Ann Eynon loves her new digs. Her small one-and-a-half-storey house is modern, efficient and close to family. In fact, Ann’s grandchildren are no more than six metres away in the “big house” on the other side of the property Ann shares with her daughter and son-in-law.
Ann lives in a laneway house, so called because it sits on an existing residential lot – in this case her daughter’s – and faces a laneway.
Think of a carriage house. They vary in size from 500 to 1,200 square feet depending upon the size of the lot; and close to 500 of them have been built in Vancouver alone. The rest of BC is just catching up.
Laneway houses arrived on the scene four years ago as an innovative solution to the region’s housing crisis. The thinking went something like this: a homeowner would build a small laneway house adjacent to the main house and then rent it out to family or tenants. Homeowners would make extra income and renters would have an affordable place to live.
Pundits thought the concept would appeal to the young and mobile but canny seniors have glommed onto laneway housing as a way to live smartly and cheaply in their retirement years.
“It’s great,” says Ann. “I have my own space and I’m close to the grandkids.”
Ann initially bought a condo for herself while still working, but grew restless after retiring from her financial advisor job in 2008.
“I needed a change in my life,” she says. “I also wanted something new and shiny.”
So, she sold her home of 15 years and sought out Smallworks, one of several Lower Mainland firms that specialize in laneway houses. The company would build her dream home to her specifications, but where to put it? She didn’t own any land but her daughter and son-in-law did. A family conference sealed the deal. Ann would build on the couple’s lot on the understanding she’d have to move if the kids ever sold the property.
She paid $300K for everything – a 1,000-square-foot structure, utility hookups and brand new appliances.
“[Smallworks] did everything for me including taking the plans to Council. I just signed on the bottom line,” she says.
Ann doesn’t own the house – that’s the rub, her kids retain title and will reap the benefits of its resale – but she couldn’t be happier. She’s close to her family, but she’s independent too. Plus, she has enough money left over to travel twice a year.
“It’s lovely to free up the cash rather than sitting on it,” she says while pouring over travel brochures. Where to go next?
–
Patrick and Vivien Clarke took a different tack. They built a 700-square-foot laneway house for their daughter Tania and her husband Scott Riesterer – an “early wedding present” Patrick calls it – after the kids complained about finding accommodation.
“They wanted to stay in Vancouver,” says Patrick, “but couldn’t even afford a starter home. We talked it out. We even talked about switching locations when we’re older. We’d move into the laneway house and they’d move into the larger house.”
Vivien drew up the floor plans with the switch in mind. It’s essentially an open plan with a staircase leading up to the second-storey bedroom and en suite. The builder complied by reinforcing the staircase wall to accommodate a motorized stair lift should the older Clarkes want one in the future.
“We were careful to make sure we were all comfortable with the space in case we have to change places,” says Patrick.
“We love it,” says Tania, sitting on her built-in sofa with husband Scott. Soft music spills out from custom designed ceiling speakers. “It feels like a real house,” she says.
Tania’s parents paid $280,000 to build the structure. Landscaping and custom touches added another $20,000. The kids are paying it back in the form of monthly rent, which includes utilities and their share of the property taxes.
Should they start a family or decide to move elsewhere, Patrick and Vivien can move into the smaller house themselves, rent it out for extra income or sell the entire lot, in which case, Tania and Scott will be reimbursed for their contributions to date.
“We’d get back what we put into this house,” says Tania. “We’re renters but we’re paying it off at the same time.”
–
Colin Lawrence, a mortgage manager at Vancity’s Kitsilano branch, has financed 30 laneway homes in the last four years and he’s seen a lot of seniors, like the Clarkes, enquire about the concept.
“We see it as an important part of affordability,” he says of the laneway idea. Vancity offers a special laneway package for would-be builders but, he warns, it isn’t for everybody. “Pensioners on a fixed income won’t qualify,” he says, “regardless of how much the main house is worth. Equity won’t pay a mortgage.”
A laneway house has to generate income in order to generate a loan.
And another thing Lawrence stresses: create a paper trail. Some families enter into joint ownership; others agree to forgivable loans. Put everything in writing, especially when adult children are involved.
That’s what the Clarke’s did, amortizing their children’s payback over 25 years and clarifying a payout schedule if, or when, the unit changes hands.
In Ann Eynon’s case, she made sure everybody understood her situation before she broke ground. Ann will have her laneway house appraised and then assign percentages of its value to each of her two children.
“So there’s no arguing among my children when I’m gone,” she says.
Seniors thinking about building a laneway house should check with city hall first because municipal zoning regulations will determine what you can and cannot do. And if renting, remember you are a tenant with the same rights and responsibilities as someone living in an apartment – but with the feel of a detached house.
304 views