A few weeks ago, Equitable Bank launched a new construction financing product for laneway homes and garden suites in Canada. Here is the announcement. This is generally good news. When we completed Mackay Laneway House back in 2021, the banks hadn't yet gotten their head around this housing type. I remember RBC getting tripped up on the fact that there were two detached dwellings on the same residential lot.

That said, there are some important conditions around this new mortgage product:

"The Laneway House Mortgage is offered on properties that are free and clear, or in combination with new or existing mortgages where Equitable Bank holds, or will hold, the first position."

In other words, they want no debt on the property or they want sufficient equity in the property -- but Equitable Bank needs to hold the mortgage. I suspect that most of the people who have built laneway and garden suites have done so by leveraging the equity in their main house; so I'm not sure how "innovative" this product will end being in practice. You'll also need to switch to Equitable Bank if you have your mortgage with another lender.

Still, if you're looking to build one of these homes -- and I continue to believe that they make a ton of sense both financially and from a city-building standpoint -- it wouldn't hurt to see what Equitable Bank can offer.

This is not a post about laneway housing. Okay, it sort of is. But there's a broader point to discuss. Recently, a local Toronto newspaper ran this article talking about how a bunch of people are upset that their neighbor is building an as-of-right garden suite. Here's an excerpt:

“The members of the community know that they can’t stop the building of this ‘garden suite’. However, they want to change the bylaw to ensure that future ‘garden suites’ can’t be built without community consultation and an environmental assessment,” said a news release from a number of residents in the area that was sent to Toronto media outlets including Beach Metro Community News last week.

This raises some interesting questions.

For one, what would be the purpose of this community consultation? Is it just a "Hey, I'm going to be building a garden suite" and then homeowners go do it exactly how they want anyway? Or, would it be an extensive community engagement process where homeowners would be expected to gather feedback, submit a report to the city, and consider design changes?

And, would this apply to all low-rise housing? In other words, would all homeowners need to consultant their neighbors and do an environmental assessment before pulling a building permit? What if someone just wants to build a small extension or a shed? Or, are we only talking about laneway and garden suites?

I'm not really sure what the exact intentions are here -- besides delaying new housing -- but I can tell you that it's a terrible idea.

Laneway and garden suites should never require community consultation and/or an environmental assessment. I mean, this is the whole point of allowing them as-of-right. It's so you don't have to do these things and you can go straight to a building permit. This is way too small of a housing type to burden with obstacles.

In fact, the same is true of larger housing types. In my opinion, conventional mid-rise buildings should not have to go through a full rezoning and they should not have to consult with the community. We already know what these buildings look like. We know that they make for great homes. And yet they're our most expensive housing type to build.

Removing barriers (and reducing project durations) is a sure-fire way to make them cheaper. Especially in a higher interest rate environment.

Brigitte Shim (of Shim-Sutcliffe Architects) invited Gabriel Fain and I to the Daniels Faculty this morning (at the University of Toronto) to talk about Mackay Laneway House.

It was for a class on laneway housing and, as it turns out, some of the students had been using MLH as a case study. That's pretty cool, although the primary lesson is probably "don't build next to large trees."

Following the presentation, we had a good discussion about laneways, and it reminded me of some of the things that I believe to be true. More specifically, it reminded me of what I think will happen in the future:

• Bona Fide Streets: Laneways will become bona fide streets. Meaning, they'll get real names (most don't have one today) and they'll get serviced. Today, laneway suites are typically serviced via the main/existing house.

• Severable Lots: Laneway lots will become severable. Right now this is strongly discouraged, because the intent is to create new rental housing and not new for-sale housing.

• Market Inversion: Once these lots become severable, the market will then be able to decide which frontage is most valuable -- the current street side or the laneway side. Maybe some get split right down the middle (50/50) or maybe some get biased toward one frontage. Either way, I think it will become common for the laneway frontage to be more desirable given its intimate scale and pedestrian orientation.

• Mixed-Use: Non-residential uses will become allowed.

I have no idea when all of this might happen, but I believe it will happen. So I wanted to write it down publicly.