For the Summer of 2012, the Canadian Home Builders’ Association has released a brief titled Ending the Discriminatory Tax Treatment of New Purpose-Built Rental Housing.  CHBA argues that new rental construction is far below the level required to meet Canada’s projected demographic requirements.  The surging demand for rental housing combined with low volumes of rental construction will lead to extremely tight rental markets in communities all across the country. 

The CHBA recommends several tax reform measures to enhance the appeal of purpose-built rental housing projects, asserting that the federal government must end the discriminatory tax treatment of private purpose-built rental housing. 

The Canadian Homebuilders Association of BC is one of the founding members of the Canadian Rental Housing Coalition.  Add your voice along with CHBA BC and many other stakeholders from local government, the development and real estate industries, non-profit groups, tenant rights organizations, and rental managers  by endorsing our Charter. 

Ending the Discriminatory Tax Treatment of New Purpose-Built Rental Housing

The Resolution Foundation in collaboration with The Royal Bank of Canada has developed a model for debt and equity investment in purpose-built rental housing.  Their July 2012 report, Making Institutional Investment in the Private Rented Sector Work, sets out an approach to developing purpose-built rental housing that could attract institutional investors, such as pension funds and life insurance companies.  The report lays out the model and identifies the various policy changes that would be required to support such an initiative.   Registered Providers (non-profit and for profit housing providers) are identified as having a critical role to play in kick starting this institutional investment. 

This approach could be a potential solution to the pending crisis posed by expiring social housing operating agreements across the country over the next 20 years.  Given the many similarities between Canada and the UK, such a scheme could be adapted to the Canadian context.  In fact, a recent report by the City of Vancouver Mayor’s Task Force on Housing Affordability mentioned working with pension funds and private financial institutions to finance and develop purpose-built rental housing. 

Resolution Foundation Reports:

Making Institutional Investment in the Private Rented Sector Work
Making a Rented House a Home: Housing Solutions for ‘generation rent’

Related Media Articles:

Group of housing associations modelling build-to-let returns
Social housing REIT edges nearer
Mencap housing arm to issue first tranche of £30m bond next year

Metro Vancouver Rental Inventory and Risk Analysis is a study that was recently completed by Metro Vancouver showing about 7,000 rental units or about 14% of the pre-1980′s private rental stock outside the City of Vancouver is currently at risk of redevelopment.  This number is projected to rise to nearly 25% in the next decade.   The study builds on the findings of a 2009 City of Vancouver study showing about 12% of Vancouver’s rental stock at risk without the protection of the ”rate of change bylaw” that prohibits loss of rental stock in designated neighbourhoods.  The Metro Vancouver report provides an inventory of the purpose-built rental stock in the region and a case study analysis of the degree to which older rental buildings are at risk now and in ten years in six municipalities .

A healthy housing sector that meets the needs of Canada’s diverse population is critical to both the economic and social wellbeing of Canada’s communities.  While renters make up one-third of the population, rental housing is too often overlooked as a component of Canada’s housing system.  No Vacancy: Trends in Rental Housing in Canada, a report prepared by FCM using their Quality of Life Reporting System takes a look a current trends in rental housing and homeownership in communities across the country.  The report provides insight into various initiatives introduced in communities across Canada designed to stimulate investment in purpose-built rental and affordable housing.   The report concludes by offering three options for the federal government to adopt that will stimulate investment in the rental housing market:

1. The Building Canada Rental Development Direct Lending Program to stimulate investment in new market-priced rental units

2. The Rental Housing Protection Tax Credit to preserve and stop the serious erosion— through demolition and conversion to condominiums— of existing lower-rent properties.

3. The Eco-energy Rental Housing Tax Credit to improve the quality of the rental stock; reduce high utility costs for tenants; reduce emissions and environmental impact; and increase resale and future rental value to landlords.

FCM Press Release: More Canadians find “no vacancy” when trying to rent, says FCM report

Full Report: No Vacancy: Trends in Rental Housing in Canada