Purpose-built rentals are increasingly supported by various levels of government in a bid to address housing affordability.
And it appears investors are buying in.
According to the Canada Mortgage and Housing Corporation, investors – either individuals or corporations – own 90% of purpose-built rental units in Canada.
“Purpose-built rental buildings are an important part of the rental supply in Canada, especially in urban centres where they house slightly more than half of households who rent,” Gustavo Durango, senior economist at CMHC, said. “While individual investors and private corporations own the bulk of these buildings, it’s interesting to note that these groups are not evenly represented across major markets.”
The Crown Corporation recently released a report entitle “Rental Ownership Structure in Canada,” which is part of its efforts to address “data gaps” in the housing industry.
The report also found units owned by individual investors tend to have lower rents than those owned by corporations.
Another interesting note discovered in the study: Homegrown investors own the overwhelming majority of purpose-built rentals, with foreign ownership accounting for 2.4%.
For its part, Ontario is encouraging developers to support purpose-built rentals through two measures outlined in its recently-released Fair Housing Plan.
Those include ensuring that property tax for new multi-residential apartment buildings is charged at a similar rate as other residential properties -- which is meant to encourage developers to build more new purpose-built rental housing -- as well as a $125 million five-year program aimed at encouraging purpose-built rentals.
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