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The project, to cost at least $10 billion (US$7.8 billion), is at a scale never before seen in Canada, both in its size and speed. And it’s raising questions about whether or not the country will be able to address its affordability problem before it’s too late.

At stake, proponents say, is the continued growth of Canada’s biggest cities. Last year, Toronto ranked first in UBS Group AG’s annual list of major cities worldwide with the greatest risks of a housing bust. That has made even property developers who have reaped big profits fretful that critical workers will be priced out of housing.

“If we don’t deal with this issue of housing, we’ll hit a ceiling where we can’t expand that sector of the economy that we desperately need,” said Ian Gillespie, chief executive officer of Westbank Projects Corp., who spearheaded the project and recruited Allied Properties Real Estate Investment Trust to help.

Fraught Issue

Building affordable housing can be fraught. Major cities, notably San Francisco and New York City, continue to grapple with a scarcity, even after spending billions of dollars to develop more. The median sale price of a house in San Francisco reached a new high of US$1.6 million in the first quarter, according to Paragon Real Estate Group.

The Canadian plan, run by a new nonprofit called Creative Housing Society, proposes to build units aimed at people with median annual income between $40,000 to $100,000, who would spend less than 30 per cent of their household income before tax on housing costs.