With municipal planners citing limited developer interest in diverse or affordable projects, we aimed to see how developers perceive the challenges and opportunities of housing innovation. We interviewed 26 professionals in residential development, contracting, and financing across Canada to identify drivers and obstacles to new methods like prefabrication and permit-ready plans, as well as how market, regulatory, and community dynamics influence their decisions.

The Developer Landscape

Our study participants ranged from small-scale single-family builders to large multi-unit specialists, revealing how different segments approach innovation. Some prioritize speed and cost-effectiveness, while others invest in advanced methods like modular systems or middle housing. Regardless of scope or region, developers remain cautious about unfamiliar approaches, citing risks from higher costs, delays, and untested methods that could threaten their bottom line.

Main Drivers and Barriers to Innovation

Cost, Time, Risk, and Demand emerged as four recurring themes developers consider before integrating a new idea or technology into their projects:

Cost

Economic viability stands as developers’ most immediate concern. Many noted that rising prices for materials, labor, and land have tightened margins, making expensive innovations (e.g., new construction technologies) less attractive unless there is clear evidence of long-term savings. Government programs, such as CMHC’s MLI Select, can partially offset these costs by offering favorable financing terms to developers who integrate specific elements like energy efficiency or improved accessibility.

 “Right now, the only way that we can make projects with private capital is to work with the CMHC products because conventional loans don’t work. They’re too expensive.” — Developer

This quote underscores the importance of targeted funding in nudging developers toward more sustainable or innovative designs, provided they remain within a profitable cost structure.

Time

Developers consistently linked time to cost. Lengthy municipal approval processes, shifting regulatory requirements, and community opposition can translate into months or years of delay. These protracted timelines reduce the flexibility to try something new and untested because the financial risk accumulates with each additional month the project is on hold.

Although modular or prefabricated construction sometimes promises reduced on-site build times, several developers cautioned that shipping delays, on-site adjustments, or code modifications could diminish the hoped-for efficiencies. As a result, even promising “fast-build” innovations require proven reliability before developers feel comfortable betting on them.

Risk

Building on the interplay between cost and time, many developers emphasized their aversion to innovations that lack a track record in similar climates or markets. For example, if a modular provider folds mid-project or if a building method proves less durable than anticipated, the financial repercussions can be enormous.

“Nobody really wants to be the first one to risk their money on something that may have problems 10 years down the line.” — Developer

This aversion can be especially pronounced in smaller markets, where fewer comparable projects exist to demonstrate the feasibility and desirability of new housing types.

Demand

Ultimately, no innovation will gain traction if developers believe homebuyers or renters are unwilling to embrace it. Negative perceptions, such as equating prefab to “trailer-like” structures, remain a hurdle. Many developers noted that if consumers are hesitant, the added marketing needed to overcome misconceptions further increases costs and risk.

Overcoming these perceptions requires robust, real-world examples that highlight quality, aesthetic appeal, and value for money. In some cases, developers see an opportunity to be “first movers” in a region, offering an innovative product that could attract curious buyers. However, they must be confident that the community is ready to accept it.

Municipal Processes as a Core Challenge

Although many municipalities in our broader study described themselves as “streamlined” and “open to development,” 62% of the developers we interviewed cited municipal approvals as the most significant challenge they face in bringing housing projects to fruition. This contrasts with municipal perceptions that their internal procedures are optimized to expedite development. From the developers’ perspective, these hurdles stem from several interrelated factors:

• Long and unpredictable timelines: Even with municipal staff’s expedited efforts, community opposition or zoning changes tie up capital and raise uncertainty.
• Unclear or shifting rules: Municipalities’ frequent code or bylaw changes add risk, complicating feasibility calculations.
• Insufficient communication or support: In smaller towns or rural communities, limited municipal staff and expertise cause backlogs, delaying innovative projects.

Developers emphasized that each day spent waiting on approvals increases carrying costs and compounds the financial risks they already face, particularly in an era of elevated construction expenses and high borrowing rates. While municipalities often perceive their own regulatory procedures as reasonable or even highly accommodating, these findings reveal a mismatch between how local authorities view their processes and how developers experience them.

The Role of Government Incentives and Financing

Current economic pressures have significantly increased developers’ reliance on government programs to offset costs and reduce risk, making them essential for spurring innovation. Nearly all participants underscored the importance of affordable financing and grants and described how eligibility criteria for government lending or incentive programs directly influence design decisions. 

For instance, if a developer can receive preferential terms for meeting certain energy efficiency standards, they are more likely to adopt corresponding innovations. However, developers cautioned that poorly structured criteria might lead them to “game the system” (prioritizing easier eligibility requirements) rather than commit to the most critical or impactful areas, such as affordability.

