In Winnipeg, decent, affordable low-cost housing is in short supply. Governments have increasingly played a reduced role in the provision of social housing. As a result, nonprofit organizations and municipalities are providing the bulk of new affordable housing units. However, their ability is threatened with reduced spending and little governmental support.This thesis provides an examination of the literature pertaining to nonprofit capacity. Furthermore, a summary of the policy environment, programs and organizations operating within Winnipeg is offered.Through key informant interviews, the capacity of Winnipegs nonprofit housing organizations was assessed. For the purpose of simplification, the complexity of capacity was compartmentalized into internal, external and output capacity.Through the empirical findings, it has been established that Winnipegs nonprofit organizations are facing challenges with internal, external and output capacities. However, it was determined that any lack in capacity directly corresponded to funding restraints.This thesis argues for the creation of a national housing program that would include increased funding for capital costs, flexible funding and increased rental subsidies to aid nonprofits in their mandate.