The Canadian Mortgage and Housing Corporation’s latest report paints a concerning picture for Vancouver’s housing market, revealing a staggering 56% decline in missing middle housing construction between 2018 and 2024. This includes multiplexes, townhomes, and low-rise apartments—properties designed to fill the gap between single-family homes and high-rise condos. For homebuyers, investors, and policymakers, this trend signals critical challenges in affordability, urban planning, and mortgage financing dynamics that demand urgent attention. Understanding the root causes and implications of this downturn is essential for navigating Vancouver’s evolving real estate landscape.
Missing middle housing has emerged as a cornerstone of modern urban planning, offering moderate-density options that preserve neighborhood character while increasing housing supply. These developments, often requiring minimal rezoning, have gained traction as cities grapple with population booms. Vancouver’s recent policy shifts—such as allowing eight-unit builds on single-family lots and abolishing single-family zoning—were intended to accelerate construction. Yet the data shows these measures have yet to reverse the decades-long decline in such housing, highlighting the gap between policy intent and market reality.
The CMHC report underscores a paradox: while cities like Calgary and Edmonton led national growth in missing middle housing (accounting for 67% of starts across six major cities), Vancouver’s construction plummeted to just 1,002 units in 2024—a stark contrast to its 2018 peak of 2,300. This divergence isn’t coincidental. High land costs, regulatory hurdles, and Vancouver’s unique market dynamics have created a perfect storm, making smaller projects economically unviable, especially in high-demand areas like the downtown core. For homebuyers eyeing entry-level options, this translates to longer wait times and heightened competition for limited inventory.
While Vancouver languishes, Calgary and Edmonton’s success stories offer valuable lessons. Their growth is fueled by strong population influxes, rising rental demand, and lower regulatory barriers. Abundant land availability has allowed developers to prioritize rental-focused projects, a trend accelerated by interprovincial migration. For mortgage professionals, this suggests that cities with fewer zoning constraints and cheaper land may present more stable investment opportunities. Borrowers seeking multi-unit properties in Vancouver, however, must brace for higher costs and tighter approvals, as lenders weigh the risks of smaller, density-challenged developments.
The pandemic’s shadow looms large over these statistics. Construction hits a nadir in 2020, with only 929 missing middle starts recorded—a direct result of supply chain disruptions, labor shortages, and shifting buyer priorities. Though numbers rebounded slightly, 2024 remains far below pre-pandemic levels. This resilience paradoxically underscores the need for systemic solutions. While Vancouver’s 2025 projections (1,572 starts by year-end) suggest a potential recovery, they still trail 2022 benchmarks. Homebuyers should monitor this trajectory closely; momentum could tip the scales toward more accessible entry points if policies and market conditions align.
High land costs, cited by industry experts as the primary barrier to missing middle housing viability, have profound implications for mortgage financing. Developers face thin profit margins on smaller projects, forcing them to either raise prices or abandon developments altogether. This dynamic disproportionately affects first-time buyers, who rely on mortgage products tied to lower price points. Lenders, meanwhile, must adjust risk models to account for the increased uncertainty surrounding mid-density projects. For borrowers, this means navigating stricter qualification criteria and potentially higher interest rates—a reality that demands proactive financial planning.
Vancouver’s 2023 zoning reforms represent a critical inflection point. By allowing eight-unit builds and dismantling single-family zoning, the city aims to unlock underutilized land and accelerate supply. Yet the CMHC report confirms these changes haven’t yielded immediate results. The delay highlights the complexities of urban development: rezoning alone can’t overcome entrenched financial and logistical challenges. Investors and homebuyers should view these policies as long-term bets rather than quick fixes. For now, the market remains in a holding pattern, with modest recovery unlikely to materialize before 2026.
Toronto’s parallel struggles with missing middle housing further complicate the picture. High land costs and regulatory inertia have stalled development despite similar policy efforts. This suggests that Canada’s largest cities share structural issues requiring coordinated solutions—whether through tax incentives, streamlined permitting, or public-private partnerships. For mortgage professionals, the takeaway is clear: portfolios tied to high-cost urban centers must incorporate contingency plans for prolonged supply constraints. Diversification into emerging markets like Calgary or Edmonton may offer more predictable returns.
For homebuyers, the missing middle housing crisis amplifies existing affordability challenges. As single-family homes continue to dominate the market, multi-unit options offer a viable alternative—but only if they become more accessible. Borrowers should explore mortgage programs specifically designed for multi-unit properties, which often come with favorable terms. Meanwhile, investors eyeing Vancouver’s rental market must balance the appeal of high tenant demand against the risks of delayed or canceled developments. Due diligence is paramount; not all mid-density projects are created equal.
The CMHC report’s emphasis on rental-focused construction in Calgary and Edmonton provides a roadmap for recovery. As Vancouver’s economy cools and rental demand surges, developers may pivot toward mixed-use or larger-scale projects to offset costs. Borrowers anticipating this shift should consider adjustable-rate mortgages (ARMs) or longer amortization periods to manage payment volatility. For first-time buyers, coupling these strategies with government programs like the First-Time Home Buyer Incentive could ease the burden of entry.
Policy innovation remains the linchpin of Vancouver’s housing strategy. The city’s recent zoning reforms must be paired with financial incentives—tax breaks, reduced development charges, or fast-tracked approvals—to make missing middle projects economically viable. Borrowers and investors should advocate for such measures while staying attuned to federal and municipal announcements. In the interim, temporary solutions like co-ownership models or shared equity programs could provide relief.
Vancouver’s missing middle housing crisis is a microcosm of broader challenges facing Canadian cities: affordability, density, and policy execution. For homebuyers, it means navigating a market where supply lags demand, forcing greater flexibility in property searches and financing options. For professionals, the lesson is clear: adaptability and data-driven strategies will determine success. As Vancouver inches toward recovery, proactive steps—whether through mortgage diversification, policy advocacy, or market diversification—can turn today’s challenges into tomorrow’s opportunities. The road ahead is rocky, but not insurmountable.
