The city of Vancouver is moving ahead with a plan to allow 100 homeowners to convert their back-alley garages into laneway housing.

The plan, approved Thursday night with the unanimous support of civic council, is one of the key parts of the municipality's controversial eco-density charter adopted in June to increase the number of people living in the city in an environmentally sustainable manner.

Many people can see how having a living space in their garage will work in a city with little affordable rental space, Coun. Suzanne Anton said.

"Our kids are starting to leave the house. We could put ourselves in a little cottage, put our kids and grandkids one day in the house," she said.

"Elderly people might be able to put help in the little laneway house, letting them stay at home for many more years, if they have help."

The average cost of a conversion is expected to be around $150,000, but owners will only be able to rent and not sell the laneway homes.

Before any of the alley homes go ahead, there will be public hearings on a neighbourhood by neighbourhood basis, and only homes already zoned single-family will qualify for the pilot project.

That means the first laneway house won't be built for about a year, Anton said.

Gordon Price, a former Vancouver councillor and the director of the City Program, an urban-issues centre at Simon Fraser University, said the plan can work because Vancouver is rare among North American cities as it was laid out with back lanes by planners more than 100 years ago.

"They are really a product of late 19th-century urban planning, if you can call it that. It was the way that they laid out our block pattern, because they had to provide provision for the horses and carriages to come in to stables at the back," Price said Friday.