Brandon Donnelly

Daily insights for city builders, delivered every morning at 6 AM ET. I’m Brandon Donnelly — a Toronto-based real estate developer and founder of Globizen. I’ve been writing here since 2013.

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Tag: laneway suites

  • Rear-yard suites and secondary suites built in Toronto over the last decade

    Here is a mapping, from the University of Toronto’s School of Cities, showing the number of “closed” building permits issued in Toronto between 2013 and 2023 for both rear-yard suites (laneway houses and garden suites) and secondary suites (like basement apartments).

    A “closed” building permit probably means that construction is complete. However, it is not uncommon for a permit to inadvertently remain open. This happened to me with Mackay Laneway House. The permit was supposed to be closed, but it wasn’t.

    So here’s the same mapping with open (i.e. active) permits also turned on:

    Three things immediately stand out:

    1. Secondary suites seem to be somewhat evenly distributed across the city.
    2. Rear-yard suites are heavily concentrated in the older areas of the city, flanking the downtown core.
    3. North Toronto is wealthy and isn’t having either of these housing typologies.

    Looking at these mappings, it probably seems like a decent amount of new housing. But that’s not really the case:

    • From 2013 to 2023, Toronto issued 2,209 building permits for secondary suites (1,525 have been closed and 684 remain open as of December 31, 2023).
    • And from 2020 to 2023, Toronto issued 898 building permits for rear-yard suites (192 have been closed and 706 remain open, which does suggest some increased adoption). Rear-yard suites only became permissible in 2018, which is why the date range is shorter.

    To be fair, I would imagine that many secondary suites get built without a building permit. So I think the above number is probably underestimating actual supply. But even still, it doesn’t change the conclusion: A lot more needs to be done to increase the supply of new housing in Toronto.

  • Toronto’s laneways should be mixed-use

    Up until last year, non-residential uses within Toronto’s low-rise neighborhoods were typically legal non-confirming uses. Meaning, the use wasn’t technically allowed, but if it had been there for a long and continuous time, we would let it slide and say it’s legal.

    Then we decided that small-scale retail, service, and office uses might be kind of good in our neighborhoods. Especially if they empower people to perform their daily necessities without a car. So we agreed to allow these sorts of uses provided they don’t annoy too many people.

    But what about in Toronto’s laneways? Can and should they go there, too?

    Recently, we’ve spoken a lot about the case for bottom-up city planning, and the value of micro-spaces and micro-businesses (à la Tokyo). And my overarching argument has been that these are a positive thing for cities. They create opportunity by lowering the barriers to entry.

    But we need to get out of the way and we need small and affordable spaces. Which is why it’s hard to imagine a more ideal place than in our laneways, especially considering that there’s a long history of these spaces being used for exactly this. (Read this recent article by John Lorinc.)

    Fortunately, this idea continues to gain positive momentum, thanks to people like the late Michelle Senayah (co-founder of the Laneway Project) and Blair Scorgie (a partner at Sajecki Planning). So in my mind, it’s only a matter of time before we start getting out of the way.

  • Thank you for your service, Gregg

    It was bittersweet to learn last week that Toronto’s chief planner — Gregg Lintern — will be retiring at the end of this year.

    He accomplished a lot during his six-year tenure. Here’s an excerpt from a recent Globe and Mail article by Alex Bozikovic:

    “…he took the department through significant reforms: allowing new houses in back laneways, then garden suites; eliminating minimum parking requirements; even legalizing four-unit apartment buildings on any lot in the city.“

    All of this was not easy, as anyone in our industry will attest.

    I also got to know Gregg, a little, by way of our development projects. And I can say that he (1) genuinely loved our great city and (2) was always looking for ways to make things better, whether that be through planning policy or through processes internal to City Hall.

    Thank you for your service, Gregg.

