Panel explores financing challenges and innovative approaches in multi-family housing

Canada’s housing market faces a double whammy. "Housing is unaffordable, yet housing development isn’t as profitable as it once was," says Tom Davidoff, Associate Professor at UBC Sauder School of Business and Director of the UBC Centre for Urban Economics and Real Estate.

While 'housing finance' may seem deeply technical, it sits at the heart of Canada’s affordability problem, affecting anyone who aspires to own a home—and society at large. Against this backdrop, the UBC Centre for Urban Economics and Real Estate hosted a panel discussion titled The Future of Multifamily Housing Construction Financing.

The panel included Neil Levecque, Vice President of Housing Solutions – Multi-Unit at Canada Mortgage and Housing Corporation (CMHC); Nick Marks, Senior Vice President, Real Estate Finance at Anthem Properties Group; Graham Drexel, Executive Vice President and CFO at Grosvenor – Property Americas; and Suzana Gonçalves, EVP Sales and Marketing, Partner at MLA Canada. Tom Davidoff, one of Metro Vancouver’s leading voices on housing and affordability, moderated the discussion.

At the crux of the discussion was a stark reality: projects aren’t moving forward because financing conditions no longer work as they once did. Davidoff warned that the slowdown in multi-family housing can have broader consequences on Canadians’ quality of life.

"Most people who study cities favour compact development in apartment form, so that mass transit is feasible and cities are vibrant, interesting places. So, housing finance in multi-family units is a very important topic and impacts a large part of Canada’s economy," he said.

Financing squeeze, stalled projects, and a circular problem

Higher interest rates and weaker property appreciation have made investors hesitant. The smaller uptake in the presale condo model further complicates matters. As Suzana Gonçalves explained:

"We have to sell 65 per cent of units before construction can start, but the buyers who used to help us get there, mostly investors, aren’t buying right now. Without those early sales, projects don’t get financed, and without financing, we can’t start building. It’s a circular problem."

Davidoff added: "If they (investors) invested in presale properties a few years ago, they face the prospect of having to buy properties for more money than they are worth. Rental housing projects work better, but only because the government offers financing at a deep discount relative to the private market, which may or may not be sustainable in the long run."

CMHC’s role—and its limits

The financing discount Davidoff referenced comes in large part from CMHC, which provides mortgage insurance, housing research, and low-cost financing programs to support rental and affordable housing.

But the panel agreed it’s not a silver bullet. While CMHC’s financing offers stability and assurance to lenders through long-term loans, public-policy conditions can create friction. Neil Levecque articulated his thoughts about government assuming roles once held by private financiers:" Almost 90% of purpose-built rental financing today involves CMHC," he said. "We’re in that space because private capital either can’t or won’t be there right now. But we should always be asking ourselves: 'If the CMHC is doing 90% of the rental business, is that a good thing?'"

Davidoff emphasized that understanding CMHC’s balance between social mandate and financial sustainability is critical. "Do they make money for taxpayers, or lose it, in expectation?" he asked. "What would financing costs look like if they exited the market or scaled back their involvement?"

Rethinking priorities: The “Missing Middle” and family housing

Financial structures and buyer timelines shape not only how much housing gets built, but also what kind. Suzana highlighted this for family-sized, moderate-density homes—those that fall between detached houses and high-rise apartments.

"Family buyers don’t buy three years before completion," she said. "They buy typically wanting to move within a few months, so those larger homes are always harder to finance up front. We’re often forced to build what we know we can sell quickly … which is usually smaller units … because those buyers make decisions early and help us meet the pre-sale test."

Levecque noted that CMHC can help fill this gap by financing relevant projects, even if it cannot dictate unit mix: "Our role is not to tell developers what mix of units they have to build. But we are increasingly interested in seeing proposals that include more family-sized units. Affordability isn’t just about price, it’s also about having the right kind of homes."

Towards a new affordability model

Investor confidence in multi-family housing remains low, underscoring that solving Canada’s housing challenges requires more than land and labour—it requires innovation in financing and construction.

Davidoff encouraged looking beyond the presale condo model: "I am hopeful that public offerings can be made so that people can hold a modest portion of their wealth in a diversified basket of reconstruction condo projects. And I think that model could be moved into the condo sector."

Levecque highlighted the federal government’s Build Canada Homes initiative, which promotes modular and industrialized construction methods, drawing on European examples. The panel also stressed the need for policy alignment across federal, provincial, and municipal levels to reduce red tape and accelerate approvals.

Davidoff concluded: "In particular, I hope they think about innovation in condo finance that makes the burden of condo presale investment less daunting and more widespread."

The full video of the event can be viewed at the link on the event page here.