A recently released report by the Federation of Canadian Municipalities (FCM) has called for increased investment in rental housing markets across the country in the upcoming federal budget.
According to president Berry Vrbanovic, the FCM is an organization that represents Canada’s cities and communities within the federal-municipal relationship in matters of policy and programs.
“We know that one-third of Canadians are renters, and we also know that over the past 15 years only about 10 per cent of new (housing) construction has occurred in the rental housing market,” he explained.
According to Vrbanovic, this disproportion is largely due to low interest rates and a general focus on home-buying and condo-building over the last decade and a half.
“What we’re suggesting is that all orders of government really need to work together to lower investment barriers to new rental housing,” he said.
The report calls on the federal government to intervene by providing low-interest loans to finance new rental construction, offering energy-efficiency incentives to lower rental costs and making changes to the tax system that would prevent the demolition of existing rental housing.
“Right now, some rental housing stock gets demolished because single-family-owned properties or condos actually get taxed at a different rate,” said Vrbanovic.
Vrbanovic explained that the FCM believes that the present time is ideal for federal investment in rental housing, as mortgage accessibility is expected to decrease in the coming years.
“(These predictions suggest that) people won’t be able to purchase new homes or new condos as much anymore,” he said. “Therefore, we’ll need a solid supply of good-quality and affordable rental housing (to compensate).”
Beyond simply increasing rental housing stock, Vrbanovic also said that offering incentives to rental developers would provide increased employment opportunities for those involved with construction, contributing to economic cyclicality.
“We’re hopeful that on budget day we’ll see (the federal government) make a commitment going forward in this regard,” he added.
The media-communications staff of Denis Lebel, the federal Conservative government’s minister of transport, infrastructure and communities, declined to provide a statement on the matter.
Gordon McIntyre, coordinator for the Winnipeg Rental Network, a non-profit online rental market database for tenants and renters, said the FCM’s negative assessment of Canadian rental housing markets is correct - particularly with respect to Winnipeg’s, which he described as “stagnant.”
“We’re losing rental housing stock - particularly affordable (rental) stock,” he said. “It’s becoming a crisis point for a lot of individuals and families.”
McIntyre also supported the FCM’s notion that rental housing markets will only be improved via federal intervention.
“Part of the big problem is that providing affordable housing is just not profitable business,” he said. “It’s extremely difficult to build anything and to keep it affordable. There needs to be incentives for the private sector.”
Fortunately, renters in Winnipeg and across the country won’t have to wait much longer to have their fates revealed. The federal government is set to announce its austerity budget on March 29.
Published in Volume 66, Number 23 of The Uniter (March 14, 2012)