More Rental Housing Needed

The Federation of Canadian Municipalities (FCM) recently released a report that suggested Canada’s economic recovery hinged on the need for more rental housing. The FCM report suggested the federal government lower barriers to investing in order to sustain the country’s economic recovery.

Berry Vrbanovic, FCM President said, “To keep our economy growing when fewer Canadians are able to buy new homes, we need to make it easier to invest in and expand the rental housing market. New rental construction will give cash-strapped young families, new immigrants, and an aging population housing options they can afford, and protect construction jobs as governments turn off the stimulus taps.”

According to the report, Canadians are facing high personal debt loans, tighter mortgage rules and an uncertain economic future, which impedes the ability for Canadians to buy new homes. As a result, new home starts in Canada have declined and Canada’s housing sector is producing 50,000 fewer construction jobs than in 2007. 

Investing in housing is one of the most effective ways to create jobs and boost economic activity, according to the federal Department of Finance. In order to experience growth, the renal market must overcome systematic barriers. The condo-building and home-buying boom has increased land prices so high that new residential construction has been pushed out. Rental housing only accounts for 10 per cent of new residential construction in the past 15 years, despite one-third of Canadians being renters. The number of rental units across the country decreased between 2001 and 2006, namely due to the demolition and conversion of rental properties. 

“Municipalities are doing their part to increase and preserve the supply of rental and affordable housing, providing tax exemptions, streamlining approvals and exploring alternative development standards, but we can’t do it alone,” notes Brampton mayor and co-Chair of the Big Cities Mayors Caucus (BCMC) Advocacy Working Group on Housing, Susan Fennell. 

The report, The Housing Market and Canada’s Economic Recovery, calls on the federal government to provide low-interest loans to finance new rental construction; provide incentives to lower rental costs through energy efficiency and reform the tax system to prevent the demolition of existing rental housing.