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Benefits of Backyard Homes

Updated: Feb 21, 2021

A backyard home is a smaller, detached residence built on your residentially zoned property. They are a lot more than just a new form of housing because they offer numerous benefits that impact not just homeowners and renters but the city as a whole. Toronto is one of many urban areas facing a housing crisis and backyard homes are one of the most popular solutions which is why the City of Toronto is supporting them with fee deferrals and other financing programs.


1. Increased Property Value and Income


The amount of millennials opting to live at home has soared within the past century and backyard homes are becoming a more flexible and affordable option. By creating an additional home in your backyard you are increasing your property’s versatility. If you choose to rent your backyard home, you can generate passive monthly income that can help to pay your mortgage or secure your retirement. Creating an affordable housing option in your neighbourhood enables someone who may work in the area to live closer to work. The value of a property can increase because the quality of the backyard unit, when compounded with time, adds to your property appreciation. This addition to home equity can impact the resale price.


2. Intensification of established neighbourhoods


Backyard homes increase the supply of rental housing when located in neighbourhoods with pre-established connections to transit, groceries, bike paths and green spaces. Intensification can also impact transit, infrastructure, and other developments due to the growth in demand giving residents the option to live near more jobs and services.


3. Co-habitation and Multi-generational living


While backyard homes do require initial funding from the homeowner, it costs a lot less than purchasing a condo in Toronto for the same returns while providing more privacy than renting the basement. A unit may begin as an extra space for visiting guests and soon after turn into your designated office or workshop space separate from the main house. Backyard homes provide a unique benefit of keeping family close while giving household members the independence and privacy that they need. They offer solutions to common family issues such as sharing a bathroom, a cramped kitchen, or sleeping on the couch. Allowing a loved one to live in your backyard unit can allow them to build a stronger financial foundation for their lives. Alternatively, you may decide to care for your aging parents then later downsize yourself and rent out the main home.


4. Maintenance of Neighbourhood Vernacular


Ordinarily, providing more housing in a neighbourhood while trying to maintain the character can be a challenge. These units give property owners the opportunity to control development by matching the existing ‘feel’ of their home.


5. Increased Safety


Providing housing in backyards or laneways (alleys) can increase safety as the increased activity provides an extra set of eyes. The presence of new residents also calls for proper lighting infrastructure which can increase safety.



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