How Real Estate Investors Help Housing Affordability

Amid Canada’s ongoing housing supply and affordability crisis, real estate investors are often seen as part of the problem. However, when aligned with public policy and community needs, investors can be important allies in expanding supply, stabilizing rents and delivering diverse housing options. 

In the final quarter of 2024, the average household spent 55.9% of its income on mortgage payments, property taxes and utilities, a notable improvement from the 63.8% spent the year before, yet still significantly higher than the 30% threshold determined by the Canada Mortgage and Housing Corporation (CMHC) as ‘affordable’. In addition to a material increase in new construction, sustained and strategic investor involvement remains critical to further closing the gap between housing supply and affordability, and growing demand.

Scaling Rental Supply

Purpose‑built rental (PBR) developments are specifically designed and constructed to serve the long‑term rental market, offering professional management and stability that can help moderate overall price increases. While new rental property developments are being built, there will not be enough to meet projected demands. Investment dollars support these, and future, development projects. By directing capital toward these projects, investors can secure predictable, income‑producing assets while increasing the total pool of rental properties, which in turn helps ease pressure on market rents for middle‑income households.

Supporting Affordable and Mixed‑Income Rentals

Investors can also contribute to making housing more affordable by participating in developments that blend market‑rate units with below‑market or income‑restricted rentals. By collaborating with municipalities and non‑profits, and through government incentive programs such as the Apartment Construction Loan Program, investors help make mixed‑income projects financially viable.

Unlocking “Missing Middle” Housing

Missing middle housing – or low‑rise multi‑unit housing such as duplexes, triplexes and townhouses – has been largely absent from new supply due to zoning restrictions. Real estate investors with expertise in infill and small‑scale development can work with municipalities to encourage missing‑middle projects. In cities like Ottawa and Calgary, rezoning pilot programs have already permitted up to four units in formerly single‑family zones, leading to over 500 units in the pipeline.

Repurposing Underutilized Properties

Vacant commercial and industrial properties – left empty by the shift to remote work – present ripe opportunities for conversion into residential units. Adaptive reuse projects often benefit from brownfield grants and expedited approvals, lowering both cost and timeline. For instance, a former office tower in downtown Montreal was transformed into 200 rental apartments in 2024, with 30% designated as affordable housing under a municipal incentive program. Investors willing to navigate the complexity of retrofits can deliver high‑impact projects that both revitalize neighbourhoods and boost housing stock.

Supporting Community Land Trusts and Co‑ops

Community Land Trusts (CLTs) and housing co‑operatives remove land from the speculative market, ensuring permanent affordability. Investors can support CLTs by providing low‑interest, long‑term loans or equity capital, earning modest returns while safeguarding affordability. In British Columbia, the Provincial Land Trust Loan Program has financed over 1,200 CLT units since 2022, with participating lenders receiving returns of 2–3% – below market, but with significant social impact. Such investments help stabilize neighbourhoods and provide homes for families that might otherwise be priced out.

Advocating for Balanced Regulation

While some government measures aim to curb speculative buying, they risk impeding broader investment needed for new supply. Investors can play a positive role by advocating for policies that distinguish between speculative purchases and capital committed to development. 

Despite the bad reputation that they may receive, real estate investors can play a key role in meaningfully improving Canada’s housing affordability. RLP InvestorsEdge™ agents at Royal LePage® bring specialized expertise and a clear understanding of the positive role that real estate investors play in today’s housing market. Through advanced training in market analysis, policy incentives and emerging trends, these experts deliver professional, investor‑focused advice, demonstrating that well‑capitalized, strategically guided investment is a vital component of Canada’s housing solution.