Frequently asked questions

What is Missing Middle Housing?

Missing middle housing refers to gentle density housing forms that fall in the “middle” of single-family homes and mid-rise apartment buildings, such as fourplexes and sixplexes. This type of housing is missing across Toronto neighbourhoods due to historically restrictive zoning laws, which have recently been amended and relaxed primarily through the "Multiplex Bylaw" enacted in mid-2023.

Fourplexes and sixplexes often look like large houses, fitting into existing residential streetscapes and infrastructure. They provide a housing form that is affordable and attainable, opening doors to neighbourhood living and providing residents with a sense of community, with amenities and services close to home. Well-designed multiplexes offer more versatile and larger living spaces compared to condos and apartments, and often feature private outdoor spaces.

These types of projects are referred to as “4+1” or “6+1,” representing the number of units in the main building plus one additional unit in the garden or laneway suite.

What is Modcity’s investment philosophy?

Modcity maintains a disciplined, long-term build-and-hold investing approach.

Modcity targets a niche gap in traditional condo and rental housing through a highly functional home. All Modcity units are family sized three or four bedroom units, more than 1,000 sf in size. Modcity units have 9-foot ceilings and large windows on three sides, providing a feeling of spaciousness, alongside ample light and air. Finishing quality is to a custom home standard, attracting AAA tenancies.

All Modcity fourplexes and sixplexes are fundamentally standardized in terms of building massing, envelope and interior configuration, allowing for streamlined decision making and improved construction efficiency and execution.

Nearly all property purchases are within a 200-to-500-meter radius of a major transit station (PMTSA/MTSA), supporting long term rent appreciation, and must have direct access to street parking.

All Modcity joint venture and co-investment LP opportunities are underwritten with a minimum requirement that 100% of the investor’s original equity be returned.

What does Modcity do in-house?

Modcity is a vertically integrated multiplex development firm, managing its own purpose-built rental projects from acquisition through permitting, construction, financing, and stabilization.

Our team identifies and underwrites sites internally, reviewing zoning, servicing, constructability, financing, and return potential before acquisition. Each project is assessed through a practical development lens, supported by our consultants, engineers, planners, and core trades.

Modcity also manages the full approvals process, including architectural design, zoning review, Committee of Adjustment strategy, building permit submissions, and coordination with city staff.

Construction is our core competency. We oversee the build process directly, using standardized systems, trusted trades, and durable specifications designed for long-term rental performance.

Financing is coordinated across the full project lifecycle, from acquisition and construction financing through CMHC permanent takeout financing upon completion.

This integrated model allows Modcity to control quality, cost, timelines, and investment outcomes across its growing rental housing portfolio.

What are Modcity's timelines for permitting and construction?

For 4+1 and 6+1 projects, Modcity typically secures all necessary permits within five months of property purchase and completes construction within nine months of building permit approvals, resulting in a total project timeline of approximately 14 months.

For larger lots, where Modcity undertakes a land severance to enable 2 or more semi-detached fourplexes or sixplexes with 2 or more garden or laneway suites (for a total of 10 or more units), we generally secure all permits within 8 months of purchase and complete construction within 11 months of building permit approvals.

Modcity’s execution is grounded in speed — with planning, permit approvals, and build-out being completed 30% faster compared to the industry standard.

What are Modcity's target returns?

For joint ventures and co-investment opportunities, every Modcity project is conservatively underwritten and pursued only when proforma analyses support a minimum 35% annualized IRR.

We structure our projects to return at least 100% of each investor’s initial cash investment upon construction completion through CMHC refinancing, in addition to providing substantial equity uplift.

Why invest with Modcity?

Modcity offers a solution for investors that want real estate exposure, have liquid cash available but do not want the complexities of spearheading a full development or tenant management themselves.

When it comes to multiplexes, we are subject matter experts and bring specialized expertise to every aspect. Having approved and built the largest volume of multiplexes in the industry, our firm is grounded in real planning and construction experience. Protection of investor capital remains one of Modcity’s core objectives.

All Modcity joint venture and co-investment LP opportunities are underwritten with a minimum requirement that 100% of the investor’s original equity be returned. As such, on completion, Modcity typically recycles initial investor capital into subsequent projects, with most investors finding satisfaction in building a portfolio of minority stakes. Modcity may explore the sale of certain completed multiplexes under the right macroeconomic environment, depending on project-specific investor preferences (sell or hold).

Does Modcity use CMHC financing?

Modcity will use either conventional private financing or CMHC financing for construction, but always opts for CMHC financing for permanent mortgage takeout, that is, upon construction completion and occupancy.

