Introduction
With housing affordability becoming a major issue in Toronto and Scarborough, homeowners are looking for ways to increase property value and generate rental income. Two popular options are garden suites and laneway suites—both secondary dwelling units (SDUs) that provide extra living space in residential backyards.
But which one is better for your property? In this guide, we’ll compare garden suites vs. laneway suites, covering costs, zoning regulations, benefits, and investment potential, to help you decide the best option for your needs.
What Is a Garden Suite?
A garden suite is a detached housing unit built in the backyard of a residential property. It is separate from the main house but shares the same lot. These units are ideal for:
✔ Rental income – Earn money by renting it out
✔ Multi-generational living – Provide space for family members
✔ Affordable housing solution – Cost-effective compared to buying a new home
Key Features of Garden Suites
✅ Located in the backyard of a main house
✅ Accessible from the side or rear yard
✅ Suitable for detached, semi-detached, or townhomes
✅ Requires city permits and utility connections
What Is a Laneway Suite?
A laneway suite is a secondary home built on the laneway portion of a property. It functions like a backyard home but is located adjacent to a public laneway.
Key Features of Laneway Suites
✅ Built on lots with access to public laneways
✅ Similar to garden suites but requires laneway-facing access
✅ Shares utilities with the main house
✅ Can be used for rental income or extended family living
Key Differences: Garden Suite vs. Laneway Suite
| Feature | Garden Suite | Laneway Suite |
|---|---|---|
| Location | Backyard | Laneway-facing area |
| Access | Side yard or rear | Direct from laneway |
| Lot Requirement | Any residential lot | Must have a laneway |
| Construction Cost | $150K – $250K | $175K – $300K |
| Zoning Restrictions | Fewer restrictions | Requires laneway access |
| Rental Potential | High | High |
| Permits Needed | Yes | Yes |
Pros and Cons of Garden Suites
✅ Pros
✔ More location flexibility – Can be built on any residential lot
✔ Lower costs compared to laneway suites
✔ Ideal for rental income or family use
❌ Cons
❌ Backyard space required – Small lots may not qualify
❌ Zoning restrictions vary – Permits may take time
Pros and Cons of Laneway Suites
✅ Pros
✔ Great for urban properties with laneway access
✔ Can increase property value significantly
✔ Rental demand is high in urban areas
❌ Cons
❌ Only allowed on properties with a public laneway
❌ Higher construction costs due to laneway infrastructure requirements
Costs: Which Option Is More Affordable?
Both garden suites and laneway suites require permits, construction, and utility hookups. However, laneway suites tend to be more expensive due to infrastructure upgrades required for laneway access.
Estimated Costs
| Expense | Garden Suite | Laneway Suite |
|---|---|---|
| Permits & Fees | $10K – $30K | $15K – $40K |
| Construction | $120K – $200K | $150K – $250K |
| Utility Hookups | $10K – $25K | $15K – $30K |
| Total Estimated Cost | $150K – $250K | $175K – $300K |
While both options provide strong investment returns, garden suites offer a more cost-effective solution.
Zoning & Permits: What Are the Requirements?
Garden Suite Zoning Rules in Toronto & Scarborough
- Allowed in most residential zones
- Height limit: 1-2 stories (varies by area)
- Minimum setback requirements from the main house
- Must comply with fire safety regulations
Laneway Suite Zoning Rules
- Allowed only on properties with public laneway access
- Height limit: Typically 2 stories
- Requires dedicated emergency access routes
- Must connect to the main house’s utilities
Zoning Tip: If your property does not have a public laneway, a garden suite is the better option.
Which Is the Better Investment?
If you want to maximize rental income, both options provide excellent ROI. However, the best choice depends on your property.
✔ Choose a garden suite if:
- Your lot does not have a laneway
- You want lower construction costs
- You prefer more flexibility in design
✔ Choose a laneway suite if:
- Your property has laneway access
- You want strong long-term appreciation
- You can handle higher initial investment costs
Conclusion: Which One Should You Build?
For most homeowners in Scarborough and Toronto, a garden suite is the better option because:
✅ Lower costs and fewer zoning restrictions
✅ Easier permit approval process
✅ More location flexibility
However, if your property has laneway access, a laneway suite can also be a great investment.
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