Montreal may be building rental housing at a record pace, but Mondev is already becoming far more selective about what it will build next.

Jordan Owen, who oversees Mondev projects from acquisition through construction and stabilization, said the company has started about 1,500 units annually in 2025 and 2026. Much of that activity, however, is coming from sites bought years ago, when land and development costs were lower.

“That’s why the numbers are working,” Owen said during a discussion at Connect Montreal.

The harder question is what follows them.

Rental housing accounted for a record 86% of Montreal housing starts in the first half of 2026, according to CMHC. But the agency has also reported a decline in projects sitting in the pending-start pipeline, particularly on the Island of Montreal, suggesting some of today’s construction strength may not carry forward.

Costs are adding to that pressure. Altus Group estimates Montreal construction costs rose at least 4% last year and has pointed to weaker appetite among private developers as labour costs and tighter margins challenge project feasibility.

Against that backdrop, Mondev is now evaluating sites that could support development in 2028 and 2029, and Owen said its acquisition criteria have tightened considerably.

“We’re no longer going to take permit risk, zoning risk,” he said. “So the vendor wants us to close before the zoning’s in place — you can keep it.”

The scrutiny extends beyond approvals. Owen said larger sites that allow lower-rise construction can sometimes produce better economics by improving building efficiency, construction timing and cost.

“It actually has to be a specific layout as well,” he said. “So we’re very, very picky.”

That puts a premium on sites with enough scale and the right configuration to build efficiently. Smaller parcels can leave developers with fewer options to manage costs.

At the other end of the spectrum, Cadillac Fairview’s Jeroen Henrich said larger sites give developers more flexibility.

He pointed to the company’s nearly 100-acre Carrefour Laval lands, where it sees potential for 8,000 to 10,000 units.

“That’s where you have the opportunity to really, in a meaningful way, address some of these issues,” Henrich said. “It’s much harder when you’re dealing with a smaller site.”

The advantage is room to manoeuvre. On a larger site, developers have more ways to accommodate infrastructure, parks, schools and affordable housing across the broader project rather than forcing every requirement into a tighter parcel.

Pictured: Mondev is advancing a multi phase rental development at 291 Young St. and 324 Peel St. in Montreal’s Griffintown neighbourhood, part of a three building site it acquired in 2018. The full buildout is planned for about 750 units.

Up Next | Connect CRE Montreal is followed by Connect’s next Canadian event, Connect Alternative Real Estate in Vancouver on Oct. 15, bringing together investors, developers and operators across sectors including student housing, seniors, hospitality and other alternative asset classes. Learn more and register here.