For much of the 20th century, Canadian cities played a direct role in developing and managing affordable housing, often in partnership with provincial and federal governments. Public housing projects, such as Regent Park in Toronto and Benny Farm in Montreal, were built to provide low-income families with stable rental options. However, starting in the 1980s and accelerating through the 1990s, municipalities largely withdrew from housing development as senior governments cut funding and shifted responsibility to the private sector. The federal government ended its national social housing program in 1993, leaving provinces and cities with fewer resources to maintain or expand affordable housing stock. As a result, municipal involvement in housing became limited to zoning regulations, subsidies, and partnerships with private developers, contributing to the affordability crisis seen today.

Canadian cities are beginning to take a more hands-on approach to tackling the housing crisis again, by developing their own low-cost community rental properties on municipally-owned land. With rising rents, stagnant wages, and increased housing demand, affordability has become a pressing concern across the country. Many municipalities, recognizing the limits of relying solely on the private sector, are leveraging public land to create permanently affordable rental options for lower-income residents.

One of the key advantages of this approach is the ability to bypass speculative real estate markets that often drive up costs, and limit long-term affordability. By building on land they already own, cities can keep costs down and ensure that these units remain accessible to those in need, rather than being converted into high-priced rentals or condominiums. Toronto’s Housing Now initiative is a prime example, using city-owned lands to develop mixed-income communities where a significant portion of the units are dedicated to affordable rental housing. These projects are structured to remain affordable over the long term, either through direct municipal ownership or partnerships with non-profit housing providers.

Collaboration with non-profit organizations, housing cooperatives, and community land trusts has become an essential part of this strategy. Many cities recognize that while they can provide the land and initial investment, long-term management and tenant support are often best handled by organizations with experience in affordable housing. Vancouver has been a leader in this area, working with its Community Land Trust to develop and manage affordable units across the city. These partnerships not only ensure that affordability is maintained in perpetuity but also allow for a more community-focused approach to housing, where tenant needs and long-term sustainability are prioritized over profit.

Another emerging trend in municipal-led housing development is the use of modular and prefabricated construction. These methods allow for faster, more cost-effective builds, reducing both construction time and expenses. Ottawa and Edmonton, for example, have invested in modular housing projects to provide rapid solutions for those in immediate need, including people experiencing homelessness. These developments often integrate support services such as mental health care, employment programs, and childcare, recognizing that affordability is about more than just keeping rent low—it’s about providing stability and access to essential resources.

Policy changes at the municipal level are also playing a crucial role in supporting these initiatives. Some cities have adjusted zoning laws to allow for higher-density affordable housing developments or have introduced inclusionary zoning policies that require developers to include affordable units in new projects. Montreal’s 20-20-20 bylaw is an ambitious attempt to balance private development with affordability, mandating that large residential projects include at least 20% social housing, 20% affordable housing, and 20% family-oriented units. While policies like these don’t create city-built rental properties directly, they reinforce the broader municipal commitment to ensuring housing remains within reach for lower-income residents.

Despite the progress being made, challenges remain. Municipal governments often face funding constraints, relying on provincial and federal support to bring these projects to life. Bureaucratic hurdles and community opposition—often fueled by NIMBY (Not In My Backyard) sentiments—can slow down approvals and limit where these developments can be built. However, growing public awareness of the affordability crisis has led to increased political pressure to push projects forward. Programs like the federal Housing Accelerator Fundand the Rapid Housing Initiative are providing much-needed financial backing, allowing cities to expand their efforts and bring more units online.

The future of municipal-led affordable rental housing looks promising. While cities alone can’t solve Canada’s housing crisis, their willingness to take a more active role in development is a step toward ensuring that affordable housing is treated as essential infrastructure rather than a market-driven commodity. If these efforts continue to grow, they could serve as a model for other municipalities seeking sustainable, long-term solutions to the housing affordability challenge.