CMHC MLI Select employs a points-based system to offer highly attractive mortgage terms, including higher LTV ratios (85% to 95%) and longer amortizations (40 to 50 years), based on three criteria: affordability, energy efficiency, and accessibility. The more points a project earns, the better the mortgage terms. All of Modcity’s multiplexes are CMHC-approved for energy efficiency, verified through rigorous, up-to-date energy modelling by specialist engineering firms.

For joint ventures and client projects, Modcity performs and coordinates all necessary energy analyses to maximize the project’s score, balancing cost and feasibility, and subsequently organizes the submission to CMHC to secure optimal takeout financing.

Learn more about the CMHC MLI Select program here.

How do Modcity construction contracts work?

Modcity is a fixed-price builder, offering a guaranteed price with no hidden fees, unexpected costs, or budget overruns, covering every aspect of multiplex construction from start to finish. Our guaranteed price includes all costs for materials, labour, site supervision, and project management, ensuring your investment is protected from day one with no surprises as the project progresses.

We stand firmly by our timeline commitments, recognizing that execution speed is critical for any development project. In the event of a delay, Modcity will cover all mortgage costs for every month beyond the promised timeline. We pride ourselves on eliminating construction risk for everyone who collaborates with us, whether as a co-investor or a client.

Are Modcity builds warrantied?

We offer a warranty matched to Tarion standards (1-, 2- and 7-year coverage), providing peace of mind long after construction is complete and the units become occupied.

1-Year Warranty: Covers workmanship and materials, including plumbing, electrical, and HVAC.
‍2-Year Warranty: Covers building systems and water penetration issues, plus code compliance.
‍7-Year Warranty: Covers major structural defects affecting the home’s integrity.

Modcity Construction Ltd. is a licensed builder, in good standing since initial registration, with the Home Construction Regulatory Authority (HCRA) in accordance with the Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.31 and the regulations promulgated thereunder; the New Home Construction Licensing Act, 2017, S.O. 2017, c. 33, Sched. 1, and theregulations promulgated thereunder, and any other applicable legislation and/or regulations.
‍
Learn more about Tarion warranty coverages here.

Do I need to pay development charges for a multiplex?

As of June 2025, landowners can build a fourplex or sixplex, along with a garden or laneway suite, while being fully exempt from development charges. This exemption is a key factor in the profitability and financial feasibility of these projects. Fourplexes are permitted as-of-right across all Toronto wards, while sixplexes are allowed as-of-right in the eight Toronto and East York Community Council wards (Wards 4, 9, 10, 11, 12, 13, 14, and 19) and Scarborough North (Ward 23).

This regulatory change can save a multiplex developer up to $315K* in fees for a single lot, which contributes directly to profit and significantly enhances project feasibility while the development charge waiver remains in effect. We strongly recommend taking advantage of these favorable policies while they remain in place.

*A 3-bedroom unit would incur approximately $45,000 in development charges, equating to about $225,000 for a 4+1 project and $315,000 or more for a 6+1 development.

Why does Modcity exclusively do new-build rather than major renovations?

Modcity focuses exclusively on ground-up new builds for several reasons. In Toronto, where many homes are approaching a century in age, retaining legacy foundations, wall assemblies or utility services is unwise, as it introduces structural uncertainty, increases complexity, and raises the risk of cost overruns while compromising quality, all of which can lower appraisal values and lead to costly durability issues over time.

New construction provides a clean slate, enabling optimized interior layouts, higher ceilings, superior durability, and predictable execution from concept to completion. Total hard costs for new builds have consistently proven competitive with major renovations, typically around 10 percent higher at most, and can be cheaper in complex retrofit scenarios.

Lenders, appraisers, and tenants also prefer new builds, and landowners benefit from comprehensive new home warranties covering structure, mechanical systems, and finishes. For liquidity and resale, the price is substantially higher for a new build, with purchasers and investors who buy a complete building demanding a low-risk property.

Do I need to be an Accredited Investor to invest?

Any offer of an equity investment, if one is made, will only be made on a private placement basis, under an exemption from the requirement that Modcity prepare and file a prospectus with the relevant Canadian securities regulatory authorities. The equity investment will not be listed on any stock exchange and there is no primary or secondary market for such, nor is it anticipated that such market will develop. Any offer for investment of equity is being made in reliance upon one or more exemptions from the prospectus requirements under applicable securities laws, including, where applicable, the accredited investor exemption within the meaning of applicable securities laws.

Any investment is highly speculative and is only suitable for investors who have a long-term investmenthorizon and a high tolerance for risk in their returns and are prepared to risk the loss of their entire investment.

Toronto’s LEADING MULTIPLEX developer.

OUR FOUNDING MISSION

COMPANY METRICS

As-Completed Asset Valuation

Committed Capital

Number of Buildings in Portfolio

Rental Units in Portfolio

Feature Projects

Interested in Investing With Modcity?