There’s an answer to the housing crisis — build better buildings

By MaRS Staff  |  August 4, 2026

Overhauling Construction: The Blueprint for Affordable, Sustainable Housing

While interest rate shifts and housing headlines fluctuate, Canada’s underlying housing crisis remains as pressing as ever. In Toronto, housing starts have dropped to levels not seen since 2009, while rising material costs, high financing rates, and project cancellations continue to paralyze conventional builders. The traditional approach to construction is clearly failing to deliver enough homes quickly or affordably.

However, a radical shift in how we build offers a path forward. Innovative materials and techniques—including mass timber, prefabricated modular construction, robotics, and low-carbon concrete—have the potential to lower building costs while reducing carbon emissions. According to estimates from the University of Toronto’s School of Cities, modular construction alone can slash construction costs by 10 to 25 percent and significantly compress build timelines.

Navigating Industry Headwinds

Despite their clear advantages, emerging construction technology companies face severe economic pressure. Building specialized components off-site requires substantial initial capital, and cash flow often lags until late in a project's lifecycle. In recent years, several notable startups in the modular space have faced restructuring or bankruptcy due to tight margins and volatile market conditions.

To keep these innovations alive, the industry requires targeted policy modernizations and stable demand. As outlined in MaRS’s report, A New Blueprint, scaling these sustainable construction methods requires three key interventions:

1. Building Code Harmonization: Standardizing codes across municipal and provincial boundaries removes regulatory friction and lowers technical risk for developers adopting new materials.

2. Simplified Zoning and Permitting: Accelerating site plan approvals for pre-approved modular designs incentivizes developers to choose modern construction methods over legacy processes.

3. Innovative Financing and Bulk Procurement: Financial institutions and governments can ease cash-flow constraints by offering tailored financing structures and placing bulk orders, providing off-site manufacturers with predictable demand pipelines.

A Critical Moment for Canadian Real Estate

Leading Canadian innovators demonstrate the real-world viability of these techniques. Companies like Intelligent City utilize mass timber and automated manufacturing to build high-density, energy-efficient housing. However, broad commercial adoption requires systemic incentives. Providing developers with increased density allowances or preferred financing terms when using sustainable methods can effectively balance the perceived risk of adopting new technologies.

The housing sector stands at a decisive crossroads. Without updated policies, accessible working capital, and coordinated support across municipal, provincial, and federal levels, the industry risks losing the domestic companies pioneering these solutions.

Failing to support green construction methods today means locking the market into inefficient, carbon-intensive building practices for decades to come. By embracing modular innovation, mass timber, and modern policy frameworks, Canada can simultaneously tackle housing affordability and meet its long-term climate targets.

For those interested in further insights and developments, the article invites readers to explore other initiatives and stories within the ecosystem, including upcoming events and job opportunities in tech and innovation.