By Mark Kenney and Sam Kolias
The federal government has embraced a robust suite of measures to spark new home construction, and as officials consider next steps to tackle the crisis, they must pursue a parallel line of attack just as important as new supply — ensuring the existing stock of affordable housing is protected and expanded.
The current shortage of social housing, combined with higher costs of renting and home ownership, have left more Canadians at risk of homelessness. Many people are being forced to sleep in tents this winter — and that is not acceptable.
A recent poll by Abacus Data found that almost 80 per cent of low- income renters are worried about their ability to pay rent. An astonishing 57 per cent are worried about losing their home.
Some estimates show Canada is now short 4.4 million homes for people in housing need.
The unacceptable level of housing insecurity is why Canada’s five largest publicly traded residential REITs — responsible for 120,000 tenure-stable, purpose-built rental homes with more than half qualifying as affordable — have formed Canadian Rental Housing Providers for Affordable Housing (ForAffordable.ca) to collaborate on innovative solutions.
We are proposing a way to help quickly expand the affordable housing inventory: creating a new federal fund to enable non-profits, charities and community land trusts to acquire existing apartment rental properties and maintain rents at affordable levels indefinitely.
There is cross-spectrum agreement, from the National Housing Accord to the NDP and provinces such as British Columbia, that a housing acquisition fund is the best and fastest way to preserve affordable housing.
And we already have a good track record of working with non-profits. We see them as preferred partners.
By our calculations, a $1 billion fund, for example, could immediately preserve or create 10,000 much-needed units of affordable housing.
By comparison, new affordable housing units built from scratch can take three years or longer and come online at costs that are as much as three times higher — and not necessarily in the communities that need them most.
Such a fund would work to ease the crisis by helping non-proﬁts buy buildings with existing rents that are at or near affordable levels; the units could then be used for affordable housing at or below market rents. The federal government, through CMHC or another funding channel, would provide the initial equity of about a third of the acquisition price and traditional CMHC insured mortgage financing would provide the rest. The funding mechanism should allow the non-proﬁt buyer to maintain a reserve fund, ensuring the building is adequately maintained.
In turn, through such sales, for-profit owners would raise the capital needed to reinvest in other new construction projects, increasing Canada’s housing supply.
The remarkable simplicity of this plan is that most of these buildings are already located where the need is greatest: high-density neighbourhoods where public transportation and services are easily accessible.
It’s a clear win-win.
Canada’s rate of homelessness has increased along with inflation and the rising cost of living, with many people having to choose between food and shelter. An affordable housing fund would help tackle homelessness and also free up capital to be invested in new housing supply.
We’re pleased to see Housing Minister Sean Fraser shunning old-school thinking to address a housing crisis that is negatively impacting Canadians of all income levels. His outside-the-box approach breaks free of the traditional protocols and jurisdictional shackles that have led to unnecessary delays and — even worse — excellent housing development projects that just never get off the ground.
Cities such as Toronto — which just received $471 million in federal funding for more housing in high-density locations near transit — and the province of British Columbia, have already realized the potential for an acquisition funding program that creates permanent affordable homes owned by non-profits and Indigenous housing organizations. Toronto’s program guarantees units remain affordable housing for at least 99 years.
We hope the minister sees merit in bringing in a national program. It’s an innovative, inexpensive and efficient way to help people who need housing most — while unlocking capital to kickstart the construction of even more new homes down the road.
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The housing and affordability crisis has many root causes, including overly burdensome zoning bylaws and development charges and a lack of creative policy and funding from governments at all levels and of all party lines. It took years of neglect to get us here and it will take an all-hands-on-deck approach to solve it.
Mark Kenney is the CEO of Canadian Apartment Properties Real Estate Investment Trust. Sam Kolias is chairman and CEO of Boardwalk Real Estate Investment Trust
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