Canada’s mid-size cities are growing like big ones — and running into the same fights

RCI

From Halifax to Kelowna, denser housing is reshaping mid-size cities to grow up, instead of out.

For generations, growth in many Canadian cities meant the same thing: new subdivisions at the edge of town, detached homes, longer roads and outward expansion.

Now, rising land costs, changing affordability pressures, population growth and public policies have pushed builders to add more multi-unit housing, not just newer subdivisions at the edges of cities.

CBC News examined 15 years of Canada Mortgage and Housing Corporation (CMHC) data for seven mid-size cities: Ontario’s London and Kitchener-Waterloo, Halifax, and B.C.’s Abbotsford, Nanaimo, Kelowna and Victoria to capture how growth patterns are changing outside Canada’s largest centres.

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In each community, apartments, row housing and other multi-unit forms now make up a growing share of new construction, representing nine out of every 10 homes built in Victoria, Abbotsford and Kitchener-Waterloo.

In Nanaimo, multi-unit starts were only a tenth of its total construction in 2010, but by 2025, they accounted for two-thirds of the market, while London and Kelowna saw their multi-unit shares jump by 50 per cent, flipping their development profiles from single-family-centric to high-density-centric in just 15 years.

It means that mid-size cities across Canada — long seen as communities that are still urban, but where people sought more space — are adding multi-unit residencies at a pace not seen in decades. The shift is exposing a deep divide: not over whether more housing is needed, but over what kind and who that housing is actually for.

Building boom didn’t bring lower rents

Halifax saw a surge in multi-unit construction starting as far back as 2010.

Building more units didn’t solve the city’s housing crisis, says Ren Thomas, an associate professor at Dalhousie University, who argues the vast majority of housing is market-driven and the boom prioritized high-profit units that many residents couldn’t afford.

A unit is not a unit, like a subsidized unit, or a supportive unit for a senior or something…. It’s not accessible to a lot of the people who would need it, said Thomas, who studies housing policy and urban development.

She said what gets built is shaped by what developers can finance and deliver, not necessarily what is most affordable.

The city even dropped plans for including affordable units in new developments (new window) in April, a move aimed at keeping projects viable.

We hear from our students, for example, that they can’t afford those units, she said.

While apartment growth — and rent increases — may be starting to slow in Halifax (new window), the buildings still account for roughly 85 per cent of all housing starts in 2025, according to CMHC data.

CMHC data shows (new window) rents for units leased to new tenants, known as turnover rents, are significantly higher than overall averages, often by hundreds of dollars a month.

In Halifax, for example, the average rent for a two-bedroom turnover unit was $2,058 a month in October 2025, compared to $1,764 for a non-turnover unit.

The shift toward more expensive units reflects the higher cost of building today as developers increasingly focus on denser housing.

Math often supports density

Kartik Singla, founder of Ontario-based developer Empire Communities, said many mid-sized cities now offer a more workable equation for developers than larger markets.

Land is still cheaper than Toronto, but rents are not half of Toronto, he said. So the numbers can work better in places like London, Kitchener, Windsor.

Density is what makes the project viable.

But that doesn’t always mean it’s affordable for renters.

In some cases, the scale itself can even come with risk. In Kelowna, the University of British Columbia’s downtown tower will rise 43 storeys with more than 470 units, making it one of the tallest buildings between Vancouver and Calgary.

Residents displaced after the excavation portion of the construction are suing the university, alleging excavation caused ground movement (new window) that damaged nearby buildings.

UBC has denied causing the full extent of the damage. The City of Kelowna did not respond to a request for comment.

Even so, Singla, who helps organize an annual conference for developers focused on missing middle housing — mid-scale developments like townhouses and small apartment buildings — said the pressure to build big isn’t going away.

With rising costs for land, financing and construction, adding more units to a site is often what allows a project to be financially viable at all.

You can’t keep saying ‘no’ to growth and then complain there’s nowhere to live. At some point, units have to go somewhere.

‘Missing middle’ faces big hurdles

In practice, that no often shows up as delay.

In Ontario, recent legislation has pushed approvals further ahead of construction (new window), according to Alicia Monteith, a planner with Stratford, Ont.-based Monterra Planning Consultants, leaving projects out of sync and caught between provincial and municipal governments.

The approvals are so far ahead and the process just can’t keep up. There’s a lot of friction between different powers at different levels, she said.

Building the ‘missing middle’ to help fix Canada’s housing crisis

As Canadian cities try to address the housing crisis, experts say more focus on building what’s known as the ‘missing middle’ would bring greater affordability and choice to the market.

It made the opportunity easier, but it didn’t make navigating the system any easier.

Monteith said even modest infill projects can get tangled in local fights, leaving the missing middle among the hardest projects to deliver.

The financial viability of those projects is highly sensitive, she said, noting the approval complex is just as complicated for smaller projects as bigger ones, but there’s little room for error and fewer units to spread the risk.

Neighbours pushing back

Scale driven by math, rather than neighbourhood need, is exactly what activist Kate Kaikkonen says she and her neighbours are pushing back against in London.

It’s about how and where it’s built, she said.

Kate Kaikkonen is part of a community group called Stoneybrook for Community-First Development. She describes the neighbourhood as a sought-after area, with schools and walking paths where residents say they’re open to new growth.

It’s just this extreme density in a very short period of time that doesn’t have the infrastructure to support it, she said.

The proposal that neighbours are against would replace four single-family homes with nearly 300 units across eight storeys that would tower over surrounding properties, despite complying with current city zoning.

Kaikkonen said the surrounding neighbourhood wasn’t built for that level of intensity, with limited road access forcing traffic through residential streets and parking levels that don’t reflect the city’s reliance on cars.

As much as we want to be a transit-focused city and, I see that in our future, it’s not the reality right now.

Density shift may not hold

It’s one sign the shift toward larger buildings in mid-size cities may not hold.

Anthony Passarelli, the lead CMHC economist for Southern Ontario, said as market conditions soften, developers could pivot back to smaller, lower-risk projects.

There will be, I think, a shift towards these low- to medium-rise buildings because of the fact that, from a developer standpoint, there’s less risk, he said.

Passarelli said the CMHC is already starting to see that shift taking place in larger cities, such as Toronto and Vancouver, as fewer buyers can afford detached homes and developers look for lower-risk projects that are easier to finance.

The effects tend to ripple outward, with smaller cities eventually following the same pattern of what gets built and what sells.

Colin Butler (new window) · CBC News