Since June 2018, the city of Toronto has been experimenting with the idea of laneway housing. What does this mean, exactly? Homes that have a garage located at the rear of their property, facing a back alley for local traffic, could be converted into a multi-storey, stand-alone home or rental property. This means two, independent homes on one plot of land. There are no official guidelines yet, and building limitations are high. Laneway homes need to have access to the main street hydro, water, and sewer supply, as well as emergency vehicle access, which means not EVERY property with laneway access would qualify.


The great news is that this once unlivable space could now provide a significant increase in the supply of much needed Rental Housing in Toronto, generate an additional income, and provide more eyes and security to the neighbourhood. For homeowners looking a way to generate a second income or pay off a mortgage quickly, the rental income opportunity is excellent. As with most homes when there is a change in use for a Property, it is really a good idea to look at your insurance program. With the additional living space comes additional liability and risk, and you need to make sure you have the proper coverage to satisfy your needs as well as any legal or city compliance requirements.


The benefits to using the laneways as residential streets include giving lower income families access to existing residential neighbourhoods. Alternatively, multi-generational families can continue living privately, but within the same lot. Could this be the new solution for the “in-law” suite? Allowing parents to still have their independence but giving the children the peace of mind that they are a few minutes’ walk from the house if they need help.


Of course, a change like this is not without some concerns. Potential challenges with parking accessibility is a big one, but it is clear the Toronto has started the process to review and amend their stance for laneway homes based on the accessibility of public transit to the proposed Laneway Property.


The City of Toronto is leaving it up to the homeowners to determine whether they wish to convert their garage into a laneway house, meaning you could choose who your closest neighbour could be!


From an insurance perspective, it will be important for any homeowner to understand what they need to do to manage the risk of having a Construction Project on-going in their backyard. It is unlikely that a standard homeowner policy would provide the appropriate coverage required for the Construction Phase of a Laneway Project.


If you have questions about the viability of Laneway Housing for your property or as an Investor, contact Case Insurance Brokers. We have access to all of the people you will need to engage to get your project off the ground, from Real Estate Specialist to Financing to Architects to Contractors to Lawyers. We are here to support you!


Want more information?  Check out Evergreen for their take on the matter.