A Guide to Toronto Laneway Housing & Suites

Turn your rear garage into a rental suite.

Imagine if you could turn your rear garage into a rental suite to bring in a few extra dollars each month. Not only is your garage for your car, bike, or old stuff but it can also now be for people. In an effort to combat the current housing crisis, the City of Toronto does permit laneway suites under certain guidelines. In 2018, the City started a pilot project which will incent appropriate homeowners to apply for laneway suites in their current garage or coach houses.

Toronto Laneway Housing

A laneway suite is defined as a small dwelling at the rear of a residential lot that is detached from the primary home. All of its services (water, sewer, electricity, gas, garbage, mail, etc.) come from the front street, not the laneway. It will have its own kitchen and bathroom. It can be used for family, or as a rental, but is not severable. The suite also has to abut against a public lane, not a private one and there can only be one self-contained dwelling unit. It must always remain under the control of the owner of the principal house. Laneway suites may be used for long or short term rentals.

Here are the particulars of the pilot project, courtesy of City of Toronto:

The Affordable Laneway Suites Pilot Program provides funding in form of a forgivable loan of up to $50,000 for eligible property owners developing a laneway suite. The loan will be forgiven in 15 years from the date when the first tenant occupies the laneway suite. The rent being charged cannot exceed City of Toronto average rent guidelines by bedroom type at any time during the 15-year affordability period, as reported annually by Canada Mortgage and Housing Corporation. This Program was approved by Council in June 2018.

Who Can Apply:

  • must own a single-family home that is abutting a public lane within Toronto and East York District
  • must conform with applicable zoning and other by-laws as determined by Toronto Building through a zoning certificate or building permit
  • must have applied for building permit
  • must enter into an Affordable Laneway Suites Contribution Agreement with the City
  • must be approved for the Development Charges Deferral Program for Ancillary Secondary Dwelling Units

How to Apply:

  1. Applicants must:a. have applied for building permit with Toronto Building, and

    b. be approved under the Development Charges Deferral Program for Secondary Dwelling Units.

  2. Contact the Housing Secretariat (refer to Contact Information) to receive an application form.
  3. Once Housing Secretariat staff have confirmed your eligibility for the Program, you or your lawyer will be sent the Agreement for signature.
  4. After the agreement has been executed, you will need to retain a lawyer to register a mortgage/ charge on title to your property to secure the loan amount.
  5. A copy of the mortgage/ charge document is required as part of the first payment request.
  6. Once Housing Secretariat staff have reviewed and approved the first payment request, you will receive a confirmation letter from the City that funding is approved and can begin construction.
  7. Applicants can request for final payment once construction is complete and the laneway suite is occupied by a tenant.

While the laneway suite does not require you to have a dedicated parking spot for it, you do need two bike parking spaces, either inside the suite or within a prescribed setback.

This is a strong sign of the City’s commitment to try and combat the current rental problem, that they are providing financial incentives to homeowners through this program. The City states that there are over 2400 laneways with over 47,000 houses in Toronto which they see as an untapped resource for future sustainable residential rental development.

toronto laneway housing

The Toronto Real Estate Board supports this initiative as well. “Ensuring adequate, affordable, and appropriate housing supply is a priority for TREB and our Members. This is why TREB supported City Council’s actions, last year, which allowed for laneway suites in the Toronto and East York District, and why we are supporting the current recommended changes to expand this to the whole City,” said Michael Collins, TREB President. “Laneway suites help address numerous issues. As a form of mid-density low-rise housing, they help to fill the void of “missing middle” housing types. Furthermore, as an ancillary suite to a primary dwelling, they are likely to help provide additional rental housing supply and can help foster home ownership, at the same time, by providing additional income for the owner of the primary dwelling. They are a win-win scenario,” he added.

If you have a rear garage that opens to a public laneway and would like to investigate if you could turn it into a laneway suite, please contact me at paul@plex.ca and I will arrange to come and have a look.

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