I’m live blogging today from a webinar on rental housing hosted by the Expert Community on Housing (ECOH) through Canada Mortgage and Housing Corporation. Anyone can join ECOH for free, and access these presentations and lots of other work going on across the country.
Michael Oram (Research Team, CMHC) finished a study of programs on rental housing across the country. Programs tend to focus on ownership (70%) compared to rental (30%). At the provincial level as well, there is a focus on ownership over renting. municipal governments focus almost evenly on rental, ownership, or programs that benefit both. Federal and provincial governments focus more on demand (80% of federal and 84% of provincial programs) compared to supply (20% and 11% respectively). Cities focus more on regulations and grants, compared to taxation, which is the main tool used by the federal government. While cities focus on regulation (33% of programs), provincial governments only focus 13% of their programs on regulation, mainly in tenant protection.
CMHC found that it was difficult to quantify the number of households affected by programs across the country. Non-taxation of capital gains on principal residences costs the federal government over $7 billion per year in lost revenue, while exemption from GST for certain residential rents costs just $2.4 billion. The most common types of programs in the rental space are rent controls and regulations on the demand side, and development grants, tax rebates, exemptions, rental replacement, and tenant relocation assistance on the supply side. But not all governments report on the impacts and effectiveness of these programs (number of households affected, number of units built).
Julia Markovich (Research Team, CMHC) summarized a study on eviction prevention undertaken by the Centre for Urban Studies at the University of Winnipeg. Main changes in the eviction landscape include:
- the drivers of eviction (from tenant-driven, such as addictions and mental health to landlord-driven, such as unique elements of the regulatory framework on renting)
- the scale of eviction (from single tenants/households to an entire building or group of buildings with tenants being evicted)
The regulations on tenant eviction and protection don’t reflect these changes in the eviction landscape. Mass evictions are common across many cities, not just the largest in the country, and there is a direct link between eviction and homelessness. Data gaps on both formal evictions and informal evictions are major barriers to effective eviction prevention. Data on evictions is now going to be linked to demographic data from Statistics Canada (the third Canadian Housing Survey) to help the researchers understand more who is being evicted and what the impacts are. This research is still ongoing with both quantitative and qualitative methods (more interviews with people with lived experience).
Creating new rental housing
Cailan Libby, Amanda Aube (Happipad Technologies Inc.) spoke about their new web-based platform to enable large-scale house sharing in BC and Alberta, which turns empty rooms into new housing supply. They aim to accelerate Canada’s transition to a shared housing society, because building new housing takes a lot of time, resources and labour, while using houses more efficiently can unlock almost 12 million empty rooms across the country. Older owners can stay in their homes while younger renters can save money. Owners register their homes and there is a background screening process and rental contracts. Happipad enables regular check-ins with landlords and tenants, move-out support, reviews and automatic rental payments. They work with community organizations like the Rural and Northern Immigration pilot project, who were matched with Canadian families for the first three months they were in Canada. Happipad wants to expand across Canada: students, seniors, and newcomers to Canada are their target households because they’re looking for housing for less than one year, and usually looking in areas where housing supply is scarce. Companion housing, connecting a senior with a like-minded person to share their home in the long term, is also a potential goal.
Irene Gannitsos (Vancity) has created a model to create low-cost loans for affordable rental housing. The Housing Accelerator Fund aims to provide nimble, flexible, and low-cost financing to the community housing sector for affordable housing development projects. They’re particularly interested in creating homes for people with incomes from $20,000-80,000. The Pre-Construction Equity Loan Fund was created to bridge a financing gap in the pre-development phase: non-profits lack capital and business plans in the early stages which prevents them from taking on new development projects–most available grants are in the construction stage. They cannot buy land which would enable them to unlock later stages of funding. The pre-development loans help fund rezoning and development processes, and are usually paid back within 2-3 years, while the pre-construction equity loan supports the building permit process, development of working drawings, usually repaid within 5-7 years post occupancy with first refinancing. The acquisition loan is used to support land acquisition, with repayment upon securing mortgage or first refinancing. At this point, 42 loans have been granted for a $18M total, with 4450 homes have been developed through the fund. Impact investors can also now invest in the program with a minimum investment of $250,000 and an interest rate of up to 3% per year.
