1. What is a Laneway House?

A Laneway house is a small residence that faces the back lane of a residential lot. The primary uses for this property are either as a rental property or family use. These cannot be strata titled and have been approved in Vancouver in RS-1 and RS-5 zoning areas. If you are unsure about what zoning your property is in, please give us a call.

2. Why should I consider this as an extra income opportunity?

People throughout Vancouver have always looked for ways to maximize the investments in their homes. One very common way has been to remodel their basements into a rental unit. This has opened the doors for many people to add additional income to their financial situations. Laneway housing is an excellent opportunity to further create additional rental income for you. If you decide to finance the construction with a loan on your primary residence and rent out the Laneway house, you also qualify for tax deductions on the mortgage interest.

3. What are the advantages of working with Sky Projects VS. Just doing this on my own?

At Sky Projects, first and foremost you are working with a team that has years of experience in construction and project management. We will take care of the entire process to include: site evaluation, helping you with financing, procuring the permits, construction, project management, help you with resources to rent your new Laneway house, and a maintenance program thereafter. We do not build anything else, this is all we do and we strive to be the best with superior customer satisfaction. While building a small house to some people might think it is easy, it is a difficult and costly road that at many opportunities can result in expensive delays and mistakes for those who are inexperienced.

4. What type of rental income ranges are people charging for similar units?

This really depends on the area but monthly rents ranging from $950.00 to $1,800.00 are common. For others who might be interested in a more hands on approach and rent their Laneway house furnished on a weekly basis could achieve weekly rents in the $600.00 to $800.00 range. We have professionals in our network who can help you with this if you like.

5. I like the ideas of extra income but if I get a loan to do this what will be my bottom line of extra income after all my expenses?

We are happy to sit down with you and discuss this in detail. In general we have found that our client have been able to enjoy a healthy net income after their expenses.

6. Is there a warranty?

Yes. Every home constructed has a comprehensive warranty for your peace of mind. In addition we include 12 months of building maintenance after the home is done that will ensure everything works like it should.

7. I don’t think I can qualify at a bank for a loan to do this, what are some other financing options that you have available?

Besides a strong background in Construction, our team has years of experience in helping people procure financing that is right for them. We have many resources that will work with you to find a financing solution that is right for you.

8. Will I be able to customize your plans more specifically to what I like?

Our objective in this business is to help homeowners maximize their investment return with Laneway house rentals. In doing this we have created plans that we believe achieve this on many levels. Those levels include: aesthetics, functionality, appeal, construction method, material selection, engineering, etc. In light of this we can provide the best product over and over again because there is no variance. We know our costs, our timelines, and our process inside and out. This way we can consistently deliver a home you will be proud to have on your property as well as tenants that cannot wait to rent it, again and again.

9. What if I just want Sky Projects Ltd. to help me on a few parts of the process to build a Laneway Home but not the whole thing?

While we feel it is a privilege to help anyone who seeks our services, it is our choice only to work with individuals who will let us work through our entire process. This way we know everything that was done was to our standard.

11. My neighbors said that they are interested as well, are there incentives for a group of homes to do this at once?

Absolutely! If we can build Laneway houses in the same area it cuts down on our mobilization and we are pleased to pass along the savings to each of you.

12. Will this increase the value of my home?

As Laneway houses are brand new to Vancouver time will tell as to how much a Laneway house will add to your overall properties value. Looking at Carriage Houses that have been built in select areas of Vancouver I think it would be safe to say that besides the rental income being enjoyed, upon re-sale of the property, the interest of other buyers in your property will be much greater than without a Laneway house.

13. How will having the income from a rental Laneway House benefit me in the long term?

Especially when financed from your personal residence and you are able to deduct the mortgage interest, the advantages of having extra income are numerous. Many people want to use the extra income to pay down their mortgage faster, college tuition for the kids, a vehicle to help fund retirement, the list goes on!

14. Will this increase my property taxes?

Yes, as you are making improvements to your property, it will be reflected in your property tax bill. Please contact the City to discuss with them estimates.

15. I really just want the extra income without all the work; tell me again how you can make this as easy as possible for me?

We would love to! Please contact us for a no obligation meeting to find out exactly how we can help you.

16. Can you just send or e‐mail me more information?

We try to keep things simple and have found that the best next step if you are interested is just to give us a call. We are looking forward to talking with you and working through a process to educate you so you can make the best informed decision.

17. Why Build a Laneway House?

So you’ve owned your house for a while and have enjoyed your garden and yard, perhaps with a garage for parking shiny vehicles, and a space that may be at times a workshop or extra storage. But so much more is possible…
Spurred on by a citizen initiative as part of the overall Eco density strategy, it is now possible to build a completely new and separate residence (with its own address and mailbox) on that part of your existing lot. And you save the hassle and expense of purchasing additional land, transfer fees and other related expenses.

