Twenty years ago, Jake Fry started Smallworks to advocate for laneway houses in Vancouver to solve the housing shortage and sparked a housing revolution across North America. Today, California approves hundreds of accessory dwellings every week, inspired by Vancouver’s laneway houses, and this represents around 20% of the state’s construction of residential units according to the Centre for California Real Estate.
Smallworks introduced laneway houses to North America in 2009. Vancouver became the first city on the continent to allow them citywide. Today, this is a mainstream solution to the “missing middle housing crisis”, the lack of affordable family homes between apartments and single-family houses.
“We’ve been advocating for this for 20 years. It’s now our 16th year of a very successful program,” said Fry. “Vancouver was the first city in North America to do this citywide. It was so successful that it spread to Washington, Seattle, Portland, and all of California.”
Little Green Garden House, completed in May 2024 courtesy of Smallworks
Canada’s Family Housing Problem
Canada’s real estate market has cooled, especially for small condos. But families still want larger, ground-level homes in quiet neighbourhoods. Laneway houses provide exactly this.
“We have a big need for family housing,” Fry said. “Most West Coast cities are only 120 years old. People used to move from starter homes to bigger homes, then downsize. Someone always filled the gap behind them. With today’s high land prices, we can’t do that anymore.”
This breakdown created a “huge schism” in the market, where families looking for a ground-level home have limited options.
From Rental-Only to Ownership
Laneway houses started as rental-only units to solve Vancouver’s housing shortage. The program has since expanded to include ownership through separate titles, especially for heritage homes.
“As the housing crisis grew across North America, independent ownership became very important,” Fry explained. Vancouver City Council recently asked staff to study allowing separate ownership of laneway houses. This would place the older laneway rules in harmony with the city’s newer multiplex program.
Spreading Across the Continent
The laneway house model spread remarkably fast. What started as a Vancouver solution to urban density has been adopted across major U.S. cities. California leads the way. The state’s Accessory Dwelling Units (ADUs), which are small homes on existing properties and now represent one of the biggest parts of California’s home construction.
“They’re getting hundreds of permits per week and it’s been like that for years. It’s really taken off,” Fry noted. “It’s such an easy concept: take down your garage, put in a home.”
Solving the Missing Middle Crisis
Laneway houses address what experts call the “missing middle housing crisis”, the lack of affordable family homes between single-family houses and high-density apartments. Fry’s solution uses “citizen developers.” These are homeowners who have the opportunity to build additional housing units on their properties.
“If we replace single house development with multiplex development, we’d have almost 15,000 new units per year. These would be affordable for families, where right now it’s not attainable at all,” Fry said.
The policy shift toward subdivision represents what Fry calls “a hack against speculation.” Homeowners develop their existing properties instead of developers who profit from land speculation. This provides housing while cutting out profit margins that drive up costs.
Meeting Family Housing Demand
The laneway model addresses strong demand for family homes in established neighbourhoods – a market that stays strong even as Canada’s real estate market adjusts. Unlike high-density condos, which are commonly one-bedroom and impact neighbourhood character, laneway houses fit seamlessly into single-family areas. They offer ground-level living with front doors that families want.
“The beautiful outcome is more housing in the community for people who want to live in a ground-oriented home,” Fry explained. “We’re getting neighbourhoods repopulated back to where they were in the 70’s.”
A Complete Housing System
Vancouver’s latest policy review aims to connect laneway houses with the city’s 2-year-old multiplex program. This would give homeowners flexible options: build and rent laneway houses, build and sell them, or redevelop entire properties into multiple owned units.
“Suddenly there are options for homeowners who we call ‘citizen developers’,” Fry explained. “These people now have meaningful choices that work with their financial needs and family needs.”
The model also helps aging homeowners who are “overhoused” but can’t move due to limited options. By changing their properties to generate income while creating housing for others, laneway houses are a housing solution for people of all ages.
Looking Ahead
As Vancouver considers expanding laneway subdivision and municipalities across the province adopt multiplex and laneway programs, the model continues proving effective across North America. Cities like Toronto and the entire state of Connecticut have recently legalized this type of housing. The main challenges aren’t technical but systemic: creating financing tools, standardizing designs, and educating homeowners and banks about opportunities.
“We’ve been building this type of housing for a century,” Fry emphasized. “Logistically, it’s not a challenge. We’re just talking about giving people the tools to do this.”
With twenty years of advocacy behind them, Smallworks’ laneway house innovation shows how one small Canadian company’s vision can reshape how the industry approaches urban housing challenges. This is especially true for providing family-friendly, ground-oriented housing that remains in high demand across Canadian markets.