The “financialization” of the country’s rental stock is contributing to Canada’s housing affordability crisis, says the federal housing advocate.
Marie-Josée Houle told the House of Commons Standing Committee on Finance on Thursday that 20 to 30 per cent of Canada’s rental housing stock is owned by institutional investors.
“First of all, the financialization of housing and the negative effects (must be dealt with). And the government must address that situation,” Houle said.
“Secondly, the protection of renters must be a priority. And finally, the government must invest in increasing housing availability across the market.”
Houle’s comments come as new data shows rental prices hit record highs in January, hitting almost $2,200. That’s a 10 per cent increase from a year before, a Rentals.ca report stated.
She said that while the problem of big investors snapping up rental real estate began in the ’90s, it has gotten worse lately.
“It’s not new that these buildings are privately owned. But what is new is that they’re owned by large institutional investors whose obligation is maximizing returns for shareholders.”
Houle said the federal government needs to put in place financial regulations that prevent such groups from acquiring buildings.
She wants to see tax reforms to make rental real estate less profitable, and for Ottawa to prevent banks from financing the “acquisition of buildings if the building plan relies on excessive rent increases or evictions.”
She said the federal government needed to put in measures to stabilize rent to protect those who were “one rent increase away from homelessness.”
“Financialization is contributing to housing unaffordability and violating people’s human rights.”
Houle’s testimony came two days after her office released a report that calls on the federal government to create a National Encampments Response Plan that recognizes Canada’s human rights obligations and commits resources to ending chronic homelessness.
Speaking to Global News, Houle said her review of encampments across Canada revealed that the problem was not just limited to the big cities.
“I found that this is a national crisis, that there’s no place that’s immune. It’s not just a big urban centre issue. It is one that is found everywhere across the country, including the most remote places and in the far north.”
She told Global News, “We need to see the end to forced evictions because they never work. This top-down approach has to stop.”
She said that in the long run, shelters cannot be the only solution and that Canada needs more non-market housing, which refers to housing provided for low and moderate-income groups not traditionally served by the private market.
“It’s really important to consider the role of non-market housing. Only four per cent of the rentals in Canada are non-market and they are valuable,” Houle said.
Last week, Houle met with Housing Minister Sean Fraser and Indigenous Services Minister Patty Hajdu to brief them about the report. She recommended that the federal government establish a National Encampments Response Plan by Aug. 31 this year.
She said there exists now a “patchwork” of responses across the country instead of a coordinated response. She said only the federal government could bring different stakeholders to the table.