  • How to create narrow European-style streets

    If you’re a regular reader of this blog, you’ll know that I have a thing for narrow streets. Which is why when I travel I sometimes (okay, oftentimes) bring a laser distance measuring device with me. I like measuring things so that I have dimensions that I can feed back into our own development projects. But perhaps most importantly, it allows me to appear as nerdy as humanly possible while traveling. Walking around with just a camera in hand isn’t enough. You need to try harder than that. And so far the narrowest street that I have come across was in Noto, Sicily at just over 1.3m wide.

    If you also like to fawn over narrow European streets, you may enjoy this recent video by City Beautiful. In it, Dave Amos compares European cities, like Rome, to US cities, like Salt Lake City and Philadelphia, and then asks: Can the US build European-style street networks? His immediate answer is, “probably not.” And this is something that we have talked about before on the blog. Street networks tend to be really sticky. They’re hard to change. However, there is another possible solution: create new smaller mid-block streets. And that’s the focus of Dave’s video:

    But if you think about it, this condition already exists in a number of cities. Here in Toronto, we have somewhere around 300 kilometers of laneways, which tend to range in width from 4 to 6m. These are European-scaled streets and amazingly they’re already in place! The only difference is that, today, they mostly serve a back-of-house function. They provide access to garages. However, that is quickly changing with the introduction of laneway suites. And so over a long enough time horizon, our laneways are going to inevitably flip from back-of-house to primarily residential.

    Though maybe there’s even more we could do with this asset. European cities manage to fit retail, restaurants, patios, and more within 6m. Why not do the same with some of our narrowest streets?

  • Beautiful brick mid-rise proposed for Toronto’s Junction neighborhood

    Last week, Sierra Communities (developer) and my friend Gabriel Fain (architect of Mackay Laneway House fame) submitted the above development proposal for 2760 Dundas Street West in the Junction. It is a beautiful proposal. So not surprisingly, the response has been overwhelmingly positive. Here are the first batch of comments from Urban Toronto:

    It also happens to be one block west of our Junction House project, so I definitely would have been annoyed if somebody proposed something ugly here. I am 99.9% biased, but I think the Junction has some of the best new mid-rise buildings in the city. Presumably, this is what “Mrgeosim” was getting at with their comment about “the number of good proposals for this neighbourhood.”

    But here’s the thing. This is a relatively small proposal. It’s a 6-storey mid-rise building with 28 new homes on top of a tiny 482 square meter site (16m frontage). This makes it a challenging new development to execute on. So the fact that this is required to go through the typical rezoning and site plan processes is, in my opinion, a painful problem.

    We should be doing everything we can to encourage these kinds of new housing developments all across the city. And that necessarily means removing as many barriers as possible. A pair of development applications and a few community meetings may seem benign, but they’re not. They add time and real costs that then need to be passed onto future residents.

    There is also a very valid question around what kind of development charges (or impact fees) we should be levying on projects of this scale. If you want to build a laneway suite in the City of Toronto, you can have the development charges deferred and eventually forgiven. Why? Because we want more rental housing and we have arguably recognized that it’s important for project feasibility.

    Should the same apply if you’re building 2 new homes, or perhaps 28 new homes? At what point should the “impacts” kick in and the fees be levied? And might there be an argument that adding many new homes on top of small 482 square meter parcels is actually an incredibly efficient way of using existing public infrastructure? I think so.

    Congratulations to the team on a beautiful proposal! I’m looking forward to this being our neighbor.

    Image: Gabriel Fain Architects

  • Finally — garden suites are now permitted in Toronto

    Some of you might remember that Toronto City Council approved new garden suite policies earlier this year. Garden suites (also known as accessory dwelling units) are kind of like laneway suites but without the adjacent lane.

    Unfortunately, these new policies were subsequently appealed by a group of Resident’s Associations, and so they haven’t been in force. Thankfully, the Ontario Land Tribunal has just dismissed this appeal:

    What this means is that, as of today, you’re now free to build a garden suite in the City of Toronto. So hire an architect and file for a building permit — it’s go time. If you need any referrals, please feel free to reach out.

