houses were built west of Main Street. Just over 60% of these houses were built as total site redevelopment (a new laneway house and a new main house). Two-bedroom laneway houses accounted for 28% of the first 100 homes built, 67% are 1-bedroom units and 5% are studio units.

Fast forward to today, there is many hundreds of laneway houses that were built the past 10 years and more of them are expected to be built in the future. Laneway housing has been well received by Vancouver’s residents in general as it is a very sensible way to add ground-oriented dwellings in Vancouver’s neighborhoods.

The objections from home owners on laneway housing was parking problem and congestion created when too many cars are parked on the neighborhood roads and laneways. The objective of increasing the housing stock in Vancouver to provide more affordable housing didn’t turn out to fulfill as the goal was planned.

Rental cost for laneway housing that started in the $2,500-$3,500 range for a 1-bedroom laneway house just keep going up, and presently, the rental rates on the East side of Vancouver have far exceeded $2,700 plus a month for a laneway house.

https://vancouver.ca/files/cov/laneway-house-review-survey-summary.pdf

If you are a home owner interested to explore the option to add a stream of rental income, you are welcome to contact Paul Bale at info@paulbale.com

Vancouver Laneway House News & Articles

Since 2009, the adoption by the City of Vancouver allowing laneway homes

https://vancouver.ca/people-programs/laneway-houses-and-secondary-suites.aspx

 to be built at the back of a single-family lot within certain Vancouver zoning requirements, laneway housing took off and gained wide acceptance by the residents of Vancouver.

Below are some articles and news reports highlighting the progress of laneway housing in Vancouver over the past few years:

https://www.vancouverheritagefoundation.org/resources/vhf-archive/past-house-tour-resources/laneway-house-tour/

CTV News – September 18, 2016

https://biv.com/article/2016/05/teardown-laneway-house-densification-trend-east-va

Business Vancouver – May 17, 2016

I Live In A Vancouver Laneway House
Civemebackmyfivebucks.com – January 8, 2016

Laneway House Tour – 2015
October 24th, 2015

Laneway home dream turns into ‘absurd’ nightmare
CBC – April 8, 2015

Lessons from my laneway house
Homes & Design – March 4, 2015

Vancouver Laneway Homes: An Explainer
HuffPost British Columbia – Updated September 30, 2014

My laneway house
Homes & Design – February 11, 2014

Vancouver approves near-record number of permits for laneway houses in 2013
Straight.com – December 28th, 2013

Vancouver laneway housing: “gentle densification”
Cbc.ca – September 29, 2013

Laneway houses continue to soar in popularity in Vancouver

Vancouver Sun – December 29, 2013

Vancouver issues more than 1,000 laneway house permits

Metronews.ca – Sept 28, 2013

Vancouver laneway housing to be reviewed by council
CBC.ca – dated May 13, 2013

Vancouver architects cheer laneway boom
Globe and Mail – Mar. 25 2013

Are Vancouver laneway homes an affordable housing alternative?
Globe and Mail – Mar. 25 2013

The Laneway House: “Can we make intelligent changes and keep the integrity of single-family houses?”
Vancouver Magazine – September 2010

Vancouver’s Eco Density Program Produces an Explosion of Small Green Modern Design
treehugger.com – June 1, 2010

Local couple to put the test to Vancouver’s first laneway house
Vancouver Observer – March 8, 2011

“The little house that went to market”
Globe and Mail – Feb 5, 2010

A home owner who is planning to build a laneway house is strongly encouraged to obtain the advice from a Development Planner, prior to proceeding with their plan to build a laneway house.

A detailed How To Guide can be found through the link below: http://vancouver.ca/home-property-development/buildingyour-laneway-house.aspx.

A home owner may also talk to the local laneway house general contractors and builders who are more than happy to provide the guidance and advice on the process to have a laneway house built on his/her lot.