There really are so many great reasons to build a Lane or Coach House:

  • Extra income and immediate cash flow from short or long term rentals
  • You want your children to live in the city
  • A retirement residence for yourself
  • Enhancement of city laneways
  • Sustainable development and preservation of existing neighbourhoods
  • Office or small business space, subject to zoning rules
  • Bookending of your main house to give it that “estate feel”

Before Building a Laneway House Consider the Following:

Zoning Bylaws: Do you qualify for a laneway house?
Minimally, your property must be zoned RS-1 or RS-5, and be at least 10 meters (32.8 feet) wide. If your property is in another zone (like RT-10) it may qualify for an “infill house” which is often allowed to be built much larger than a laneway house.
You can check out your property details on the City of Vancouver’s Van Map.
The setbacks from the lane and side yards vary depending on the zoning, so it’s worthwhile giving us a call or sending us an email to find out more.

Building a Laneway House is one way people can get a great home in the city, that they’d otherwise have to move much further away to afford. They are also a smart investment from a purely business sense. Consider a well-appointed customized laneway house that costs $180,000.00 -$250,000.00 to build: With minimal down payment, current costs to finance are usually in the range of $800 – $1,000 per month. Depending on your location in the city, you would easily be able to rent it out for $1400 – $2,300 per month, and even more if it is furnished. If your tenant is a family member, you get the triple benefit of being close to family, having a true sense of privacy and enjoying a cash positive position.

18. Cost & Return on a Laneway House

Sample Laneway House scenario for: Construction / Financing / Rental

Construction price for: 33’ Wide Lot – 1br. / 1 bath. + Carport $169,000.00
HST (12%) (prices may vary depending on requirements) $20,280.00
TOTAL $189,280.00





The construction price includes:

  • Site survey
  • Our pre-approved plan design including engineering and architectural work
  • Building Permit
  • Demolition of existing structure
  • All services and costs
  • Construction of the Laneway Home
  • Our standard 2/5/10 Warranty
  • One year of maintenance as per agreement

This package is for a lot after we have inspected to make sure things can be carried out as a typical construction project. If we encounter a lot with difficulties, we will give you an estimate and perform the extra work on a cost + basis over the fixed price for the home.


Loan Amount – 4.39% with a 35 year amortization 189,280.00
Monthly Payment 878.32
*NOTE – Mortgage interest is 100% tax deductible when primary residence is used and proceeds are used to build a rental Laneway House. First year mortgage interest is $8,400.00. Depending on your tax bracket this could be up to $3,361.87 in tax savings. Please consult your Accountant.


HST Rebate 8,400.00
HST Rebate after Laneway House is rented with 1 year lease.
(Please consult your accountant to verify if you qualify)


Estimated monthly rent 1,300.00
3% Vacancy -39.00
5% Maintenance -65.00
5% Est. Property Tax -65.00
Net Operating Income 1,131.00
Mortgage Payment -878.32
Positive Monthly Cash flow 305.77



Annual positive cash flow after expenses 3,669.24
Potential Tax Savings 3,361.87
Total annual potential positive cash flow 7,031.11

(Please verify all above information, this is an example only)


Financing Your Project: Can you afford it? How will you pay for it?
With total project costs for an entry level laneway house on a 33 foot lot starting from approximately $180,000 + taxes you’ll want to consider financing through your own bank or through a special laneway financing program offered by several lending institutions.


What We Do

We recognize that most people who want to have additional rental income to their bottom line want the result, but do not have the expertise to get there. Laneway housing is an excellent opportunity to consider doing just this. Municipalities across the lower mainland and especially Greater Vancouver are allowing Single Family Residential properties to take advantage of the space located by your rear lane to build a Laneway House. While there are a number of uses for doing this to consider such as: a home office, guest house, studio, a place for your family to stay (aging parents / family), or even to move into a smaller house and rent out your larger home …. Our focus is maximizing the use as a rental unit.

In order to do this we have a service that:

  • Completes a site analysis for the most effective and cost effective development plan to construct a Laneway house.
  • A streamlined fast track process to negotiate the permitting process.
  • We have pre‐engineered building plans that are designed to:
    • Maximize a small floor plan for tenant living enjoyment
    • Long term durability
    • Construction efficiency to reduce wasted material and reduce building time
  • We work with a professional construction team that takes extreme pride in producing quality Laneway Homes on time and on budget.
  • We project manage the entire process giving you weekly updates as to the progress.
  • We help you get setup with everything you will need to be a landlord and maximize your new rental Laneway house.
19. Things to consider

It’s important to understand that not all lots in Vancouver are eligible for laneways. There are certain requirements such as, zoning, lot size, fire access, lane access, and a minimum separation between dwellings, that will be taken into consideration.