    The Ontario Land Tribunal is often criticized for its ability to overrule local communities on land use matters such as these. But this is a good example of why it is needed and why it is important to have some kind of neutral arbitral.

    Because these sorts of decisions should not be based on what any one individual or group thinks; these decisions should be based on what makes for good planning and what makes the most sense for the broader city and region.

    Invariably, this is going to piss some people off. But in my mind, it’s kind of like that asshole teacher you used to have. Sure, you hated him/her at the time, but in retrospect you end up appreciating what they were trying to do to help.

    This could be a bad analogy.

  • 6-unit missing middle site for sale in Toronto

    Marty over at Laneway Housing Advisors published this listing in his newsletter today. It’s for an entitled lot at 78 Gladstone Avenue in Toronto that has been approved (by way of a minor variance) for 6 units. Five units in the front where a house currently sits and one unit at the back in a standalone laneway suite. Though it also happens to be a corner lot and so the laneway suite isn’t really “in the back”.

    It’s listed for $2.5M. And according to the description, you can build about 5,500 square feet (4,200 sf in the front with a 1,300 sf laneway suite). This ask translates into a land cost that is just over $450 per buildable square foot, which is far more than what high-density land typically trades for in the city right now. This is usually the case for smaller low-rise sites.

    To help put this figure into some kind of context, Bullpen Consulting published in their latest insights report that the average high-density land price in Q4-2021 was $135 per buildable square foot in Toronto (416 area code only). Of course, averages only tell you so much. To truly evaluate the feasibility of a site like this, you’d need to create your own pro forma and do your own residual land value calculation. The value of development land depends on what you can build on it.

    If you were to do that, I suspect that you would discover at least two things: 1) you would find it challenging to make the numbers work, particularly for rental housing, and 2) you would quickly realize that this sort of “missing middle” housing isn’t, in its current form, some undiscovered bastion of housing affordability.

    Part of the problem is that these 6 units are not being delivered on an as-of-right basis. Somebody had to go out and entitle the land in order to secure these permissions. That means that time and money were spent and that the current owner is now rightly seeking a margin for their efforts. But if we collectively believe that this is an appropriate and sensible form of housing, then this should not be a necessary step in the whole process. Especially for only 6 units.

    All of this being said, we know that Toronto and many other cities around the world are taking a hard look at this issue. And that there is a groundswell of interest in allowing more housing in our low-rise communities. It’s going to be a battle — just look at how Toronto’s new garden suite policies have now been appealed by various resident’s groups. But I’m certain that we’ll get there, just like we are getting there with laneway housing and other types of ADUs.

  • Toronto has issued nearly 200 building permits for laneway suites — is that enough?

    We talk a lot on this blog about laneway housing and ADUs, including, of course, the one that Globizen built earlier this year. But beyond being exceedingly cool (see above), what has this policy change meant at the macro level? To what extent is it actually helping housing supply? Let’s consider Toronto.

    As a reminder, “laneway suites” became permissible in the former/old City of Toronto in 2018. The policies where then expanded to the entire city of Toronto in the summer of 2019. So we’ve had just over 2 years of this housing type being fully allowed city-wide.

    Though it’s worth keeping in mind that there are only so many laneways in Toronto (which is why “garden suites” are going to be important and may actually end up being more impactful):

    Between the introduction of laneway suites and June 2021, the City of Toronto received 306 permit applications to construct, of which 238 were associated with a unique address (the same address can have multiple permit applications).

    During this same time period, 183 permits were issued. 107 were still under review at the time this report was written. 15 were refused. And 1 was classified as “unknown”, which I guess means it got lost in the ether or under someone’s desk.

    Some of you will probably argue that this isn’t enough new housing for a city of 3 million people with high home prices, high demand, and high immigration. And I would agree.

