I've got a couple friends who own houses in the city that have little garages at the backs of them bordering on the laneways that they use to store motorbikes, build mini ramps in... all fun stuff but I've always thought that if I had a house with one of those I'd turn it into a tiny little cottage type of thing and rent it out to help cover my mortgage. I had no idea that doing that was actually illegal up until a few days ago, but today it's not...
You might have heard about this already but city council recently approved amendments to single family zoning to allow laneway housing. What this means is that by March 2009 there should hopefully be a bunch of small suites dotting the alleyways, creating more affordable rentals for folks like you and me within the city limits.
's all the official documentation about it.