We are living through revolutionary times. The 2020 pandemic has unveiled inequity rooted in every system of our society. Colonialism. Racism. The diverging gap between rich and poor. All. Of. It.
Each of us, in our own corner of the world has the obligation to reflect, reimagine and help rebuild the framework for what is to become our new normal post-pandemic.
I design houses for a living in Toronto, and have been digging deep to question the default systems I work in. Who do I actually serve with my work? Who gets to own land in the city and who doesn’t? Why the polarity of tenant vs landlord? Who benefits from this inequity? How can we redistribute housing wealth? How do we build communities where everyone belongs?
I’m starting today by challenging how we think of home ownership— through the lens of laneway housing in Toronto. Here goes.
When Toronto passed a laneway housing by-law in 2018 it was touted as an affordable alternative in established neighbourhoods, well serviced by transit, social and commercial infrastructure, schools and parks. Sounds ideal, right? In reality, laneway suite projects are bespoke luxury builds attainable by very few. The design and construction costs are high, and the primary goal is to get a return on investment as quick as possible. This can take ten to fifteen years, and the rental income needed to get there is unequivocally outside of ‘affordable rent’ limits for most of the population. You must currently be a “have” rather than a “have not” to even own land in Toronto, let alone enough capital to develop land even further. For the traditional tenancy arrangement, you can’t rent out your suite for less than it costs you. Can you?
What if there was a way for the housing secure to tip the balance towards equity for the housing insecure in Toronto? To do it, we need to break out of the own-build-rent-repeat. I propose an alternate vision to laneway suite development that I call the Laneway Lease Network.
How it Works
There are four components of the network:
The land sharer (formerly known as land owner) offers up the laneway portion of their land for lease to develop a laneway house on. They are matched with a potential leasee based on size and configuration of the lot. For no investment other than sharing the land, they receive a small monthly lease income, and have the future benefit of accruing property value.
The leasee, a former renter accesses a construction mortgage to build the laneway house with the support of the City of Toronto, lives in the laneway house and builds equity in the lease over the next 5-15 years. They own the house they’ve built, and can be lifted out of the rental cycle.
The lender, a bank or social enterprise lends the money to the leasee to build the house which gets paid back with interest.
The City of Toronto assesses potential leasees and guarantees the mortgage under its housing affordability program.
The Precedent: The Toronto Islands Trust
The Toronto Islands Trust works in a similar way at a larger scale. The City of Toronto owns the lands of the islands, and offered up a 99-year lease on the lots in 1994. The residents buy a one-time lease, then purchase the house itself. The values of the homes are between 100K-450K and only rise with inflation. When houses trade hands, it’s with a lottery to access the buying of lease when any property gets offered up. There are no windfall profits. The trust controls the buying and selling, helps maintain the infrastructure of the islands, and runs the lottery. Homes are owned by the resident while the City of Toronto owns the land. It’s a long-term land share at a large scale. Learn more about it here.
The Laneway Lease Network uses this model at a smaller, single property scale with a shorter lease of 15 years, ideally supported by the city’s affordability housing plan.
Is this a tenable arrangement for every land owner who wants to build a laneway suite? No. This is closer to co-housing or a social enterprise, so you have to be an outside the box thinker and believe in investing in your community. The Laneway Leasing Network is geared towards those who have land capital and want to contribute to re-balance housing security, house by house, neighbourhood by neighbourhood. Those who want to build longer tables instead of higher fences. Are you one of them?
From Inspiration to Action
To explore the benefits and challenges of the Laneway Leasing Network, I need your help getting a pilot project off the ground. If this idea speaks to you as a land sharer, potential leasee or as a lender/investor, please fill out the form below to join in the discussion. There is a FAQ page to learn more, click here. Get in touch by filling out the form below. Your feedback will shape the pilot project. ~Deborah Mesher, M.Arch BCIN