    But it’s still early days, there will be an adoption curve, and the policies are still being tweaked to further remove some of the barriers associated with delivering this housing type. Of the 238 unique addresses that submitted a permit application, just over a quarter of them had an associated minor variance application, which means that they did not fully conform to the current laneway suite by-law.

    The most common obstacles appear to be the 1.5m laneway setback, the soft landscaping requirements, and the required fire access. But I know that there are others too. I could have used another foot or two in height on mine.

    But as I mentioned before, there are more areas in this city without laneways than with. And so garden suites are going to be an integral component of city-wide ADUs. This will certainly help the adoption curve.

    I continue to believe that these are all steps in the right direction and that this is an exciting time for Toronto. We are in the midst of transforming our laneways. But we’re not done yet. We’re going to have to make many other tough decisions in order to further increase housing supply. I’m positive we’ll get there.

  • Longer-term benefits of Airbnb for housing supply

    There is a commonly held view that short-term rentals (such as the ones you might find on platforms like Airbnb) are bad for housing affordability because they take long-term rentals out of the market and they help to drive up property values. And there’s evidence for this. A study published in Harvard Business Review found that home-sharing alone might be responsible for about 20% of the average annual rent increases across the US.

    Findings like these have encouraged municipalities around the world to put restrictions in place for STRs. But like most policy issues, there are nuances. And the thoughtful answers are rarely as obvious as they may initially seem. This has been part of my complaint around inclusionary zoning. It sounds good when politicians say it: let’s just get developers to build us free affordable housing. But again, there are nuances to consider.

    Short-term rentals are similar. A recent follow-up study that was again published in Harvard Business Review has actually uncovered some interesting longer-term benefits to STRs.

    Using residential permit data, Airbnb listings, and STR policies across the US, the team found that when you look over a longer time horizon, Airbnb listings actually tend to increase the supply of residential housing. On average, a 1% increase in Airbnb listings led to a 0.769% increase in permit applications. Supply is of course good for a whole host of reasons, one of which is boosting the local tax base.

    Conversely, they found that restricting STRs tended to reduce the supply of new housing and renovations. After new regulations were put in place affecting STRs, Airbnb listings fell on average by about 21% and residential permits fell by 10%.

    Restrictions also seem to have a direct impact on the construction of things like accessory dwelling units (laneway and garden suites for us here in Toronto). When analyzing data in and around the borders between jurisdictions in Los Angeles County, the researchers found that areas without STR regulations saw 17% more ADU permit applications compared to the areas that had restrictions.

    For the 15 US cities that the team studied, they conservatively estimated that STR restrictions reduced property values by about $2.8 billion and impacted tax revenues by about $40 million per year. Some cities, like Chicago, have also found success using STRs as an economic development strategy in distressed neighborhoods, which would further bolster the tax base.

    All of these findings suggest that a more nuanced approach to STR policies is probably merited.

    Photo by Andrea Davis on Unsplash

  • Make your voice heard in the City of Toronto’s “Garden + Suites” housing survey

    As many of you know, Toronto currently allows “laneway suites” across the entire city on an as-of-right basis. What this means is that no variances or special planning permissions are generally required to build. Assuming you meet the by-law, you can go straight to a building permit.

    This is how Mackay Laneway House was built and, though it required an extra layer of approvals from the forestry department because of a large on-site tree, getting a building permit was relatively straight forward. I think it took between 6-8 weeks from initial submission.

    As part of the City’s efforts to increase overall housing supply, another form of accessory dwelling unit is currently being studied: garden suites. Public consultations are now underway and, from what I have heard, the hope is to make these similarly as-of-right before the end of the year. Hopefully it’ll be earlier.

    I think this will be a positive thing for Toronto and so I would encourage all of you to complete the online garden suite survey that the City has open until June 1, 2021. Public consultation is an important part of the planning process and too often it is the voices of a few representing the views of many.

    So if you’ve got 5 minutes, now is your chance to speak up.