More rental housing needed to protect jobs and economy - Federal Government Must Lower Rental Investment Barriers, says FCM report (31/01/2012)
To keep Canada's economic recovery on-track, the federal government must lower barriers to investing in Canada's stagnant rental housing market, said the Federation of Canadian Municipalities (FCM) in a report released today at a press conference held in Ottawa.
"To keep our economy growing when fewer Canadians are able to buy new homes, we need to make it easier to invest in and expand the rental housing market," said FCM president Berry Vrbanovic at the report's launch. "New rental construction will give cash-strapped young families, new immigrants, and an aging population housing options they can afford, and protect construction jobs as governments turn off the stimulus taps."
Facing tighter mortgage rules, high personal debt loads, and an uncertain economic future, fewer Canadians are in a position to buy new homes than before the global recession. As a result, new home starts have declined and Canada's housing sector is producing 50,000 fewer construction jobs than in 2007.
According to the federal Department of Finance, investing in housing is one of the most effective ways to create jobs and boost economic activity. But the rental market must overcome systemic barriers to growth. A decade-long home-buying, condo-building boom has pushed land prices so high that new rental construction has been crowded out. One-third of Canadians are renters, yet rental housing has accounted for just 10 per cent of new residential construction over the past 15 years. Due to the demolition and conversion of rental properties, for the first time the number of rental units across Canada actually decreased between 2001 and 2006.
"Municipalities are doing their part to increase and preserve the supply of rental and affordable housing, providing tax exemptions, streamlining approvals, and exploring alternative development standards, but we can't do it alone," said Susan Fennell, Brampton mayor and co-Chair of the Big Cities Mayors Caucus (BCMC) Advocacy Working Group on Housing.
FCM's report, entitled The Housing Market and Canada's Economic Recovery, is calling on the federal government to provide low-interest loans to finance new rental construction; reform the tax system to prevent the demolition of existing rental housing; and provide incentives to lower rental costs through better energy efficiency.
