I know my father doesn’t read my blog, but that’s okay. My stepmom does, occasionally, and if there’s something that he really needs to see, she’ll tell him.
We visited them on Saturday for the first time since Christmas. While still choosing to social distance, and stay outside, it was a reminder of what’s important in life. Really, truly, that two hour visit rejuvenated me more than words can explain.
If you read last Wednesday’s blog, you’ll recall that my mind was starting to melt a little, and I chose to combine the incongruent topics of “Laneway Housing” and “The Beatles.” A couple of the readers commented, which I enjoyed, including one man who said his wife as at the Toronto concert in 1966.
Sitting outside in the sun, I asked my Dad, “Did you ever see the Beatles play live?”
His gut reaction was, “No.” But then he added, “Wait, yes.”
Huh? How can you forget something like that?
“When did you see them?” I asked, knowing that they played four concerts in Toronto; two in 1964, one in 1965, and one in 1966.
“The first one,” my Dad said, as my jaw dropped.
“The first concert? The very first one?” I asked. “September, 1964?”
“Yup,” my Dad said. “Both of em.”
“WHAT?” I exclaimed. “You went to both Beatles concerts in September of 1964? Why have I never heard this before?”
My Dad had this blank look on his face. It was like seeing the biggest band in the history of music, not once, but twice, was something that didn’t really stand out as significant through his seventy-three years.
“You couldn’t hear shit,” he said. “Not a goddam thing. Maple Leaf Gardens was an awful venue for a concert. It wasn’t set up property. And the girls who just screamed bloody murder for two hours straight; you couldn’t hear anything. You just watched four guys on stage move around a little bit.”
I remain fascinated by this experience, and I’m going to come back to it the next time I see my Dad.
I also wanted to come back to the topic of laneway housing, since we left off last Wednesday.
I provided a link last week to a company called Laneway Housing Advisors, run by a gent named Marty Steele. After my blog went up last week, Marty called me and we talked a little shop.
The most interesting part of that conversation was a point Marty made: that no combination of existing ‘main’ house and laneway house have sold on the open market yet.
Think about that.
We’ve seen laneway houses sell. A bunch of them.
We’ve seen houses sell that are eligible for laneway housing.
But we have yet to see a property, or call it a “parcel of land” with two houses on site, sell on the open market.
Marty said to me, “It’ll be really, really interesting to see how that goes down,” and I wholeheartedly agree.
A reader emailed me last week with the following:
Hi David,
The subject of laneway housing is really cool.
Have you given any thought to how these would be financed, ie. if a property sold with two houses on it?
Thanks!
J.
Well, as much as it pains me to admit this, I actually hadn’t.
First of all, if you’ve got a $1,000,000 rownhouse in Little Italy, or The Junction, or Brockton Village, and the existing owner has built a laneway house for, say, $300,000, what is that property worth?
Is it worth $1,300,000? More? Less?
Did the owner, who sunk $300,000 into the build, make money on this venture? Did it add $400,000 worth of value to the property?
I have no answer here, since I’ve yet to see one of these sales.
But to answer the reader’s specific question about financing, I have to wonder how a lender would view this purchase at, say, $1,300,000. Is this a slam-dunk for them? Simply look at the value of the property as opposed to the main house and secondary house?
Would there be any issues with financing?
I can’t think of any reason why, especially when you consider that there’s undoubtedly income coming from that second house. Whether or not a buyer can use the potential income from that secondary unit for qualification purposes, remains to be seen.
A second email of note:
Hey Dave: A lot of these laneway houses are really just apartments above garages. What do you think about scrapping the parking and having either two units stacked on top of one another, or using both levels to make one larger two-storey unit?
You see, now I’ve got people thinking!
I know a lot of the comments on Wednesday’s blog were on other topics, as is often the case. But these emails showed me that a lot of readers are thinking long and hard about how this would all work.
