Five years after Seattle allowed separate sales of backyard units, Vancouver still restricts laneway houses to rental-only despite pioneering the housing model in 2009.
-- Vancouver families cannot buy or sell laneway houses separately because city council restricts these backyard units to rental-only, even though Vancouver created North America's first citywide laneway program in 2009 and other cities now allow full ownership. Seattle homebuyers have been purchasing detached accessory dwelling units (DADUs) as standalone properties for five years, California passed a law in 2024 letting cities allow separate ADU sales, and even neighboring Burnaby now permits laneway sales under new rules that started in July 2024, leaving Vancouver behind in the housing innovation it once led.
Interior: Pivot Studio Laneway House
Seattle's ADU reforms took effect on August 8, 2019, allowing detached accessory dwelling units (DADUs) to be sold as separate condominiums. California went even further in 2024, with AB 1033 removing the state-level restriction on selling ADUs, meaning individual cities and counties can now choose to allow homeowners to sell ADUs as standalone properties. Even Vancouver's neighboring suburb Burnaby has leapfrogged ahead, allowing lane-facing dwelling units to be sold separately as stratified units under their new multiplex regulations that took effect in July 2024.
Meanwhile, Vancouver families continue to be restricted to rental-only laneway houses, despite the city's early leadership in laneway housing.
Hundreds of Permits Per Week in California
The scale of success elsewhere shows what Vancouver might be missing. In California, where similar backyard units can now be sold independently, "they're getting hundreds of permits per week," says Jake Fry, founding partner of Smallworks. "Down in California, it represents the biggest piece of the spectrum in their whole construction industry."
San Jose opted into AB 1033 in June 2024, with the bill taking effect July 18th, 2024, and Santa Monica opted into AB 1033 in early 2025, allowing ADUs to be separately sold or conveyed as condominiums. The California model demonstrates that allowing separate ownership doesn't diminish neighborhood character, instead it expands affordable homeownership opportunities.
In Seattle, ADU permits have increased by 60% since 2019, demonstrating strong market demand. Seattle, Kirkland, Burien, Tacoma, and Bellingham all allow investors to "condoize" a single family lot. What that means is that without splitting the lot into multiple parcels, you can sell units on the same lot separately.
This ownership flexibility has created what one Seattle developer calls "a game changer" in residential development, allowing up to three separate units on a single family zoned lot.
How Seattle Makes It Work
Most existing lots with a DADU in Seattle are too small to be subdivided under the city's land-use code. However, while the city may restrict ownership of that lot to one entity, if that entity is a condo association the DADU and the primary residence can be owned separately and sold separately.
Seattle has proven this works with streamlined permitting. Created by local designers and architects, pre-approved building plans offer a faster, easier, and more predictable permitting process for creating a DADU. In most cases, permits can be obtained in just 2-6 weeks.
The timeline benefits are significant. "Good news is these projects can be designed and built within a year... It's not a big ask. It's a meaningful ask in the sense of what the outcome would be," Fry explains.
Burnaby Moves Ahead with Comprehensive Reform
Burnaby's approach shows how comprehensive policy reform can work. Under their new Small-Scale Multi-Unit Housing regulations, lots in the R1 SSMUH District with two or more primary dwelling units are eligible for stratification. The city allows multiple laneway-like units, semi-detached (duplex) lane-facing homes, and rear buildings similar to a laneway with secondary suites.
The Burnaby system is more permissive than Vancouver's planned approach. While Vancouver is only exploring subdivision of existing laneway houses, Burnaby's new multiplex regulations also permit more diverse housing types to be built at the rear of a lot.
"This is a Hack Against Speculation"
The benefits of allowing laneway house sales extend beyond individual homeowners. "This is a hack against speculation... We're cutting out all the middlemen. And we're cutting out all those aspects of house development that allow land speculators to hold land and profit," Fry explains.
Unlike typical development that involves buying expensive land and adding profit margins, laneway subdivision works with existing homeowners who already own their land. "They're not making a profit margin on newly acquired land. They're basically utilizing land that they already own with a price point close to which they paid for it, maybe decades before."
This approach particularly helps what Fry calls "citizen developers"—regular homeowners rather than big development companies. The model allows aging homeowners who are "overhoused" to realize value from unused land without having to sell and move to a different neighborhood.
Breaking Down Barriers to Homeownership
The ownership model creates new pathways into Vancouver's housing market, currently one of the most expensive in the world. Instead of needing hundreds of thousands of dollars for a down payment on a detached house, families could potentially purchase a laneway house for significantly less while still building equity.
Understanding the full financial picture from laneway house construction expenses to potential purchase prices is crucial for both current homeowners considering building and prospective buyers evaluating their options.
This matters particularly for generation Z, young families, recent immigrants, and others priced out of traditional single family homeownership. A laneway house purchase in Vancouver could serve as a stepping stone, allowing buyers to build equity and eventually move up to larger properties.
The laneway house restriction currently in place means all the equity creation benefits flow only to existing homeowners who can afford to build laneway houses. Allowing sales would distribute those benefits more broadly to Vancouver residents and across income levels.
"Easy Peasy" Construction, Regulatory Delays
The technical challenges aren't the barrier to implementing these ownership models. "The challenges are really basic... Easy peasy. We've been building this type of housing for a century," Fry notes. "Logistically, it's not a challenge. Not a meaningful challenge. Really, what we're just talking about is enablement."
While Vancouver council studies the subdivision question, families in other cities are already building equity through laneway house ownership. "It's just simple... take down your garage, put in a home," Fry says, describing the basic process that's become routine elsewhere.
The contrast is stark: while Vancouver debates policy details, Seattle homebuyers scroll through MLS listings featuring backyard cottages. For buyers, it provides more affordable entry points into homeownership.
Vancouver's Next Steps
Vancouver's proposed policy change would finally harmonize laneway rules with the city's newer multiplex regulations, giving homeowners similar flexibility to what Burnaby and Seattle residents already enjoy. The question isn't whether the policy makes sense—other cities have proven it works—but when Vancouver will catch up to the housing innovation it once led.
"This is a really elegant, simple solution that has a meaningful impact," Fry says. As Seattle families buy their backyard DADU cottages and California homeowners explore new ADU ownership options, Vancouver families wait for their city to unlock the same opportunities with laneway homes.
As the city that pioneered laneway housing in North America, Vancouver now trails behind its neighbors in giving residents full ownership rights over these innovative housing solutions. While Vancouver deliberates, other cities are already building the more affordable, accessible housing future that laneway house ownership enables.
About the company: Smallworks is a Vancouver-based design-build firm with 20 years of experience in gentle density and rightsizing. With over 400 infill homes built across Metro Vancouver by an in-house design and construction team, Smallworks leads the middle housing movement by creating small-scale, functional, sustainable, and attainable housing that speaks to each homeowner's unique lifestyle and needs. Founded in 2005 by Jake Fry, Smallworks began as a trailblazer in laneway housing, working with the City of Vancouver to develop zoning laws. From a 600 ft2 laneway house to a six-unit multiplex, today, Smallworks encourages homeowners to reimagine their properties not as fixed entities but as evolving opportunities.
Contact Info:
Name: Kent Macwilliam
Email: Send Email
Organization: Smallworks Ltd.
Address: 1639 W 2nd Ave #220, Vancouver, BC, V6J 1H3, Canada
Phone: +1 604-264-8837
Website: https://smallworks.ca
Video URL: https://www.youtube.com/watch?v=Dxkp2DMIYdQ
Release ID: 89167725
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