How the Laneway Housing Policy Will Impact the Toronto Real Estate in 2020

The Canadian real estate industry has gone through major phases in the last year. At the beginning of the year, the mortgage stress test was rolled out making borrowing expensive for a huge percentage of the population.  A few months later, the Toronto city approved the long-awaited Laneway Housing in June 2018. In all honesty, this is welcome news for a number of Toronto residents who have been locked out of the real estate market due to the diminishing number of rental units and ridiculous process for housing units.

Today let’s take a trip to the future and make a few predictions concerning Laneway Housing. What impacts will it have on the Toronto real estate industry by 2020?

An overview of Toronto Laneway suites

Before we get to the bottom of the topic, let’s understand what a laneway suite is. In simple terms, this is a structure, situated in the same portion of a house (either a townhome, detached, or semi-detached) and which faces a laneway. Ideally, laneway suites are dependent on the main building and can gain access to it through a laneway or a sort of an access path that joins to the main road.

Laneway houses are no more than rental units and must adhere to specific design guidelines provided as-of-right Building Permit. The Toronto Laneway housing was introduced in a bid to balance the supply and demand curve for available housing units by making use of available infrastructure, increasing the urban quality of underutilized spaces, and aids in gentle densification the city of Toronto

A peek into 2020

Homeowners (especially first-time buyers) couldn’t be more excited at the Laneway housing guidelines because this means an income opportunity for them. It gives them a chance to unlock the value of their backyards without causing too many interruptions to their own lives. Tenants, on the other hand, can finally live in a decent house together with their families without having to pay unbelievable rent costs or put up in someone else’s basement.

Going into the future, this means that rental prices will substantially come down. The reason is the obvious additional supply of reasonably-priced laneway suites. Currently, Toronto has about 2,400 laneways running about 300 km between city streets and through downtown corridors. Once the complicated process of building a laneway house is made simpler, these units will explode and fill the city.

To keep up with the low rental prices, there are some innovative companies that will create pre-fabricated housing options for even lower prices. Builders will master the art of designing laneway suites. As a matter of fact, don’t be shocked if you get calls and offers of companies claiming to design, develop and even financing a laneway house for you. The city has already recruited Evergreen and Landscape, together with the help of the local community, to help design and put up some units. It is already helping Toronto residents have a big picture of what laneway housing looks like—workshops, walking tours, games, discussions, and art. If all goes well, Toronto is looking at a massive expansion particularly in the desired downtown neighborhoods.