Over the past several years, Canada's approach to building more housing has been to assume that what works in one region of the country must work everywhere - and no idea exemplifies this mindset more than our federal government’s belief that handing out millions of dollars to cities to legalize fourplexes will somehow solve our housing crisis.
To be clear, multiplexes are not a bad idea. In the right places, they can add meaningful housing supply. Toronto is a good example of where the economics can sometimes work. But the unfortunate reality is that in many other parts of the Greater Toronto Area, the numbers just don't work.
Let's take the City of Markham as an example, where the mayor recently used his strong mayor powers to block the legalization of fourplexes.
Housing advocates are furious because they believe his decision is blocking much-needed supply to help solve our housing crisis. But is that actually true?
To better understand the potential for fourplexes in Markham, let's consider what's been happening in Toronto.
If you look at where multiplexes are actually being built in Toronto, the pattern is fairly consistent. Builders typically buy an older detached bungalow for under $1 million, demolish it, and build a fourplex — often with an additional garden suite or laneway unit — then rent each unit for just over $3,000 per month. At those prices, the math can work.
But that model doesn't translate to Markham.
Start with land costs. Last year, 1,913 detached homes in the City of Toronto sold for under $1 million. In Markham, just 25 did. Relatively inexpensive detached homes are the starting point for a multiplex project to pencil out, and they're almost nonexistent in Markham.
Even if they were more common, the rental economics would still be challenging. In Toronto, a builder can often rent a two-bedroom multiplex unit for more than $3,000 a month. In Markham, a tenant paying that same rent can lease an entire three-bedroom, three-bathroom house. When renters can get a full house for the same price as a small apartment, the market for multiplex rents simply isn't there.
Housing pundits often argue that the reason supply is so low is that it's illegal to build this type of housing — that legalizing "missing middle" housing will unlock a wave of new homes across the suburbs. While this sounds convincing in theory, it doesn't always hold up in practice. Even in Toronto, multiplex development only works in a relatively small number of neighbourhoods where land prices and rents line up. That's why most neighbourhoods are still seeing very little multiplex construction.
Whether fourplexes are legalized in Markham or not will likely have very little impact on how much housing actually gets built. And that points to a broader challenge in how we're approaching the housing crisis: much of the debate has become focused on policies that sound transformative but have limited impact once the underlying economics are taken into account.
It's possible that many housing advocates promoting fourplexes for cities like Markham see them as a first step toward allowing even greater density — perhaps six or eight units on a lot in the future. If that's the case, it would be helpful to have that conversation openly, rather than creating the impression that legalizing fourplexes alone will lead to a meaningful surge in new, more affordable housing in places where the economics simply don't support it.
John Pasalis is President of Realosophy Realty. A specialist in real estate data analysis, John’s research focuses on unlocking micro trends in the Greater Toronto Area real estate market. His research has been utilized by the Bank of Canada, the Canadian Mortgage and Housing Corporation (CMHC) and the International Monetary Fund (IMF).
Have questions about your own moves in the Toronto area as a buyer, seller, investor or renter? Book a no-obligation consult with John and his team at a Realosophy here: https://www.movesmartly.com/meetjohn
March 18, 2026
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