Do you delete your emails?

I mean, once you’ve responded to them, or if you find there’s no need for them anymore?

I don’t.  Never have.

I keep them all, and I while I sent a total of 21,992 emails in 2023, I can honestly tell you that I have access to all my sent/received emails dating back to 2004.

Is that weird?

I’m weird.  Right.  We established that a very long time ago.

A friend of mine who “works in computers,” for lack of a better description, once told me, “Don’t delete anything for the sake of space.  The Internet is infinite.  Space grows.  Megabytes turn into terabytes, and terabytes turn into petabytes.”

He’s not wrong.  I remember a university computer that had a 100 MB hard drive.  But once I started downloading MP3’s off Napster, at 3-5 MB per song, that computer ran out of space rather quickly.

In searching for a feature photo for today’s blog, I couldn’t find anything on my usual free photo websites, and I don’t steal copyrighted images from Google, so I decided to search my email archives.

2020.  That’s a tough year for a lot of people, I know, but guess what I found in an email from that year?

Today’s feature photo.

A reader sent me information on a laneway house that he had just finished, along with photos, and because I don’t delete any emails, it came in handy four years later!

That picture you saw at the top of today’s blog is a laneway house near Danforth & Greenwood that was finished in 2020.

The builder noted:

The unit has a 350 sq.ft. heated garage and 800 square feet of interior space with 1 bedroom, utility room, and shared entrance on the ground floor. It has a bedroom upstairs with a walk-in closet c/w stacked laundry, 3 piece washroom, and a large open concept Living / Dining / Kitchen with open stair to the lower level. We ran radiant in-floor heating through the entire slab, both to keep the garage warm, and to ensure that the floor of the unit above would be comfortable throughout the winter.

Of course, he also asked for credit if I ever used the pictures, so a shout out to Mikael at MHG Design Inc., whose company logo can be seen in the photo.

While we’re plugging people, how about our good friend, Marty Steele, a loyal reader and commenter here on Toronto Realty Blog, who is also behind Laneway Housing Advisors.

Marty was very early to the laneway party.  He started doing reports on laneway housing viability several years ago, and I smile when I see his reports in houses that I’m showing to buyers.

I am going to assume that folks like Mikael from MHG Design Inc. and Marty from Laneway Housing Advisors are proponents of laneway housing in Toronto, but would it surprise you to know that many Torontonians are steadfastly against the concept?

Probably not.  After all, if folks in Toronto can disagree about something, they likely will.

But why do people disagree on laneway housing?  And what issues are at the forefront of the discussions?

“An honest conversation,” is what I called this in today’s blog title, and that’s what I’m aiming for because I feel like the discussion about laneway housing in Toronto is merely getting started.

A client of mine remarked last weekend, “I have no problem if somebody else wants to build a laneway home on our street.  But I don’t think I’d take one if it were free.  I don’t want somebody living in my backyard with a window that looks out to where my kids play, and I don’t want to park my car under their living room.”

How’s that for a hot take?

Then on the other hand, many Torontonians believe that laneway housing and multi-unit dwellings are the future of the city and a key component in getting us out of the “housing crisis” that only seems to be getting worse.

Simply put: there are those who love laneway homes and those who coudln’t possibly care less about them.

Notice that I stopped short of saying “hate” when compared to those who love laneway homes, because it’s not that laneway home naysayers “hate” the idea, but rather they just don’t care about them.

So today, I want to discuss laneway housing and propose a few questions that need to honestly be asked and answered, even though some people don’t want to vote against “progress” or have their views be seen as elitist.

Keep in mind, that there are some people out there that don’t like peanut butter and jelly, so everything in life is going to have a critic…

Do your neighbours want you to build a laneway house?

Your answer might be, “I don’t care!”

And frankly speaking, you would have every right to feel that way.

It’s also your right to build a laneway house in the first place if your property meets the requisite requirements, so is it really anybody else’s business what you do with your property?

Unfortunately, that question isn’t rhetorical.  And as we all know, “nobody’s business” is often “everybody’s business.”

I’ve always been amazed by people who feel the need, or that it’s their right, to tell others what to do with their own homes.  My favourite example of this in Toronto might be when it comes to trees.

I would likely never be described as an “environmentalist,” so it should come as no surprise that I feel a home-owner should be allowed to do as they place with their own home when it comes to trees, and yet we live in a city where in order to cut down certain trees, you not only have to jump through hoops but you might not be allowed to do so at all.

I know, I know, we need trees for the good of the environment, and for beauty, and oxygen, and it’s a living, breathing thing!

But if a home owner – that is, somebody who owns that house, wants to cut down a tree to put in a swimming pool, then who the hell are the neighbours, the city, or some tree-hugger ten miles away to tell them otherwise?

Not going to be a popular take.

I know.  But I don’t care.

While I don’t want to live in a state down south where it’s considered normal to legally shoot a person simply for setting foot on your front lawn, I also don’t want to live in a place where property rights are consistently being stripped away.

Excuse the tree-related tangent, if you will, but it’s a necessary side to this coin.

If legislation exists that allows a property owner to build a laneway house on their lot, should the neighbours have any say in what that property owner does?

As you can imagine, many people in Toronto don’t like laneway houses and do not want their neighbours to build them.

There are many reasons, and I’m sure we could come up with a list.

Some don’t want renters living in people’s backyards.

Some don’t want the construction.

Others might not want to block out the view or the sun.

And others might just feel that laneway houses are too dense.

Last week, we were treated to this Capulet-versus-Montague dispute in the Toronto Star:

“Garden Suites Are Dividing Neighbours On This Tiny Toronto Street”
The Toronto Star
September 24th, 2024

From the article:

This is not the first article about neighbours disagreeing over value, effectiveness, or worthiness of laneway housing, and it certainly won’t be the last.

But it goes to show that not everybody is in favour of laneway housing, in case that wasn’t already taken as a given.  And it also goes to show that even after the City of Toronto enacts legislation to deal with laneway housing, they’re still going to be required to work with home owners (ie. constituents/voters) on an ongoing basis to deal with dissent.

The “yay” and “nay” camps for laneway housing will differ dramatically in different geographic areas and, dare I say, demographics.  But this should also come as no surprsie.

Is the cost of building a laneway house justified?

Well, I suppose that depends on how you want to justify the build.

If you believe in the greater good and that you’re helping to “solve the housing crisis,” then sure it does!

But is the cost justified financially?

There are two ways of looking at this:

1) How much rent are you collecting, compared to the cost to build the house?
2) How much value are you adding to your property, compared to the cost to build the house?

To answer the first question, I would draw a parallel to the show “Income Property” that was a big hit 10-15 years ago.  Every week, we would watch a happy-go-lucky couple tear their basement apart and build a turnkey apartment that they would then rent out.

But did the end justify the means?

If it costs $50,000 to renovate a basement suite, and the unit rents for $1,100 per month, then the payback period is just less than four years.

That’s how this television show conveyed the “value” in every 22-minute episode, and rather comically, the renovation always seemed to finish on time, under budget, and the landlords would magically find a tenant to pay more than what the host first estimated the unit would be worth.

With respect to a laneway house, would we use the same formula?

If so, you can see how the numbers would differ drastically.

If you spent $500,000 to build a laneway home, only to collect $2,400 per month in rent, the the payback period is over seventeen years!

Advocates of laneway houses are going to tell me why this metric is no longer appropriate and trust me when I say – I’m all ears.

Now, when it comes to the value add of the laneway house, here is where the proposition can be make-or-break.

If you own a detached, 3-bedroom, 2-bathroom home in Little Italy worth $1,500,000 and spend $500,000 to build a laneway home, is the property worth $2,000,000?

Is it worth more?

Theoretically, it should be.

Why would anybody spend $500,000 to build a laneway home if it wouldn’t add $500,000 or more to their property?

I suppose you could argue that even if it only added, say, $450,000 in value, then the additional rental income over the coming years could make up the difference.

But if you have to create an argument, then something is amiss, right?

The problem in Toronto is: we haven’t seen enough two-dwelling properties sell over the last few years to really understand the value proposition.  If we had a database of one-hundred properties that featured a traditional single-family dwelling and a newly-built laneway home, then surely we could work backwards from the sale price, the cost to build the laneway house, and the original purchase price to determine just how much “value” is created.

Unfortunately, we’re years away from that, and thus we’re years away from answering the question of whether or not the cost of building a laneway home is justified.

Is there a “cheap and cheerful” solution on the horizon?

Perhaps!

And thanks to Laneway Housing Advisors, as I’m still on their email subscription list, I learned about a $65,000 modular laneway home that made its debut at the recent Toronto Home Show:

That’s a 170 square foot “studio” model that was on display at the Toronto Home Show.

