Laneway housing no silver bullet for Vancouver’s rental housing shortage

A recent CityLab article praised the city of Vancouver effusively for using laneway housing to ease the city’s housing shortage. While the city hall should be lauded for the decision to legalize accessory dwellings, Vancouver has unfortunately taken a very different approach to development of high-rise housing, which has far more potential to increase the number of available housing units. Rather than focusing on one niche source of new housing, city hall could focus more broadly on allowing developers to provide new housing units.

Laneways houses, as the name implies, are tiny self-contained accessory units built onto existing houses, facing into back lanes. They are seen as a way of introducing “soft” density to existing neighbourhoods that can accompany more residents. Since they are small units on under-utilized land, they can be provided much more cheaply than new single-dwelling homes within those neighbourhoods. However, while laneway housing can be a good use of some existing land, it isn’t obvious that they can be a meaningful part of easing Vancouver’s housing shortage.

To put this in context, CityLab claims the city has received 2,000 applications for laneway housing units over the six years since they were legalized. That’s a drop in the bucket for Metro Vancouver, where only 0.8 per cent of rental units in larger buildings sit vacant (the vacancy rate is double in Toronto).

If city hall really wanted to add to the rental housing stock, it could focus on enabling developers to build more density. Five to 10 buildings could easily house the total number of people as the approved laneway housing units. Unfortunately, the city has been less accommodating of such development than one would hope.

A recent study of land-use regulations in the Lower Mainland suggests that Vancouver’s policies and permitting processes are not amenable to new homebuilding. Meanwhile in Burnaby, immediately east of Vancouver, it takes almost five months less for typical housing development projects to receive a greenlight for building from city hall, and costs approximately $20,000 less in compliance fees per new dwelling unit. Further, rezoning land for uses that city planners did not prescribe extends approval timelines by an average of six-and-a-half months in Vancouver; this process tends to take roughly half as long in the suburb of Port Moody.

Laneway housing is one innovative way to increase the housing supply in a market that direly needs it. However, without easing restrictions on higher density dwellings, Vancouver is not likely to see lower housing costs any time soon.