The Construction Financing Shift to Kickstart a Modular Housing Boom
- Rosaline J. Hill
- 2 days ago
- 4 min read
Mark Carney’s plan to double construction to nearly 500,000 homes a year is a stress test for every outdated assumption built into our housing system. Local zoning, approvals, and financing frameworks were created for a slower, conventional construction process. That model simply can’t move fast enough to meet today’s urgent demand.
Modular construction offers an exciting opportunity. By mass producing standardized housing components, it turns repetition and precision into speed, cost savings, and predictable quality. The factories are ready, the technology is proven, and the demand for faster housing construction is undeniable. Yet a quiet financial disconnect is holding the industry back—a subtle shift could ignite a housing revolution, if the regulatory pieces line up (but more on that later).
Traditional construction lenders still base financing on what can be physically verified on the construction site, judging progress by visible stages such as poured foundations or framed walls. For modular builders, most of that value has already been created off-site in factories. Because the financing system cannot recognize off-site progress, developers struggle to access capital when they need it most: during manufacturing. That mismatch is one of the biggest barriers preventing modular construction from scaling across Canada.
A Strong Proof of Concept: CMHC Pilot Project in Calgary
A recent project in downtown Calgary shows what happens when those barriers are lifted. At 1007 6 Avenue SW, 56 factory-built modules were assembled into an 84-unit affordable rental development through a partnership between ATCO Structures and Attainable Homes Calgary. The units were manufactured in about three months and installed on-site in just 10 days, a timeline made possible thanks to flexible financing from a Canada Mortgage and Housing Corporation (CMHC) Pilot program. This program issued a certificate of insurance and performance bonds, enabling funds to flow even while the units were still in production in the modular factories.
It’s Time to Mainstream Modular
This is the model Canada needs to scale. By expanding programs like CMHC’s MLI Select to include guarantees, including insurance and performance bonds for modular components, hundreds of projects could move forward across the country. Builders would gain access to mainstream construction financing, lenders would have greater confidence in off-site production, and communities would benefit from faster, more affordable housing delivery. It’s a win-win-win.
Modular construction is also highly adaptable. Beyond mid-rise rental apartments, it can be applied to townhouses, six-plexes, laneway homes, and even commercial uses such as offices and hotels. Its flexibility allows municipalities to meet housing goals without sacrificing design standards or sustainability targets. Shorter timelines mean lower costs, quicker occupancy, and fewer inflation risks. The modest expense of insurance or performance bonds is a small investment compared to the gains in speed and certainty.
Pairing Smarter Lending with Smarter Regulations
Construction lending reform alone won’t fix Canada’s housing shortage. Financial tools like MLI Select are only as powerful as the regulatory systems they operate within. To truly scale housing production, these tools must be paired with nationwide land‑use reforms that end patchwork zoning and create one unified market for low‑rise, multi‑unit housing—the kind of homes where 85% of Canadians already live.
Canada’s housing ecosystem is dominated by low‑rise living, and that preference is unlikely to change. Yet the market that serves it remains fragmented into thousands of local zoning codes that block repeatable, modular solutions from gaining traction. Builders face different rules for the same building type in every jurisdiction, making it nearly impossible to standardize supply or finance projects at scale. A unified national framework would turn low‑rise, multi-unit infill from a niche pursuit into a mainstream industry that’s predictable for lenders, viable for builders, and responsive to the way most Canadians actually live.
Calling the Federal Government to Action
Until zoning systems are harmonized, even the best financing programs or construction technologies will remain trapped at the margins. Aligning lending reform with zoning reform is how Canada unlocks its largest, most livable form of housing, and how we finally mainstream modular, in every city and town across Canada.
We’ve seen how Calgary made modular work with smart insurance and bonds. Now imagine that success everywhere in Canada. Ottawa needs to lead to make that happen nationally—because every community deserves faster, more affordable housing.
Rosaline Hill is a principal architect, planner, and development consultant with over 25 years dedicated to designing homes and communities that work. She founded RJH Architecture + Planning, Walkable Ottawa, Ottawa Cohousing, and BuildingIN, each building on her passion for smarter, more sustainable housing solutions.
With support from her CMHC Housing Supply Challenge winnings, Rosaline launched BuildingIN to pioneer a data-driven approach that unifies Canada’s fragmented housing market for low-rise, multi-unit infill. Her proven methodology has guided municipalities, large and small, through transformative change. Today, she partners with governments across the country, empowering changemakers to unlock scalable, affordable housing solutions where they are needed most.
If you’re looking for fresh ways to forecast infill, update infill policies, or want to chat about your municipality’s growth goals, we’d love to chat.
Contact Rosaline at info@buildingin.ca or call 613-262-5480 to begin the conversation.
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