How to tackle the financialization of purpose-built rental housing
Statement to the “Review Panel on the Financialization of Purpose-Built Rental Housing,” during the October 24, 2023, oral hearing session.
Good afternoon. My name is Sam DiBellonia, and I lead work on housing policy at Maytree, a private foundation dedicated to advancing systemic solutions to poverty through a human rights lens.
At Maytree, we believe that our economic and social systems can both contribute to, and help solve, policy challenges that inhibit the enjoyment of human rights. It’s in this spirit that my comments today focus on the broader environment that has allowed for rental housing to be treated as an asset class.
First, it’s important to consider how the federal government’s actions have contributed to this situation. This includes transferring most of the responsibility over social housing to the provinces, and the inability of many National Housing Strategy programs to create and protect affordable rental housing.
With such high demand for rental housing, actors like those who are financialized have filled in the gap left by government. As you will know, it’s been estimated that real estate investment trusts own about 10 per cent of purpose-built rental housing units. Statistics Canada data also shows that in 2021, condos made up nearly 40 per cent of occupied housing in Canada’s primary downtowns, half of which were rented out by investors.
Highlighting these trends isn’t meant to point the finger at certain housing actors, but to shed light on a system that doesn’t prioritize affordable rental housing for tenants, which is key to realizing the right to adequate housing. This is made evident by census data, which shows that the stock of private rental units affordable to people with lower incomes declined by just over 322,000 units from 2011 to 2016.
Furthermore, many provinces don’t have legal limits on rent increases when a tenancy ends and a new one begins, sometimes called vacancy control. Without such measures, landlords may be financially encouraged to evict tenants, compromising their security of tenure. This is another key element of the right to adequate housing.
Complicating this picture is the lack of public data on who owns and does what in rental housing. Currently, we rely on one-off reports, like those prepared for the Office of the Federal Housing Advocate on the practices used to maximize profits by some financialized landlords.
We’ve also seen media reports on more landlord filings to raise rents above guidelines in Toronto, Stats Can data on tenant-reported evictions, and CMHC data on average rents. But more needs to be done. There isn’t any formal reporting mechanism of the actions of landlords, or a comprehensive dataset that we can use to better understand what’s happening.
Taken together, it’s clear that affordable rental housing in Canada operates in a system where investor interests are prioritized over tenant needs, compromising affordability and security of tenure.
But the federal government is well-positioned to address this issue by following the framework created by the National Housing Strategy Act (NHSA). The NHSA not only recognizes the right to adequate housing but requires the government to further its progressive realization by taking all appropriate measures to do so. The NHSA also requires the government to focus on improving housing outcomes for people in greatest need.
Guided by this rights-based framework, Maytree’s submission and my comments today close by calling on the National Housing Council to recommend that the federal government act in three main areas:
- Increase the supply of affordable rental housing. This means investing in deeply affordable housing programs, creating a strategy to acquire rental housing from the speculative market, providing more funding to non-profit housing providers who may provide housing at lower rents, and by using public lands to build new housing.
- Since these actions will take time to implement, the government should also improve supports for lower-income renters. This means increasing the level and reach of the Canada Housing Benefit, working with other governments to improve income- and tenant-related supports, and encouraging other governments to implement stronger tenant protections like vacancy control.
- Lastly, the government should strengthen oversight of the rental housing system. This means working with data partners to close data gaps on rental housing ownership, and by developing a framework to monitor how their actions may impede or advance the right to adequate housing.
In closing, I’d like to thank you again for the opportunity to appear today. I welcome any questions from the Panel about my remarks or Maytree’s submission.