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RBC Thought Leadership Housing Social housing: Laying the ground for growth  
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Housing

Social housing: Laying the ground for growth  

Previous efforts to build social housing stock between the 1950s and 1990s provide valuable lessons

The issue

The federal government is investing $13 billion through its Build Canada Homes initiative launched last year to create at least 26,000 units over five years.1 It comes as demand for non-market housing has far outpaced supply: currently, more than 300,000 households (up 22% since 2018) need social housing, with an average wait period of more than four years.2

Previous efforts to build social housing stock between the 1950s and 1990s highlight critical challenges that must be considered as new units are built under BCH, but also the various programs being pursued across all levels of government:  

  • Affordability was not designed to last. Social housing affordability has typically been tied to 35- to 50-year mortgage agreements with governments, with the logic being that debt-free buildings wouldn’t need ongoing support once the mortgage is paid. But recurring costs such as utilities, property taxes, and maintenance fees, etc. remain fixed costs long after debt repayments. Without dedicated operating subsidies that extend beyond mortgage maturity, providers must either raise rents, thus eroding affordability, or maintain rents at the expense of building maintenance.  

  • Buildings deteriorate while rents stay low. Legacy units charge affordable rents, averaging $565/month for one-bedroom units, and $637/month for two-bedrooms. But 45% of social housing built pre-1980 is now deemed to be in “fair or poor” condition.3 Some providers carry repair backlogs in the billions, while other provinces, straining from the financial burden, have sold portfolios outright, losing affordable supply permanently. If capital reserves for maintenance aren’t priced into operating budgets from day one, new units will face the same crisis in 30 years— around 8% of social housing built after 2020 is already in “fair or poor condition.” 

  • Critical data gaps persist. Lack of timely and comprehensive data means several fundamental questions remain unanswered: What’s the cost to build, operate and maintain social housing? How many social housing units have been lost in recent years as agreements expire? How many more are up for renewal in the next few years? Counting units constructed today alone does not accurately measure how affordability evolves or erodes for tenants over time. 

What’s needed 

Canada could act on four fronts: 

Tie affordability to assets, not financing. Canada offers tax benefits to non-profit housing providers but not conditionally. For new federal investments where co-op and non-profit delivery is growing, Canada could establish designated-provider status that enhances existing tax treatment in exchange for binding affordability and reinvestment obligations, plus preferential access to capital and land. Consistent rules also give lenders a clear basis for refinancing mature stock. Some British Columbia co-ops already leverage mature stock for expansion. Austria shows how to keep equity within the system: it locks affordability in permanently through limited-profit rules, where rents cover only costs and reserves, surpluses must be reinvested, and tax exemptions are tied to these obligations.

Make operating support long-term and bankable. Canada could provide operating support as predictable, long-term payments that providers can borrow against. To avoid creating a new affordability cliff when payments stop, it could extend support beyond mortgage terms or pair it with permanent asset rules. The Housing Australia Future Fund offers such a model: it provides operating support as quarterly payments over 25 years, giving providers a predictable revenue stream they can borrow against, much like how infrastructure projects borrow against government payments. 

Price full lifecycle costs from the outset and pool capital capacity nationally. In Canada, rents continue after the mortgage is paid off, but in buildings serving primarily rent-geared-to-income tenants, they remain too low to generate surplus. In buildings with rents closer to market, genuine post-mortgage surplus exists but stays siloed at individual providers. A Canadian building fund, sector-governed and drawing on these genuine surpluses, could redirect capacity from well-positioned buildings to those with repair backlogs–but only if paired with permanent operating support covering full costs and reserves for deeply affordable housing. Denmark shows how this could work: it builds maintenance into cost-based rents from the start. When mortgages are repaid, rents continue unchanged and are redirected into the country’s National Building Fund to finance major repairs and new construction sector-wide, spreading capital risk across providers.  

Establish integrated data that monitor units and their financial health. Data should focus on whether affordability continues for low-income households in ten, 20, 50 years, not just at the point of construction. Paired with standardized financial reporting from providers (operating costs, reserves, repair backlogs, revenue sources), these systems could provide alerts on rising issues while they can still be fixed, across both existing and new community housing being built and funded. The United States has a property-level national inventory of federally assisted housing, run by independent non-governmental research organizations.  

Two leading examples of social housing initiatives:

Regent Park, Toronto

Spanning approximately 69 acres in downtown east Toronto, Regent Park exemplifies comprehensive, long-term approaches to social housing revitalization. The project addresses a critical challenge facing aging social housing stock across Canada: how to renew deteriorating infrastructure while preserving affordability and strengthening community cohesion. Originally built in the late 1940s as Canada’s first social housing complex, Regent Park had become characterized by physical isolation, limited mixed-income integration, and inadequate amenities. The revitalization, launched in 2005 as a public-private partnership between the City of Toronto, Toronto Community Housing Corporation (TCHC), and private developers (The Daniels Corporation and Tridel), demonstrates a phased, financially sustainable model that leverages market-rate development to fund social housing renewal. Spanning five phases over approximately 15–20 years, the project replaces all 2,083 original rent-geared-to-income units, while adding more than 637 net-new affordable rental homes, 1,976 market units, and extensive community amenities, illustrating how strategic density and mixed-income planning can expand rather than displace affordable housing. 

Bob and Michael’s Place, Vancouver

The apartment complex demonstrates an integrated model of social housing that addresses both accommodation and the complex health and social needs of vulnerable populations. As the largest social housing development in Vancouver’s Downtown Eastside, the 231-unit, 10-storey building illustrates how effective collaboration among philanthropic, governmental, and community sectors can deliver housing at scale in high-cost urban markets. Developed by the Vancouver Chinatown Foundation and officially opened in March 2026, the project advances beyond housing-only approaches by embedding health services directly on-site through Lily’s Community Health Centre (operated by Vancouver Coastal Health), reflecting evidence that housing outcomes improve significantly when paired with integrated supports. The housing mix of120 shelter-rate units and 111 affordable units (rent-geared-to-income based on BC Housing Income Limits) reflects evolving standards for social housing that prioritize both affordability and quality of life. The project’s multi-sector funding model combined philanthropic leadership (a $10 million anchor donation), strategic use of public land (City of Vancouver’s 99-year lease), direct government investment ($51+ million from BC Housing and CMHC), concessional financing ($27 million in CMHC loans), and community fundraising ($30 million), showing a replicable approach to financing ambitious social housing in expensive markets. 

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