Unfortunately, the website for “BORDERLESS” doesn’t work.

Let’s hope the plumbing in their modular laneway homes does!

But BORDERLESS offers four models of homes:

$64,990 – 170 Square Foot, 0-Bed, 0-Bath Home Office

$64,990 – 170 Square Foot, 0-Bed, 1-Bath Studio

$129,990 – 340 Square Foot, 1-Bed, 1-Bath

$189,990 – 510 Square Foot, 2-Bed, 2-Bath

There’s limited information available and we know nothing about the features, finishes, ceiling height, etc.

But here’s the artist’s rendering for the 2-bed, 2-bath unit:

We also don’t know the length or width of that home, and thus whether or not it could be built off-site and craned into somebody’s backyard, to sit comfortably within the boundaries of an 18-foot lot.

But it’s an idea.

And it shows that people are thinking about the cost of laneway houses and how they could stand in the way of new units being built.

Are two-dwelling properties going to be as popular and as saleable as traditional, single-family homes?

I’ve seen exactly one property with a laneway house in Leaside over the years and it didn’t exactly fly off the shelves when it was listed for sale.

It was a builder spec-house and the decision to include a laneway home was a curious one.

Why?

Well, simply put, I don’t think the $4,000,000 Leaside buyer wants a laneway house.

In fact, I think this was a major detriment to the sale.

Call the folks in Leaside unimaginative, if you will.  But on a typical 30 x 130 foot lot, where you’d expect to see a 4-bed, 5-bath home built, you would also expect to see a large backyard with a lush lawn, a cedar deck, perhaps a flagstone patio, and maybe even a jungle-gym for the kids.

In the case of this property with the laneway home, there was probably a distance of only 15-20 feet from the back door of the house to the wall of the laneway home, with no real useable “backyard” space for the main home.

While I can’t speak for every Leaside homeowner or buyer, I can say that, based on my experience, this isn’t what people in the area want.

Of course, a home only needs one buyer, so maybe it doesn’t matter what the 99% want, and it only matters what the 1% are looking for and will purcahse.

But there are geographic areas, property types, and price points where laneway houses will not make the home any more saleable, and will, in fact, make the property more difficult to sell.

Further to that point, a laneway home, in some areas, could actually be a major detriment.  Not everybody wants a laneway home, whether they have to pay a premium, or not.

Does this help solve the City of Toronto’s housing crisis?

Many years ago, I was working with clients who wanted to purchase a multi-unit dwelling in the downtown core.

We found a great triplex on a major street and they were quite enamoured.

They thought about how to add a fourth unit in the unfinished basement, and we determined that this could add some incredible value.

But then one of them said, “We could add three or four more units if we added a couple of storeys on top of the existing structure.”

I paused and chewed on this.

Then I casually said, “Sorry, come again?”

“Let’s add a third storey!  Maybe a fourth!”

I then had the unenviable task of explaining to these folks, who were both architects, and had lived all over the world, and studied housing in major world-class cities, “We just don’t do that here in Toronto.”

They looked at me like I was crazy.

But to them, the idea that you could only have a two-storey dwelling on a street like Dundas, Queen, Bathurst, or King was absurd.

Maybe it was.  Maybe it is.  And maybe relaxing restrictions – especially archaic ones, on density in the downtown core of our city is exactly what’s needed to move the city into the future and help ease the housing crisis.

Years later, I would see what those two brilliant architects had done with their knowledge, foresight, and skill.

Check out Smart Density, if you haven’t already.

From their website:

If we had to sum up what we do in one neat sentence, it would be:

Architecture and Urban Planning firm for forward-thinking developers and creative municipalities who want to achieve Smart Density.

“Smart density” in a city like Toronto, which is already experiencing a housing crisis, is likely not two-storey limits on Queen Street in the downtown core.

That’s my take, at least, and I won’t speak for the folks at Smart Density.

But to get more housing built in Toronto, we’ll have to get creative, relax restrictions, see the public sector work with the private sector, and speed up the applications/approval process.

Laneway housing is one way to get more homes built in Toronto, but is it enough?

If a tree falls in the woods, and nobody is around to hear it, does it make a sound?

Debate that.

But if a city with a population of three million people adds forty new laneway houses per year, is it enough to upset the apple cart?