After years of study and debate, Toronto City Council recently agreed to allow laneway suites. The units must be used by the homeowner or rented out and cannot be severed. They are restricted to the former City of Toronto and Borough of East York.

"What's especially encouraging about this change is city hall's willingness to expand its implementation of ‘as-of-right' zoning to accelerate homebuilding," says Josef Filipowicz of the Fraser Institute in a blog post. "Rather than facing the burdensome process of rezoning to add units to their properties -- a process which takes more than half a year, on average, in Toronto -- homeowners can proceed with the timely construction of much-needed housing units."

The city has 1,907 laneways, totalling 227 km, in the communities where the suites are now permitted.

Laneway suites have been approved in many Canadian cities, including Vancouver and Ottawa, but in Toronto they were only considered on a case-by-case basis. The amount of red tape involved was enough to scare away all but the most dedicated homeowners, and in most cases the units were prohibited.

The last time Toronto City Council discussed laneway suites was in 2006, but the idea was rejected on the grounds that severing and servicing the suites would cause too many headaches. They also violate a bylaw that prevents building "a house behind a house".

The new rules prohibit severance and all of the suite's services (water, sewage, garbage, mail and emergency services) are sourced from the principal residence.

As the final report recommending the changes states, "Laneway dwellings are designed to be secondary suites, not houses -- essentially a basement unit but with more light and privacy."

The suites add more living spaces in the community without changing the look or character of the neighbourhood. They also don't require infrastructure improvements because they use the services of the principal house and are close to public transit and local amenities.

They serve a trend toward intergenerational houses, where adult children, empty-nesters and caregivers can all live in the same place but maintain their privacy. They also improve the look and safety of the laneways.

In Toronto's expensive housing market, laneway suites offer advantages for both homeowners who can rent the suites out to help with their mortgage payments, and renters who want to live in established areas where the vacancy rate has been very low for years.

Ninety-five per cent of new housing built in Toronto from 1996 to 2006 was purpose-built for ownership, says a city report, and the supply of rental housing has not kept up with population growth. Secondary suites in homes were approved in 2000 and now it is estimated that one-fifth of the city's rental stock is in these suites in principal residences.

Perhaps surprisingly, during the last couple of years of consultations with residents and local community associations, there wasn't much opposition to the idea of laneway suites. But among the concerns were privacy and overlook from neighbouring properties; the elimination of trees and loss of green space; shadowing onto neighbouring properties; lack of parking; increased traffic; access for emergency services and snow clearing; increased stress on local parks, schools and amenities; and noise.

Some of these were addressed by regulating the orientation of windows, balconies and roof slopes to try to maximum privacy, overlook and shading issues. But it was generally agreed that the suites would likely not encourage car ownership in the neighbourhoods because they will be well-served by transit. There is also a trend away from urban car ownership as car-sharing alternatives become more popular.

"Laneway suites are not a silver bullet to our housing needs," wrote former City of Toronto chief planner Paul Bedford in a column in the Toronto Star. "They are likely to only offer a few thousand small units, initial estimates of 100 a year, that will likely come online at market rent." But Bedford says that "given the severity of our region's housing challenge, even small solutions are important ones. We must demonstrate that we are able to take an idea into implementation. We will need many more solutions to be implemented quickly and a more robust ecosystem of housing options."

Eventually is it possible for a city to build its way to affordability, says Filipowicz.

He says adding density to Canada's cities shouldn't be difficult, pointing to Brooklyn, N.Y. as an example. It has the same population as Toronto in one-third of Toronto's land area, he says, adding that San Francisco has about the same land area as Vancouver but with about 30 per cent more residents.

"When sufficient new density is added, the average cost of buying and renting eventually goes down," Filipowicz says. "In Tokyo, a prosperous growing city three times as dense as Toronto, home prices have risen negligibly since 1994.

"So, the good news for Canada's most spatially constrained cities is that perennially high (and growing) housing prices aren't inevitable. Not only is there plenty of room to boost the housing supply, but experience in other high-density world cities shows that it's indeed possible to build our way to affordability."