Toronto will be home to the first housing development by Build Canada Homes, a new federal agency created to deliver affordable housing at scale across the country.

The inaugural project, Arbo Downsview, will deliver 540 new homes using modern methods of construction such as prefabrication, modular building, and mass timber.

“Build Canada Homes is advancing new approaches to housing delivery,” said Ana Bailão, CEO of Build Canada Homes. “Our first development in Toronto will help demonstrate how co-ordinated public-private partnerships and innovation in home building can support the accelerated construction of below-market homes in growing communities.”

 At least 40% of the units will be affordable, offering a mix of studios and one-, two-, and three-bedroom homes for middle-class families. Build Canada Homes will launch a Request for Qualifications this week to identify design-build teams with expertise in factory-built housing to ensure speed, quality, and affordability.

To support new housing construction, the federal government will also invest up to $283 million through the Canada Housing Infrastructure Fund to upgrade Toronto’s Black Creek sewer system. The city will contribute an additional $425 million to the project, which will expand capacity, reduce flooding risks, and unlock development for as many as 63,000 new homes in the Downsview area.

Toronto Mayor Olivia Chow said the federal investment and the city’s contribution will unlock new housing opportunities and transform communities like Downsview, a former airport site.