Here’s my two cents: I think a house with parking has value. I think removing parking, either to create one 2-storey unit, or two separate flats, would be addition by subtraction. A $1,200,000 semi-detached house with a one-car garage off the laneway is worth $1,100,000 without that garage and parking, ie. the same house two doors down, relegated to street permit parking. So if you spent a whack of money to remove the parking/garage and create one or two units, I think you really think out your buyer pool, which is probably thinner to begin with, just based on the unique appeal of secondary housing on a property.
For my money, I like the idea of building a 450 square foot apartment atop the main-house’s garage. There, you get the best of both worlds.
Now as for what is currently being built in Toronto, where, and by whom, I’ll give you a recent Newsletter I received from Laneway Housing Advisors, in full:
A few quick project photo updates this past week, all on the east side:
MHG Design Inc. is moving quite close to completion of their project off Danforth:
2×2 Construction has completed framing of their laneway house near Main Street Station. They have lots of progress photos on their Instagram feed also, HERE.
And of course we don’t know the completion date or project schedule, but the Lanescape / Laneway Home Building Experts (LHBE) 495-square foot laneway house (also off Danforth) is getting closer to completion this week.
Already the runaway leader in builds underway and in planning, both Lanescape and LHBE have announced many more laneway projects coming soon, on Instagram. Lanescape on Instagram. Laneway Home Building Experts on Instagram.
While this might seem like my topic-du-jour, something tells me I’ll be coming back to this again in the near future.
And when that first property with two houses on it does sell off MLS, I’ll be digging deep into the before, during, and after of that sale.
Happy Monday, folks!
Kyle
at 7:41 am
This is a good topic, i have wondered whether building a 600 sq ft laneway house would add more value than a 600 sq ft addition. In my view the laneway house offers a lot more flexibility for sure (e.g. can generate income, be used for multi generational living, used as a home office, used as a guest suite, etc), but i think it comes down to what the buyers in that particular neighbourhood are looking for.
While a house with laneway house built under the new rules hasn’t sold yet, there are examples of houses with coach houses that have sold together. 878 Palmerston Ave definitely had a coach house and If i recall there may have been a couple on Palmerston Blvd, Sorauren Ave, and there definitely was one recently on Summerhill Gardens. From what i could tell the coach houses seemed to add a hefty premium (i.e. more $/sq ft than comparables) to the price.
Just a note, regarding the second reader’s question, the new rules do not allow two units stacked on top of each other. I think current zoning only allows any property to have no more than two units, unless you apply for rezoning. So if you have a basement apartment you also can’t add a laneway house, as that would make it three units on that property.
Laurie Hung
at 9:52 pm
You can actually have a basement apartment AND an laneway house under the new bylaws, but you cannot have 2 units in the laneway house even if you do not have a basement apartment
Marty
at 8:33 pm
This is correct.
Jeff
at 7:54 am
Beware of marginal properties. They are market viable when things are red hot but are the first to tank. Laneway housing is evil pixie dust that transforms one A grade house into two C grade properties.
Elle O'lelle
at 9:42 am
433 Westmoreland Ave N sold, has a coach house in top of a garage. Doesn’t that count?
Appraiser
at 1:10 pm
“You can now lock in for 10 years … for less than you could’ve locked in for 5 years in March”
“Long-term Money on Sale: If you’re willing to commit to a decade-long term, and you live in Ontario, you can now do it for less than at any time in history. 10-year fixed rates are now as low as 2.79% (an effective rate including cash back) for well-qualified borrowers in Ontario.”
https://www.ratespy.com/10-year-fixed-rates-sink-to-record-lows-061914454
Jimbo
at 4:23 pm
That is insane…… What a year for those with less than 2 years left on term or in variable terms
Jf
at 3:48 pm
My husband and I are thinking of doing a rooftop patio on top of the garage. Yes I know it’s not income generating but with such small backyard space, a good idea?? Cool for parties?
Marty
at 8:36 pm
On the south side of Roxborough Street W. (just west of Yonge), in their back lane adjacent to Ramsden Park, there is a whole line, maybe even 12 or 15 in a row of exactly that!
Fearless Freep
at 5:25 pm
Evan Siddall was right (but for the wrong country).
