Laneway Housing & Garden Suites in Toronto

The Suite Life Continues: An Overview of Laneway Housing and Garden Suites in Toronto’s Residential Neighborhoods

On July 28, 2020, Toronto City Council adopted the Expanding Housing Options in Neighbourhoods work plan that aims to increase “missing middle” housing options in Toronto (report here). The term “missing middle” refers to housing types ranging from duplexes to low-rise apartments and includes laneway and secondary suites within the City of Toronto’s (the “City”) existing neighbourhoods. The work plan also promotes exploring opportunities for inclusionary zoning and dwelling room protection. This work plan follows Bill 108’s changes to the Planning Act, which require municipalities to introduce secondary suite provisions to their zoning by-laws and official plans.

Since this aspect of Bill 108 came into effect on September 3, 2019, the City has adopted Official Plan Amendments 403 and 460 as well as Zoning By-laws 810-2018 and 1210-2019 to permit the creation and construction of laneway suites in specified zones under the City’s Zoning By-law. With over 150 laneway suite applications submitted as of September 2020, the City has initiated a review of another form of secondary suite under this work plan – the garden suite.

Laneway Housing

A laneway suite is a “self-contained residential unit located on the same lot as a detached house, semi-detached house, townhouse or other low-rise dwelling.” Laneway suites are typically located in the rear yard next to a public laneway and are generally smaller in scale and completely detached from the main house on the lot.

Laneway suites are growing in popularity as a means of bringing “gentle density” to established single-family neighbourhoods. With the Covid-19 pandemic changing the way people work and live, they have opened a new world of opportunities for homeowners, including intergenerational living spaces, home offices and many more uses that can be customized into the design. Numerous properties are eligible for a laneway suite as-of-right, often requiring only a minor variance application.

Laneway suites provide homeowners and renters a number of benefits including:

  • Allowing a more affordable form of housing in established neighbourhoods;
  • Making use of existing infrastructure and social services;
  • Bringing gentle intensification into predominantly low-density neighbourhoods with minimal disruption;
  • Creating housing flexibility potential for the main house; and
  • Allowing for customization to fit to homeowners’ needs.

Unfortunately, there are restrictions to where a laneway suite can be built:

  • They are limited to neighbourhoods that are serviced by laneways – predominantly in Old Toronto and East York;
  • The property’s backyard has to be of a sufficient depth to accommodate a laneway suite – a rear yard lot line minimum of 3.5 m backing onto a laneway;
  • They are fairly expensive to build;
  • There are existing limitations including a side yard setback of 45 cm to facilitate EMS access;
  • They often require tree removal; and
  • Requirements that the utilities and servicing be connected from the main house.

While laneway suites are a step forward in diversifying Toronto’s housing stock, they are limited to certain geographic neighbourhoods, making them unachievable for those that live outside the prescribed neighbourhoods. In response, the City has commenced a garden suites review. This review will look at the findings of the laneway suites initiative to help incorporate garden suites as-of-right into established Neighbourhoods in the city.

Financial Incentives

While secondary suite options such as laneway suites might be a more affordable way to acquire another piece of the residential property market in Toronto, they still come at a price of approximately $350/sf, making them quite an investment. In an attempt to encourage the construction and popularity of these residential rental properties, the City has introduced two incentive programs to encourage homeowners to look into adding laneway suites to their backyard.

  1. Development Charges Deferral Program for Ancillary Dwelling Units

The City has waived development charges (“DCs”) for eligible homeowners that build a laneway suite in their rear yard that conforms with applicable zoning and other by-laws. Homeowners must apply for a building permit and enter into a DC deferral agreement with the City. However, if the new lot is severed through a plan of subdivision, consent or condominium within 20 years of the issuance of the building permit, this will trigger payment of the previously deferred DCs.

  1. Affordable Laneway Suites Program

Eligible property owners looking to develop a laneway suite can receive a forgivable loan of up to $50,000 from the City, which will be forgiven 15 years from the date of the first tenant occupying the laneway suite. One caveat with this program is that the rent charged for the laneway suite cannot exceed the City’s average market rent as prescribed by bedroom type at any time during the 15 year affordability period.

Garden Suites

Garden suites are similar in form and function to laneway suites and will generally be located in the rear yard of detached houses, semi-detached houses, townhouses or other low-rise dwellings. One difference between garden suites and laneway suites is that the main property is not required to be located on a laneway, making garden suites more flexible for lots and neighbourhoods within the city. A homeowner may build any detached-accessory-dwelling-unit in their backyard and it may be considered a garden suite, subject to Zoning By-law considerations. This new housing type will create 10 times the potential for development of residential lots in the City’s neighbourhoods. This is a significant increase compared to those that currently qualify for laneway suites.

The City will initiate consultations with interested stakeholders on potential permissions for garden suites in Q1 of 2021 and is aiming to report to the Planning and Housing Committee with recommendations by the end of Q2 2021.


By allowing regular homeowners to diversify existing housing stock themselves through a minimally disruptive development, secondary suites offer a unique opportunity for many families to customize their properties to their particular needs. It is an opportunity to maximize the use of existing infrastructure and services, and to ensure that residential neighbourhoods continue to thrive for generations to come. While the garden suites review is still in its early developments, we will continue to monitor the “suite” future of secondary housing in Toronto.

Should you have any questions, the Davies Howe LLP team would be happy to discuss the various secondary suite options and how they affect your land development.