If you need to talk to a laneway house builder, you are welcome to contact Paul Bale 778 251 8176 or email info@paulbale.com

http://vancouver.ca/home-property-development/laneway-houses-and-secondary-suites.aspx

Vancouver Laneway houses

The approval by the City of Vancouver to implement the Laneway Housing Policy since 2009. Laneway houses in Vancouver play an important role in achieving Vancouver City Council’s priorities to increase the supply of rental housing options across Vancouver city. Laneway houses help to increase the diversity of rental units in single-family neighbourhoods,

Since 2009, homeowners have taken on the idea to build laneway houses on residential lots. Beside new home construction application, most of the building permit applications are now reported to be related to laneway houses.

This type of compact dwelling located at the back of a single-family lot has taken off and it is growing in popularity with homeowners in Vancouver East and West.

Most single-family dwellings in Vancouver are eligible for the construction of laneway houses at the back of the building lots

The common reasons for Vancouver laneway houses are due to their appeals to diverse groups of people:

Laneway housing offers an additional opportunity for the home owners to have additional living space for their own occupation or renting out the laneway house for extra income.
Laneway housing provides more opportunity for renters to live in detached and ground-oriented rental housing. Many renters favour living in the neighborhoods where they grew up and went to school.
It provides additional housing that preserves the existing streetscape and adds character, vibrancy, and security to the lane
Laneway houses in Vancouver provide housing for diverse groups of people, including seniors who like to downsize to live in customized living spaces more conducive for aging seniors who may have physical challenges.
Adult children may want to live independently and yet just steps away from their parents, and renters who want to live in detached housing

Laneway housing provides more opportunities for people to live in the city, close to their jobs, services, and in neighborhoods they like to live.

You are welcome to browse the resources on this website to learn more about Vancouver laneway houses.

If you have any questions regarding the possibilities of adding a Laneway home, or Coach house, to your infill portion of your property, contact Paul Bale at 778 251 8176.

Why Build a Laneway House?

Every owner has their own reason for wanting to build a laneway home, but most cite the need for alternative housing options. Here are the most common reasons:

Aging parents: A home in the backyard provides close proximity for parents who are fairly independent but still need some care. This could also be a space for caregivers.
Adult children: Instead of moving out entirely, a separate space on the same property provides growing children a cheaper alternative to renting their own place while going to school or starting their career.
Extra income: The laneway house can be rented out as an extra income earner.
Downsizing: Owners can move into their laneway house and rent out their main residence when downsizing.
Building community: Having a home face the back of the property adds liveliness to the back lane, as well as adding the option to plant greenery where there would otherwise be only a garage and concrete.
Being green: Adding more housing options on unused space increases housing density and adds an alternative form of rental housing for years to come. Laneway homes are part of Vancouver’s EcoDensity program and must comply with the new Green Homes Program.

Read more about the lot requirements and dimensions for building a laneway house.

What are the Requirements for Building a Laneway House?

Want to know if your lot is eligible for laneway housing? Here are a few criteria:

RS zoning, single-family zoning
Minimum 7.3m (24) foot wide lot
Must have access to an open lane, either directly or on a corner lot, or be located on a double fronting site served by a street on both the front and rear.
The lot must be deep enough for the laneway house to extend up to 7.9 metres (26 feet) from the rear property line AND have a minimum separation from the main house of 4.9 metres (16 feet), allowing for open backyard space.
There must be a fire access path along one of the side yards.
Exterior parking

How Big are Laneway Homes?

Laneway housing can be built in 1 and 1½ storey configurations. The maximum floor area can be determined by multiplying the lot area by 0.16.

On standard 33’ x 122’ lots, this allows a maximum of an approximately 644 square foot home.
On a 50’ x 122’ lot, this allows a maximum of approximately 900 square feet.

If you choose to build a 1 storey house it is limited to the same maximum height as a garage which ranges from 12ft flat and 15 ft sloped roof. Also they allow you to build 32 feet from the alley instead of 25feet which will give you a larger foot print.

There are many other options, and criteria, that will need further investigation, cost, specific lot dimensions, style, age of the house, house location on the property, and corner lot considerations. Who would you hire to construct, which company? If you have any questions about your specific property, or project, or you simply want to meet in person, and discuss your possibilities...Feel free- at no obligation, to email, or call me directly. Let's meet for a coffee, on me, of course, and let's make the right move!