“Sales of Previously Owned U.S. Homes Fall to Lowest Since 2010“
https://www.bloomberg.com/news/articles/2020-06-22/sales-of-previously-owned-u-s-homes-fall-to-lowest-since-2010
Appraiser
at 9:27 am
“Google, Apple, Amazon and Tesla slam Trump’s immigration crackdown:
The Migration Policy Institute predicted that up to 219,000 workers would be blocked as a result of Trump’s executive order.”
Looks like Trump and his short-sighted anti-immigration policies might send some (many?) talented tech workers straight to Canada as an alternative.
https://www.cnbc.com/2020/06/23/google-amazon-tesla-trump-immigration.html
Fearless Freep
at 9:56 am
Shopify first off the mark.
https://business.financialpost.com/technology/shopify-poach-foreign-talent-blocked-trump-immigrant-visa-ban
Ian T
at 10:37 am
270 Withrow Ave just sold and it has two houses (though may not be a specific ‘laneway house’ definition?)
Marty
at 8:41 pm
THIS is an excellent example, VERY close to what today’s laneway houses are. Although technically Withrow is house with coach house.
Price: $2,399,000
Previously sold for: $1,325,000 in 2011
J G
at 10:30 am
Old news, this has been happening for years. H1B visa has been very difficult to get for tech guys from India.
Btw, all the smart techies graduating from UT or waterloo are all going for Silicon Valley. #CaliOrBust
What’s the point of waiting for Toronto RE to appreciate when you can make $400-500/year USD after a few years at Google/Facebook.
J G
at 10:52 am
Amazon surges past $2750, what a beast! 6 months ago this was $1800.
I’m still maintaining my prediction that it will hit $3000 before 416 condo will recover to Feb high of $727k (per HouseSigma).
J G
at 1:40 pm
https://business.financialpost.com/real-estate/the-theory-of-immigrants-and-foreign-investors-driving-canadas-property-market-is-about-to-be-tested
416 condo. Read the comments, almost all bears.
But hey, no need to worry, bears have been wrong for years.
Appraiser
at 4:03 pm
Another worthless and gossipy real estate piece from FP.
Reminder, the plural of anecdote is not data.
Who really cares what’s happening with some random Chinese realtor’s clients in the $5Million+ property market in Vancouver?
Please.
When the data comes out at the end of the month, the bears will hide.
And be way-wrong.
Again.
Chris
at 4:26 pm
“House prices lag economic events. Current price resilience proves nothing: don’t take comfort from low volume price action. Multiple offers are consistent with a huge decline in new listings. Government support programs have deferred (& reduced) an inevitable economic adjustment.”
– Evan Siddall
In the same vein, John Pasalis chatting with Rob Carrick, once again re-iterating that economic impacts will take until at least Fall to develop, particularly given government supports.
https://twitter.com/JohnPasalis/status/1275462032041611265
Far too early to declare an end to any economic fallout related to the pandemic and associated recession.
As for hiding, bit rich coming from the guy who is nowhere to be found anytime the stock market has a flat to good day, only to re-emerge on a down day. Sometimes only to slink back into hiding as that bad day reverses course!
Fearless Freep
at 9:47 pm
When exactly did Appraiser say anything at all about the stock market today? I know you hate him, but geez…
Chris
at 10:01 pm
Last week:
Chris
at 10:02 pm
Whoops, hit post too quickly!
https://torontorealtyblog.com/blog/covid-conundrum/#comment-121310
Mike in East York
at 12:18 pm
Just 5 years ago if you wanted to build a legal secondary suite the City was REQUIRING you to provide a parking space for that suite. Would that not apply to laneway apartments? Or has the City relaxed its policies?
Kyle
at 2:56 pm
No longer a requirement if you’re building a laneway home. In fact you can delete a parking spot to make way for a laneway home now if you want.
Marty
at 8:42 pm
Kyle is correct here.
Azarius Green
at 8:00 pm
though’s houses are small but they are nice I would like my house like that but bigger.