Daniel Byrne (Main and Main developer) mainly develop market-rate housing, and mainly rental housing, including over 3500 new rental units in transit-oriented locations. We build substantially less housing today than we did in the 1970s, according to Statistics Canada data from the late 1940s to the present. The average household size has also declined from about six to just over two people, with the most common type of household being single-person. These two trends have combined to a “massive structural underproduction of housing in this country.” In Ottawa, a typical apartment costs about $500,000 to build, $700,000 in Toronto–and this is without a profit. It takes about four years to build a project, which means carrying costs for that time period.
Cheryl Krostewitz (Manitoba Non-Profit Housing Association) spoke about the organization’s mission. MNPHA represents over 100 non-profit associations (including service providers, housing providers, and others) who manage over 24,000 units in Manitoba. The non-profits had to lobby to keep housing units that were formerly owned and managed by Manitoba Housing in community hands.
Preserving existing rental housing
Graeme Stewart (Centre for Urban Growth and Renewal, York University) noted that there were 700,000 purpose-built rental units in Canada the 1970s. These buildings are now reaching the end of their lives and undergoing comprehensive retrofits, for example $1 billion retrofits of Toronto Community Housing units. They aim to make the retrofit process as smooth as possible, including setting annual retrofit targets, establishing demonstration centres, holding a cross-Canada retrofit forum, repeating passive housing technologies, and making a national impact through this work.
Judy Tobin (City of St. John’s) offers 476 units of affordable housing to people with a fixed or low income. The City implemented an affordable housing business plan. Half of their waitlist is for one-bedroom RGI units, while the lowest demand is for 3- and 4-bedroom units. This stock has to be able to be retained, and the City partnered with a seniors’ housing organization to provide transitional housing for seniors in several these units, and an organization for women fleeing violence to house four women in these units. All the City’s units are heated with electric heat, and they have gotten Newfoundland Energy to install digital thermostats, sprayed insulation into some units, and installed energy-efficient light bulbs. They’re also getting energy audits done for some of the units. The City has also identified three sites for affordable housing, and is seeking partnerships now.
Hans Kogel (Windsor Essex Community Housing Corporation). WECHC owns and operates over 4700 low income and market units. The average of their assets of 50 years old, and the buildings are worth about $110 million. He discussed a deep energy retrofit project done with CMHC with the tenants in place (none were displaced): the project reduced energy costs from 40-70%. The best components to replace, with the most impact, are heating and air conditioning and building envelope components. One project, a 47-year old unit with 97 units in Windsor, had major issues with the building envelope. Four phases of retrofitting included replacement of balcony doors, windows, exterior finishing system, balcony and perimeter insulation, through wall A/C units, stairwell and elevator machine room ventilation, and HVAC, elevator, and lighting installation. The process has to be completely comprehensive, rather than piecemeal. Each phase had different funding, but the total cost was $50M. The overall annual energy consumption was reduced by 65%, annual GHG emissions were reduced by 64%, and energy use intensity by 65%. They noted that they had a high level of planned tenant communication focused on small groups vs. the entire building, hands-on resources to interact with and assist tenants, and a designated person to facilitate the project solely focused on tenant interaction and communication. Cleaning staff needed to clean the work areas in units and common spaces on a daily basis, work in tenant units had to be highly structured and documented because otherwise there would be multiple entries to a tenant’s unit, and they needed an experienced deep energy retrofit manager.
David Wachsmuth (Associate Professor, McGill University) spoke about his research on the impact of short-term rentals on Canadian housing. For example, in Montreal, pre-pandemic about 5000 units were being rented out on either AirBNB or VRBO, and they were very concentrated in a couple of neighbourhoods. That dropped by two-thirds during the pandemic, when a lot of short-term units were returned back to the long-term market (e.g. in Toronto about 3500 units were returned to long-term). The short-term units in Toronto were asking about 20% higher rents, and there was a 15% decline in these rents over the past two years as they returned to long-term. Regulatory options that work are limiting STRs to primary residences only and requiring licensing (which the City of Vancouver did, which worked to bring about 500 units back into the long-term market).