Why Can’t Toronto Build More Townhomes? Blame the Missing Middle

If you’ve been house-hunting in Toronto lately, you already know the drill: it’s either a shoebox in the sky or a detached home with a price tag that requires a small miracle (or a very generous relative). What most buyers actually want — a townhome with a bit of yard, a front door that opens onto the street, room to grow into — is somehow the hardest thing to find.

That’s not a coincidence. It’s baked into how the city is zoned, how land gets priced, and how developers do their math.

The numbers don’t lie

Since 2022, fewer than 2% of the roughly 74,000 housing permits issued in Toronto have been for townhomes. That’s a rounding error next to the flood of condo apartment approvals. Meanwhile, surveys and market data keep pointing the same direction: buyers want ground-oriented, family-sized homes. Developers, understandably, build what pencils out — and right now, that’s condo towers.

So why won’t the math work for townhomes?

A few culprits keep showing up:

Land is brutally expensive. When a parcel costs what it costs in Toronto, developers need to squeeze as much revenue per square foot out of it as possible. Stacking hundreds of units into one tower does that far more efficiently than assembling several lots for a row of three-storey townhomes.

Height limits do a lot of quiet damage. Large swaths of Toronto’s residential neighbourhoods cap building heights at around 9 to 10 metres — enough for a house, not much room for the kind of multi-unit, low-rise buildings that make townhome and multiplex projects viable.

Zoning is a patchwork, and approvals are slow. Even where the city has loosened rules on major corridors, getting a project through the approvals process can still mean months (or years) of committee hearings, variances, and neighbourhood pushback. Predictability is worth a lot to a developer financing a project, and condo towers currently offer more of it than townhome or multiplex proposals do.

The path of least resistance leads straight to condos. Put those three factors together and you get a planning system that — probably without meaning to — nudges capital toward high-density towers and away from the “missing middle.”

Wait, what’s the “missing middle”?

It’s the term urban planners use for everything that sits between a detached house and a high-rise: townhomes, duplexes, triplexes, fourplexes, laneway suites, and small walk-up apartments. Toronto used to build plenty of this stuff — a lot of the city’s most-loved older neighbourhoods (the Annex, Parkdale, the Junction) are full of it. Then decades of zoning that favoured either single-family lots or apartment towers essentially legislated the middle out of existence.

The result is what some planners call “tall and sprawl”: towers here, single-family houses there, and not much in between.

The good news: the rules are actually changing

Toronto has been chipping away at this, and the pace has picked up:

• Since 2023, fourplexes have been allowed as-of-right on most residential lots citywide — no rezoning application required.
• As of June 2025, sixplexes are permitted as-of-right in Toronto and East York District plus Ward 23, with other wards able to opt in.
• Parking minimums for duplexes through fourplexes have been eliminated citywide since 2022, and development charges are waived on multiplexes up to six units.
• The city’s “Major Streets” reforms now permit townhouses and small apartment buildings up to six storeys on neighbourhood lots fronting major roads.

None of this instantly solves the affordability crunch, and plenty of the reforms are still ward-by-ward rather than truly citywide. But it’s a real shift from “impossible without a fight” to “possible, if you know the rules.”

What this means if you’re buying (or building)

For buyers, it means the townhome and multiplex options you’ve been struggling to find may become more common over the next few years — particularly along major streets and in the neighbourhoods where sixplex rules already apply. For anyone considering a multiplex conversion or infill project, it also means the numbers are looking friendlier than they have in decades: waived development charges, no parking minimums, and a genuinely simpler approvals path in the areas covered by the new rules.

The missing middle isn’t fixed. But for the first time in a long while, Toronto is actually building toward it instead of zoning it away.

This post is for general information purposes only. Zoning eligibility varies by address — always confirm current rules for a specific property before planning a project.

Sources: Toronto Star, Storeys, Altus Group, and various recent multiplex-zoning trackers