Webinar June 2026: Fundamentals of Expanding Residential Development
Why Canada's Housing Crisis Is a Scale Problem, Not Just a Capital Problem
For this month's session, Trainex Hub welcomed Isaiah Joseph, a wealth management and real estate research professional, and Jonathan Diamond, principal at Well Grounded Real Estate and founder of Inner House. The two have shared stages before, at Rotman School of Business and the Scarborough Business Association's housing summit, and the conversation picked up where those left off: not with the usual talk of interest rates and tax rebates, but with a harder question — why doesn't the real estate development industry actually scale?
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A Lack of Scale, Not a Lack of Capital
Joseph opened with the framing most in the audience would recognize: Canada has a supply-side housing crisis, and governments and the private sector have responded with everything from tax rebates to modular construction pilots to new government equity programs. Yet the needle hasn't moved. Diamond's answer cut against the conventional wisdom.
"I'll push back on the idea of a lack of capital, because I'm not sure that's necessarily the case. In order to come up with a solution, you need to properly diagnose the problem — and I think that's what we get wrong."
The real issue, Diamond argued, is that development remains a project-based industry rather than a systems-based one. Every building is a one-off: acquire the land, raise the money, assemble the team, build, sell, manage — then start again from zero on the next site.
"You don't actually have this compounding experience, because every single project is custom. If a developer wants to double their output, they have to double the capital, double the labour, double the inputs. It's the opposite of a software company that can scale very easily."
Code, Geometry and the Cost of Complexity
Diamond traced part of the unscalability back to building code itself. Single-stair buildings, for instance, are illegal above a handful of storeys in most of the province, forcing extra egress space that eats into rentable square footage on smaller buildings — which in turn pushes the economics toward tall, high-density towers and away from the modest mid-rise.
"The cheapest and most efficient buildings — which are also the most sustainable — are illegal to build in Toronto. A beautiful 25-unit mid-rise in a nice residential area just isn't economically feasible under the current code."
Layer in angular-plane setbacks, site plan obligations and zoning that often aren't designed to work together, and what should be a straightforward goal — build housing that's higher quality and cheaper — becomes, in Diamond's words, "a very difficult problem to actually solve," not because the destination is unclear, but because so many public and private parties have to move in sync to get there.
The Honda Civic Theory of Housing
The conversation's clearest idea may have been Diamond's reframing of what "passing on savings" actually means in development. Cutting costs isn't about handing a discount to one tenant — it's about widening the map of where a project pencils out at all.
"If you need $3,200 a month in rent to make a project viable, only certain markets can support that. But if you can build a profitable project at $2,400 a month, that many more markets — and that many more households — now have access to new housing supply."
His analogy: if the cheapest car on the road cost $200,000, only Ferraris and Lambos would exist, and a massive middle market would simply go unserved. Honda solved that problem for cars. Real estate, Diamond said, still hasn't produced its equivalent.
"Unfortunately, we have no such equivalent in the real estate industry. The goal is to create a model that can deliver lower-priced housing such that you can build profitably in lower-rent markets."
Inside 1925 Victoria Park: License the Design, Outsource the Build
Diamond's own test case is 1925 Victoria Park, a 185-unit, fully prefabricated purpose-built rental in Scarborough designed deliberately for families — large two- and three-bedroom units rather than the standard 500-square-foot condo. The structural panels are manufactured off-site by two independent manufacturers and craned into place, with an on-site construction manager overseeing assembly.
The model's distinguishing feature isn't the prefab itself — it's the structure underneath it. Rather than buying a finished product from a single prefab supplier, Diamond's team licenses a design system and contracts the manufacturing out independently, which he compared directly to Uber's playbook.
"We're licensing a design and outsourcing the manufacturing instead of purchasing a product. That's how we're able to scale — because we're not reliant on a specific supplier, and we're eliminating the geographic barriers and the capital required to replicate manufacturing infrastructure city by city."
Asked how the model protects against the risk of relying on third-party manufacturers, Diamond pointed to three layers: diversification across more than one supplier, building enough internal "process power" that competitors simply can't keep pace, and tying the structure together through IP and confidentiality agreements.
What "Enough Housing" Actually Means
Project manager Saman Davari closed the Q&A with a question that reframed the whole discussion: what does "enough housing" even mean in Canada? Diamond's answer offered two concrete tests rather than a vague target.
"If we have something called 'Affordable Housing' — capital A, capital H — housing isn't affordable. The second we can eliminate top-down affordable housing programs, we'll know our system is working. And if households are prevented from moving for a job, a family change, or an opportunity they've outgrown their place for, that's the other signal that housing isn't affordable."
It was a fitting note to end on. Across the hour, the throughline from both speakers was the same: Canada's housing shortage isn't simply a financing problem to be solved with another rebate or a faster permit. It's an engineering and systems problem — and the developers who treat it that way, Diamond argued, are the ones who will end up solving it profitably.
For more information:
Saman Davari
Project Manager
Saman.davari@trainex.ca