Vancouver is taking a backyard approach in its plans to densify by becoming the first North American city to allow laneway housing.

In the city proper where there is no land left for Vancouver to expand, the western Canada city took the unprecedented step to allow a secondary dwelling at the rear of local properties -- about 60,000 single-family lots are eligible -- to create more affordable housing.

At the debut of the first lane house, or carriage houses as they are sometimes called, on Sunday, hundreds of curious locals came out to take a look at a 710-square-foot dwelling at the back of a standard 33-foot frontage lot in the city's East side.

The two-story structure, built on the site of a demolished car garage, features one bedroom, a "flex room," a bathroom and laundry room on the ground floor. The kitchen and living space is upstairs. There is also plenty of storage space built into every nook and cranny -- under the stairs, under the floor -- to help avoid clutter.

Bryn Davidson of Lanefab, who with partner Matt Turner built the house for property owners Agnes and Manual Mendoza, said such a structure cost about 190,000 to 230,000 Canadian dollars to construct. The price seems a deal considering the Real Estate Board of Greater of Vancouver reported in March that the median price for a home in East Vancouver was 734,300 Canadian dollars.

On the west side of the city, the average price of a detached house is 1.6 million dollars, a 30 percent increase in the past year.