The City of Toronto has been promoting an initiative to increase the inventory of affordable housing. Towards that effort the council has mandated the use of building space that historically would be constrained to garages so long as the property backs onto a public laneway and there is access for the fire department in the event of an emergency. There are some limits because the fire fighting vehicle has to be able to park within 90m of the proposed laneway house, and that parking spot must be within 45m of a fire hydrant.
There are also some other factors that determine the suitability of a particular location. Please read this in detail at the follow City of Toronto Laneway Suite link for fire fighting efforts: https://www.toronto.ca/legdocs/mmis/2020/ph/bgrd/backgroundfile-156421.pdf
For a more general overview of the requirements please see this link: