Posthaste: These 2 Canadian cities are solving the ‘missing middle’ housing puzzle better than others

Construction crews work on townhouses in Edmonton's Blatchford neighbourhood. Photo by David Bloom /Postmedia

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“Missing middle” housing  — the kind that people can afford and that offers more space than a squished condominium — are starting to pop up in greater numbers, according to a new report from Canada Mortgage and Housing Corporation (CMHC), possibly giving hope to young families looking for a home where they can stretch their legs.

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“Missing middle” refers to low-density housing such as suites in detached homes, row houses, stacked townhomes, multiplexes and low-rise apartments of four storeys or less. Typically, “these housing types are often under-represented in new supply,” which is why they are referred to as “missing,” CMHC said in its report on the sector released on Thursday.

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CMHC said this type of accommodation is critical to solving Canada’s housing crisis.

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“It broadens housing choices for families who can’t afford single-detached homes and find high-rise apartments do not offer enough space for their needs,” the report said. “Missing middle” housing is also key to solving the housing crisis because it can be built in existing neighbourhoods, often faster and for less money.

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The federal housing agency tracked “missing middle” housing in six major Canadian cities — Vancouver, Calgary, Edmonton, Toronto, Ottawa and Montreal — and found that between 2023 and 2024, construction of these types of homes rose 44 per cent after only rising by about five per cent from 2018 to 2023, based on historical housing starts data.

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But don’t start celebrating yet.

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“There’s been a steady increase in missing-middle housing starts across Canada’s six major cities, but this masks significant regional differences,” the report said.

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Here’s a look at the cities that are getting it right and those that still have some work to do.

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Calgary and Edmonton are the “missing middle” superstars, accounting for 67 per cent of starts for this kind of housing, CMHC said, with both cities experiencing “rapid growth” in recent years.

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Both of these Alberta cities have traits conducive to these types of builds, including plenty of land, more accommodative regulations and a rising population as interprovincial migrants flock west. The latter has increased demand for rental units, which are also on the rise.

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“Favourable policies and incentives have further facilitated this development along with broader increases in overall housing starts,” CMHC said.

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Row-home construction in the suburbs accounts for a lot of the “missing middle” supply in the Prairies, especially in the Calgary and Edmonton suburbs. CMHC also found that more infill construction is occurring in their downtowns.

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Moving to the centre of Canada, Ottawa and Montreal accounted for the next largest share of total “missing-middle” construction in 2024, at 21 per cent.

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CMHC attributed this increase to the 2022 rise in interest rates, which it said encouraged developers to build smaller projects because they require less capital and can be easier to finance.

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“Following the 2022 interest rate hikes, these starts have helped cushion the downturn in overall development activity in these cities. Smaller projects may be more feasible in a challenging development climate,” CMHC said.