One Canadian province has cracked the affordable housing nut by guaranteeing loans to non-profit housing providers and the Australian industry wants a similar mechanism here.

The 30-year-old BC Housing has channelled nearly $C3 billion-worth ($3.13 billion) of private sector funding to 800 community housing organisations, chief executive Shayne Ramsay said on Tuesday.

The provincial government body funds construction and then mortgages the completed buildings – covered by a federal government mortgage insurance scheme – to private sector lenders.

"The most powerful tool to create affordable housing": Shayne Ramsay speaks about getting private funding into affordable housing on a panel with Carolyn Whitzman, left, Janice Abbott and Nathalie De Vries. Pat Scala

"When those mortgages are placed, the banks, credit unions and insurance companies are all eager for that kind of product because it comes with the federal paper attached to it," Mr Ramsay said after a panel discussion at Melbourne University. "It's probably the most powerful tool to create affordable housing next to land."

Australia is still trying to find a way to match large-scale private lending with the lower-margin, but lower-risk, affordable housing market. The need is there – the lowest-earning 40 per cent of households suffered a lack of affordable and available housing in 2013, according to the former National Housing Supply Council in 2013 and the shortfall, put at 539,000 properties two years ago, has likely worsened in the current housing boom, said Adrian Pisarski, the executive officer of National Shelter, a peak body advocating for more affordable housing.