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Throughout October UrbanToronto is featuring a special State of Housing editorial series to examine the pressing housing challenges facing Toronto and the Greater Golden Horseshoe.
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Toronto’s housing market is clearly at a crossroads, with a recent CMHC report situating the city at “the epicentre of weakness for residential construction in the first half of 2025”. Across the GTHA region, developers and policymakers are searching for solutions that will accelerate the delivery of new housing while improving quality and long-term value.
The rapid adoption of geothermal as a proven alternative to gas for heating and cooling across all building types is playing an important role as various levels of government work with developers to construct living spaces. Once viewed as niche, over the past decade geoexchange HVAC systems have rapidly evolved into a mainstream infrastructure choice aligned with the urgent need to build smarter, faster, and more livable communities across the region and the nation.
Diverso Energy’s joint venture project with Mattamy Homes at Upper Joshua Creek in Oakville is proving that fully electrified, zero-gas subdivisions can be built at scale—without adding cost compared to traditional builds. This transformative model is elegant in its simplicity: each home has its own geothermal borehole, enabling it to be scaled quickly across entire communities.
“When you simplify geothermal into a repeatable, lot-by-lot model, you remove the biggest barriers for developers: financial viability and complexity,” explains Tim Weber, CEO of Diverso Energy, whose pioneering EaaS model allowed it to become the leading geothermal utility in Canada. “With Mattamy, we’ve shown that zero-gas homes can be delivered cost-effectively, while enhancing the homeowner experience with no outdoor AC units or furnace venting—allowing for more usable backyards and improved safety by eliminating carbon monoxide risks.”
Beyond Low-Carbon: Enabling Better Design
Geothermal is also providing a path forward for the stalled condo market. For years, much of the activity was driven by investors, but architects and planners now see a shift toward end-users and buyers who prioritize amenities that support a variety of lifestyles and family needs. In this environment, geothermal stands out not just for its sustainability credentials but for its capacity to transform building design itself.
Freed from the noise and space demands of traditional HVAC, architects are reimagining rooftops with private patios, gardens, and social spaces. Residents benefit from more reliable utility costs, while developers can differentiate their projects in a market where people are in search of distinct living spaces, not investment properties.
At The Plant in Toronto’s Queen West neighbourhood — a Windmill Development Group project — geothermal helped extend that design philosophy beyond sustainability. The mixed-use, mid-rise condo incorporates urban agriculture, green roofs, and energy-efficient systems to foster healthier, more connected living. The geothermal installation eliminated the need for noisy rooftop condensers, freeing up space for gardens and communal resident amenities that reinforce the project’s people-first ethos.
Jenny McMinn, Partner, Communications & Impact at Windmill Development Group, says the current transition is also changing how developers and policymakers think about housing as an investment.
“In an environment where affordability dominates the conversation, we need to think beyond short-term costs and start treating housing as a long-term asset. Systems like geothermal deliver higher performance over time in terms of comfort, stability, and quality of life. Whether you’re a homeowner, a landlord, or a government agency managing public assets, geothermal simply holds its value better.”
McMinn points to 2444 Eglinton East—one of the province’s largest affordable housing developments in the past 25 years— as a prime example of that ethos in action. The co-op will provide long-term rental housing that will be owned and operated by residents on a non-profit basis, meeting TGS V4 Tier 2 standards without compromising affordability.
Government initiatives like the Apartment Construction Loan Program (ACLP), supported by CMHC for new rental construction, are also seen as vital in addressing the residential shortage. Supporting faster construction starts, new-build rentals are scored on a point-based system, based on several criteria including affordability, energy efficiency, and accessibility. Geothermal, as a CMHC-approved solution, is enabling delayed projects to start while offering developers immediate NOI benefits. Geothermal’s reduced mechanical equipment requirements translate into energy savings, lower maintenance costs, and capital reserve savings.
In the end, Canada’s housing crisis won’t be solved by one type of building. The need spans low-rise subdivisions, townhomes, and high-rise rental communities alike. Geothermal’s versatility makes it one of the few infrastructure solutions that is genuinely building-agnostic.
“From a developer’s standpoint, geothermal stands out because it’s predictable and repeatable across building types and climates,” says Bram Atlin, Principal at Smith + Andersen, whose firm has been designing geothermal for decades and worked on both Windmill projects. He says the technology is now “table stakes” when developers seek his engineering expertise, asking for the best mechanical system for new projects. “You know exactly what you’re getting — lower operating costs, stable performance, and fewer moving parts. In a market where certainty and cost control matter more than ever, that’s a real advantage over systems restricted by location, geographical climate, building size, or high maintenance needs.”
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UrbanToronto's research and data service, UTPro, provides comprehensive data on construction projects in the Greater Golden Horseshoe—from proposal through to completion. Other services include Instant Reports, downloadable snapshots based on location, and a daily subscription newsletter, New Development Insider, that tracks projects from initial application.
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Thank you to the companies joining UrbanToronto to celebrate State of Housing Month.
