In terms of green features, the Mendoza's stylish lane house features an abundance of windows to make the most of the natural light, earth-tone stucco and local wood for the finish. The walls are much thicker than typical buildings for insulation, while the windows are triple-glazed.

The house is also equipped with a "whole house energy meter" to see in real time how much energy is being consumed.

"We will also often wire in a location for a video projector so you can have a hidden projector versus a large television screen as part of your living space," Davidson said.

While the reception of the lane houses has largely been positive, there has been opposition with critics saying the structures will change the character of a neighborhood and lead to increased parking on the streets. In addition, some of Vancouver's laneways are in poor shape.

"Some lots are great and really open up a new way to live on that site," Davidson said. "Other lots have much more challenging lanes in terms they are not quite as friendly. In this case we have to design the building in a way that more like a courtyard and improving the yard space."

He adds about one-third of lane houses are being built as revenue properties, while another third were used for extended families. The other third is for owners who want live in the properties themselves and then rent out the main house.

"In those situations we're designing it to be the primary residence so they are willing to invest a little bit more in the building and green energy systems. We can create something very interesting and functional."