Working together to make housing affordable
Canadian rental providers are proudly investing in Canada and Canadians
Emerging from the housing crisis
Canada is beginning to emerge from our worst housing supply and affordability crisis in a generation. Joining hands, the federal, provincial, territorial and municipal governments, the private sector, and civil society have shown what we can do when we put our heads and our hearts together to meet the needs of Canadian families and communities.
Several steps have been taken that are beginning to bring housing affordability for Canadians closer to reality:
Apartment rents have dropped and continue to drop
Apartment Supply is up and rising
Apartment investment and construction are up
Inflation is moderating and interest rates are down
Some Federal taxes on apartments have been dropped, including the waiver of the GST/HST on new purpose-built rental apartments, and the reintroduction of the 10% accelerated capital cost allowance
More low-cost financing options are available, especially through the revised Canada Mortgage and Housing Corporation (CMHC) MLI Select Program
Overly restrictive zoning regulations are gradually being loosened. The Federal Housing Accelerator Fund, for example, is simplifying zoning codes and rezoning processes
The federal government has also set affordable housing as a nation-building priority through the creation of Build Canada Homes (BCH). The Agency’s mandate to marshal flexible financing, federal land access, and development expertise to develop affordable housing and to scale modular housing production could be an affordability changer, if smartly run.
Key to this success is a robust purpose-built rental housing sector that allows Canadians to secure suitable housing as their requirements change — from when they move to a new city for work or need an extra bedroom for a baby on the way, to wanting to downsize inretirement. Without adequate rental housing, the overall market cannot function properly.
Achieving housing affordability is the next big step
Housing affordability is Canada’s next big challenge.
The Canada Housing Benefit needs to be substantially enriched to put more money in the hands of families who need it. Development and infrastructure charges, property taxes and other taxes remain too high. More incentives are needed for reinvestment in purpose-built rentals and to encourage the sale of existing rental properties to community housing providers.
CMHC’s MLI Select program needs further reform. And we need smart, stable immigration policies that promote higher productivity and economic growth, and to address accelerating construction skills shortages.
Just the Facts
Learn the facts about how residential REITs work and the high-standard of service and support we provide to our residents.
Residential REITs own less than 6% of the purpose-built rental stock, and less than 3% of the total rental market in Canada. The majority of residential rental property in Canada is owned by small landlords.
Residential REITs are majority owned by small private investors – individuals, many of whom are retirees, who rely on their investment to help make ends meet in their sunset years.
Every rental apartment building is and always has been an investment, whether it’s owned by an individual, a company, a pension plan, a social housing provider or a residential REIT. Investment is required to build and maintain all rental properties.
Rent control laws and administrative caps are in place for over 80% of all rental apartments in Canada. Our rent increases comply with these rules
After paying for operating expenses, 100% of the income of a residential REIT is distributed to owners: most of whom are regular Canadians saving and paying for retirement. That income is then taxed through income tax at the owners’ own marginal rate - just as if they owned a rental property directly. If any income is not distributed to owners, the residential REIT pays the highest marginal tax rate: approximately 53%. Ultimately, the overall tax contribution from a real estate owner, either as an individual property owner or a residential REIT unitholder, is approximately the same.
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