Communication With and Among Developers

Developers rely heavily on their professional networks and trusted intermediaries (e.g., architects, engineers, or general contractors) for updates about emerging technologies and best practices. Formal industry associations, conferences, and expos also serve as key channels where providers of new methods—such as modular systems or advanced materials—can build credibility by showcasing successful case studies.

“We hire a general contractor, so we rely on them to be up to date with the latest technologies… and often the architects…they know what’s out there and what’s coming up.” — Developer

In contrast, developers noted that isolated pilot projects lacking transparent data are unlikely to shift industry-wide attitudes. They value measurable evidence that an approach consistently delivers the promised advantages—cost savings, reduced timelines, or guaranteed quality.

Implications for Driving Innovation in Housing Supply

Developers, like municipalities and community members, are crucial actors in the broader housing ecosystem. The interviews suggest several ways to foster greater openness to innovation.

1. Demonstrate Long-Term Viability: Show that new methods save time and money, as well as remain durable—especially if developers or lenders retain ownership.
2. Offer Risk-Sharing: Government or industry-led support that absorbs early uncertainties encourages experimentation.
3. Highlight Consumer Demand: Community outreach and education can shift preferences toward diverse and energy-efficient options, lowering perceived risk.
4. Streamline and Clarify Municipal Processes: Predictable approvals and clear permitting frameworks minimize delays and costs.

Ultimately, developers’ willingness to venture beyond the status quo depends on cost, demand, financing, regulatory clarity, and community acceptance. Where these elements align, there is strong potential for creative and impactful projects that expand Canada’s housing supply. Where they do not, even well-intentioned innovations may remain on the sidelines.

Insights from Developers Summary: Developers need clear approvals, reduced financial risk, and proven demand to embrace new housing solutions

By adopting a holistic view of developers’ concerns, policymakers, municipalities, and private-sector innovators can champion solutions that narrow the gap between aspiration and action. Addressing community resistance is one facet of ensuring innovation becomes a reality; the other is creating enough clarity and incentive for developers to move forward confidently.

Showing community support can spur residents to accept housing innovation while demonstrating tangible results and minimal risk can drive developer adoption. With streamlined approvals, targeted financing, and clear communication positioning novel construction methods as proven and advantageous, Canada can pave the way for affordable, diverse, and sustainable housing to become the norm rather than the exception.

With community resistance being mentioned by both developers and municipal planners as one of the biggest barriers to housing development, it was vital to survey community residents across Canada to understand the nature of their resistance. 

We surveyed 2,516 residents of varying ages, urbanities, income brackets, genders, and ethnicities. Our questions explored residents’ levels of support for the presence of innovative housing (including ADUs, middle housing, prefab, modular housing, and supportive housing) in their neighborhoods, along with the drivers and barriers influencing their perspectives. 

Major drivers and barriers to community adoption

Our analysis confirmed that community resistance stems from a loud minority rather than a widespread majority. Across innovations, only about 10-20% of respondents were in opposition to an innovation’s presence in their neighborhood. For every resident who opposes housing innovation in their community, there are 3-5 residents who support its presence. This means that strategically elevating the supportive voices in a neighborhood is just as important as addressing the concerns of the critics.

This lever is reinforced by the strongest predictor of support: perceived neighborhood endorsement. A linear regression revealed that people who believe their neighbors would strongly support a given innovation are 25 times more likely to support it themselves. This effect depends on residents' ability to perceive their neighbors' attitudes—so providing evidence of existing community support could be crucial for acceptance.

Awareness and familiarity with innovations also drive support—any exposure to an innovation significantly increases acceptance. Notably, seeing an innovation “everywhere” was associated with a 12-fold increase in support compared to those who had never encountered it. This pattern suggests that opposition will be stronger in areas where the innovation is being introduced for the first time, or in rural and low-density areas. In these neighborhoods, housing innovation may be perceived as a direct threat to neighborhood character and lifestyle.

“No one moved to [the municipality] in order to be squished into a 50 by 100 parcel with four other families...It definitely goes against the culture.” — Municipal planner from a city with a population density <100 people/km2

For these communities, showcasing examples of how new housing types can seamlessly integrate into the existing neighborhood character is critical. Providing tangible evidence—through visuals, case studies, or firsthand experiences—can help dispel fears about changes to aesthetics, density, and lifestyle.

Key resident concerns

To evaluate residents’ concerns about the introduction of housing innovations in their neighborhood, we asked them to select which factors (from a given list) would most contribute to their opposition. Our analysis identified which factors were most commonly selected by respondents, as well as which factors had the strongest impact on attitudes toward the innovation. 

For middle, prefabular, and modular housing, concerns about neighborhood aesthetics were less commonly selected but were highly correlated with opposition. This suggests that while a minority of residents may care about neighborhood character, it strongly influences their overall resistance to that innovation. 

