In 2024, the University Health Network opened Dunn House in Toronto's Parkdale neighbourhood: 51 homes for people who had been homeless, with health care and support services on site. Less than two years later, the hospital network reported that residents' emergency department visits had fallen 52% and their hospital length of stay 79%, saving about $2.1 million in hospital costs.[1]

On October 1, federal, municipal and hospital partners announced the next phase.[1] The money involved is modest by housing standards. What's significant is the argument behind it: that a hospital can justify investing in housing because of what it saves in acute care.

What was announced

The federal government said Build Canada Homes will provide $25 million to support about 80 supportive homes at the first of three new sites. The UHN Foundation is contributing $20 million and the City of Toronto $19 million.[1] The City's additional funding and incentives, valued at about $27 million, still need council approval, and the federal money is subject to due diligence and final agreements.[1]

Across three sites, UHN and the City aim to add about 200 supportive homes for people experiencing homelessness with complex health needs. That would take the Social Medicine Housing Initiative to more than 300 homes in total. The first new site will be near Toronto Western Hospital.[1]

This follows Spring House, a second phase for which Build Canada Homes committed nearly $22 million. Delivered by CreateTO, the City's real estate agency, it will provide 54 supportive homes for seniors experiencing homelessness and is expected to break ground in late 2026.[1]

How the model works

The model treats housing as a social determinant of health. It combines deeply affordable homes with primary care, mental health and addiction services, and other supports on site.[1] UHN's Dr. Andrew Boozary, who leads the hospital's Gattuso Centre for Social Medicine, summarized the logic directly: when people moved from the street or shelters into housing, emergency visits fell by more than half and hospital bed days by nearly 80%.[1]

UHN's CEO, Dr. Kevin Smith, called it a made-in-Canada approach to "prescribable housing."[1] The phrase captures the idea: a hospital treating housing as part of care, rather than as something outside its remit.

Why this matters for capital

Supportive housing has always struggled with one financing problem. The capital cost is significant, and residents can't pay rents that cover operations, let alone debt. Traditional funding relies on government grants plus ongoing operating subsidies, both of which compete with other priorities.

The Social Medicine model adds a third source of value: measurable savings in the health system. That changes the conversation in a few ways:

  1. New funders. Hospital foundations and health-system budgets become possible contributors, alongside housing programs. The UHN Foundation's $20 million is an example.
  2. Outcome data. Savings figures, if they hold up at larger scale, give funders a way to compare housing with other health spending.
  3. Blended structures. With federal, municipal, hospital and philanthropic money in the same project, each partner covers part of the cost based on the benefit it gets.

For private investors, the direct opportunities are limited. These are non-market homes. But the approach is relevant to anyone involved in social finance, impact investing or public-private housing partnerships, where showing measurable outcomes is increasingly part of how projects get funded.

Cautions

A few limits are worth keeping in mind. The early results come from one building with 51 residents over less than two years.[1] Results may change as the model expands to more sites and different groups of residents. Hospital savings don't automatically flow back to the housing operator, so long-term operating funding still depends on agreements among partners. And the federal and City funding announced on October 1 is not yet final.[1]

The bigger picture

This announcement came about two months after the federal-Toronto partnership for more than 5,600 rental homes, which included supportive and affordable units on City land.[1][2] Together they show federal housing money being spread across the whole range of need, from market rentals financed with low-cost loans to supportive homes tied to hospital care.

If the Social Medicine results hold at larger scale, they could change how supportive housing is funded across Canada. The test is whether 300 homes produce the same results as the first 51.

Sources

[1] Build Canada Homes announces expanded partnership to advance supportive and transitional housing in Toronto, Housing, Infrastructure and Communities Canada (Oct. 1, 2026): https://www.canada.ca/en/housing-infrastructure-communities/news/2026/10/build-canada-homes-announces-expanded-partnership-to-advance-supportive-and-transitional-housing-in-toronto.html

[2] Government of Canada and City of Toronto partner to build thousands of new rental homes, Prime Minister of Canada (Aug. 5, 2026): https://www.pm.gc.ca/en/news/news-releases/2026/08/05/government-canada-and-city-toronto-build-thousands-new-rental-homes