Cities: Vancouver, North Vancouver City, Richmond

Zoning: RS-1 and RS-5 are the only zones currently eligible for laneways. However, there are other zones in the process of being amended by the City. See New Amendments for more details.

Approved LWHs in RS-1 and RS-5 Zones and current LWHs as of Feb 2013

Approved LWHs in RS-1 and RS-5 Zones and current LWHs as of Feb 2013

Size: Your frontage lot size must be a minimum of 32.8 feet wide. Permission to build a laneway house on a narrower lot may be granted by the Board of Variance.

Lane access: In order to construct a laneway home, your existing property must have access to a back lane; be located on a corner served by an open or dedicated lane; or be located on a double fronting site served by a street on both the front and rear.

Minimum build separation: Your lot must be deep enough to allow for both a laneway house, which may extend up to 26 feet inward from the rear property line. The minimum building separation must be 16 feet between your main home and the proposed laneway home.

Fire Access: A fire access of at least 3 feet wide must be provided along the side of the main house running from the front yard all the way back to the laneway.

Backyard Open Space: A 1.5 storey laneway house is limited to the rear 7.9m (26ft) of the lot to minimize impacts on neighbouring yards. Where a 1 storey laneway house is proposed, it may extend a further 1.8m (6ft) to a maximum of 9.8m (32ft).

Side yard Set Backs: The laneway house is subject to the same side yard setbacks as the main house or a minimum of 10% of the lot width if the laneway house is 1 storey.

For a 1 storey laneway house, the side yard setback on one side may be reduced to a minimum of .6m (2ft) to help achieve the permitted floor area at grade. These setbacks do not apply to surface parking.

Setback from Lane: The laneway house must be set back from the lane a minimum of .9m (3ft), and more where possible. Entries facing the lane should be setback a minimum of 1.5m (5ft) to allow safe access.

Size & Height: The maximum area for laneway is determined by multiplying the lot area by .16. This results in maximum unit sizes of approximately 56m2 (644ft2) on standard 33′ x 122′ lots, and 84m2 (900ft2) on 50′ x 122′ lots. The maximum size of a laneway house is 900ft2, regardless of lot size.

A 1 storey laneway house is limited to the same maximum height as a garage, which ranges from 3.7m (12ft) if a flat roof or to 4.6m (15ft) for a sloped roof.

Parking: A minimum of one unenclosed and uncovered parking space must be provided on site adjacent the laneway house for both one and 1 and 1.5 storey laneway houses.

New Amendments: As of June 11th 2013, the City of Vancouver proposed an amendment program for LWHs expansion and regulation. The goal of the new expansion program is to address key issues that have been identified through the monitoring of LWH development and key demographic research. The proposed amendments address impacts on neighbouring properties, provisions of parking, livability of the units, new zoning allowance, and length of the permitting process.

More specifically:

  1. Encouraging the development of more one storey LWHs; seen to have fewer impact in terms of height and massing on neighbouring sites, are less expensive to build, and would provide improved access for those with mobility challenges.
  2. Requiring one external permeable parking space to support the provision of on-site parking.
  3. Providing more floor area for living and storage space.
  4. Streamlining the permitting process by allowing an outright review process for one storey LWH.
  5. Increasing expansion of LWH programs to other RS zones, which includes: RS-1A, RS-1B, RS-2, RS-3, RS-4, RS-6, and RS-7.
New RS Zones for Expansion of LWHs in Vancouver

New RS Zones for Expansion of LWHs in Vancouver

20. What does the New Home 2/5/10 year warranty cover?

Two years Materials & Labour Warranty

  • First twelve months – coverage for any defect in materials and labour
  • First fifteen months – coverage for any defects in materials and labour in the common property of a multi-unit building.
  • First 24 months – coverage for any defect in materials and labour supplied for the electrical, plumbing, heating, ventilation and air conditioning delivery systems.

Five years Building Envelope Warranty

Ten Years Structural Defects Warranty

21. Do all New Home Builders provide warranty coverage?

Only builders approved by the Home Protection Office and deemed a Licensed Residential Builder can apply for warranty coverage. Once the builder is deemed a Licensed Residential Builder he/she must apply for third party insurance coverage, such as Pacific Home Warranty.

Not all builders are approved for coverage with HPO or Pacific Home Warranty. Both Agencies conduct extensive screening for approval. Pacific Home Warranty reviews each applicants business history, technical expertise, financial capacity and after sales customer service. Each year the Licensed Residential Builder must reapply with both HPO and Pacific Home Warranty.