With ADUs and middle housing, traffic and parking concerns were commonly selected. This was frequently echoed in our qualitative research, where municipal workers made frequent reference to such complaints. Increases in neighborhood density were another common and high-impact concern for these innovations. 

These findings highlight key messaging priorities for municipal planners and developers working with these innovations. Demonstrating an innovation’s visual and cultural integration into a new neighborhood, along with clear evidence of reduced traffic and parking impacts, can help alleviate concerns and build community support.

Community communication strategies

Clear, transparent communication from developers and municipal planners is essential for addressing resident concerns. Our research identified two critical areas of information residents generally seek when an innovation is coming to their neighborhood: building specifications (e.g., the number of new units to be constructed, the height of the building) and the potential benefits to the community. These represent key pieces of information to include in communications with residents. 

Beyond what is communicated, how information is shared is equally important. Mistrust of developers—often due to fears of profit-driven motives—can make residents skeptical. To overcome this, information should come from trusted sources, like government entities and independent experts, which are viewed as free from conflicts of interest. Conversely, residents distrust profit-driven companies, social media, and commercial content.

“We can have studies done by the developer that show that, you know, there’s not going to be any traffic concerns… and it’s not believed by the public that that’s true.” — Municipal planner

Driving individual adoption

Reducing opposition to housing innovation is an essential part of resolving the housing crisis, but driving demand is equally important. To gain insight into promoting demand, we surveyed 4,953 homeowners and prospective homeowners across Canada about their willingness and ability to: 

• build an ADU
• convert their home to middle housing
• invest in community bonds
• purchase middle housing or a prefab/modular home

Our analysis revealed the key drivers and barriers that shape adoption. 

We found that social and cultural expectations about housing are major barriers to adoption. Respondents may equate homeownership with privacy and space and see higher-density housing as incompatible with these ideals. The social status associated with homeownership is also influential: some respondents think less of someone who buys middle housing rather than a traditional single-family home, and they may even think less of themselves for doing so. This suggests that addressing concerns about the social norms around homeownership could have a great impact on adoption. 

Insights from Community Perspectives Summary: Social norms must be converted from a barrier to a driver

Our research reveals several crucial strategies for building community support for housing innovation. First, the role of senior governments proves vital given their reputation as trusted, unbiased sources of information. Their position enables them to lead public campaigns that can shift perceptions around what constitutes a desirable home and neighborhood, helping address deeply rooted social norms that currently pose barriers to adoption.

Equally important is the need to elevate supportive voices within communities. Our findings show that while opposition often comes from a vocal minority, the supportive majority frequently remains silent. Making this support visible is critical for creating political will for development and can trigger a virtuous cycle: when residents perceive neighborhood support for housing innovation, they become more likely to support it themselves, potentially creating a chain reaction that increases demand for innovative housing.

Based on our analysis, we recommend five key strategies for promoting community support:

1. Elevate voices of support: Showcase existing support to influence personal attitudes and shift public sentiment.
2. Foster familiarity: Provide specific information and physical demonstrations about how developments will look, feel, and integrate into the community.
3. Address key concerns: Provide clear evidence about traffic and parking mitigation, building specifications, and community benefits.
4. Demonstrate integration: Show how housing projects can seamlessly integrate with neighborhood character.
5. Maintain transparency: Counter mistrust of developers by being transparent about stakeholder interests and partnering with trusted organizations like non-profits.

By implementing these strategies, communities can build the broad-based support needed to advance housing innovation and address the housing crisis.

Addressing Canada’s housing crisis requires a coordinated effort between municipal planners, developers, residential communities, and the government at all orders. While municipalities are increasingly streamlining approvals and adopting pro-housing policies, infrastructure limitations and political challenges fueled by community opposition continue to slow progress. Developers, despite their willingness to innovate, are constrained by financial risks, regulatory uncertainty, and concerns about consumer demand. Meanwhile, community resistance remains one of the most significant obstacles to housing adoption.

However, our findings highlight key levers for change. Senior government support, particularly through funding and regulatory leadership, can empower municipalities to fast-track zoning changes and invest in critical infrastructure. Strategic incentives can reduce risk for developers, making innovative housing more financially viable. Moreover, shifting public perceptions around the ideal of a single-family home with a backyard as the quintessential form of living by elevating supportive voices, providing tangible demonstrations of new housing types, and addressing key concerns around density, parking, and aesthetics can help reshape community attitudes and drive broader acceptance of housing innovation.

Ultimately, solving the housing crisis requires more than just technical solutions—it demands a shift in how we think about housing itself. By aligning municipal, industry, and community interests through clear policies, financial mechanisms, and public engagement strategies, Canada can pave the way for a more diverse, affordable, and sustainable housing future.