Latest news with #rentcontrol
CBC
13 hours ago
- Business
- CBC
Not-for-profits are racing to save affordable apartments. But critics say we should just build new ones
Social Sharing Marleny Ozuna Felix seems to have won the lottery of landlords. For as long as she stays in her building, the single mother of three has a guarantee that her home will remain affordable. She pays $964 per month for a one-bedroom apartment in Burnaby, B.C. — roughly $1,390 cheaper than the average rent for a unit that size in the area. Depending on the maintenance needs of the building, there will be years her rent doesn't increase. And in the years it does, it will never exceed provincial guidelines. When her building went up for sale, chances were high a for-profit landlord would purchase it, be it a small private equity firm or a large corporation whose focus is to make a return for investors. Instead, the new owner is Aunt Leah's Properties, a not-for-profit organization whose main objective is to keep rent accessible and to preserve what's left of Canada's affordable housing. It bought the building with a grant from a new provincial program with a similar objective. "I would be out on the streets with my children if we were evicted from here," Felix said in a recent interview with CBC. "I just can't afford anything else that I see on the market in this neighbourhood or anywhere else." Her story mirrors that of renters across the country who have seen record-breaking increases, while those in below-market units live with the constant fear of eviction so their landlord can relist their home at a higher price or demolish it to build a bigger building. WATCH | Their rent has effectively been frozen. What it means for these B.C. tenants: 'This is pretty much the only place that I can afford' 1 hour ago Duration 1:18 These tenants worried their Burnaby, B.C., apartment building would be sold to a landlord who would hike their rents. Instead, a not-for-profit bought through a government partnership, with the promising of keeping the rent predictable. But this story is more than just Felix's. In many ways it's the story of the building — and whether it could be a model of how this country tackles the affordable housing crisis. While many market analysts suggest the solution is to build more housing, others argue that government funding and not-for-profits can help fill the gap by conserving existing affordable housing stock. The Ontario Non-profit Housing Association estimates community housing accounts for approximately 12% of overall rental housing in Canada. Non-profits own only a portion of that — meaning that for-profit landlords own the lion's share of multi-family buildings. In the 1990s, the government largely got out of subsidized housing and turned the bulk of housing over to the private sector. Since then, private landlords have been the primary buyers and developers of new stock. They've also sometimes taken the blame for the lack of affordable housing while the government has taken a back seat. But the tide is changing, at least in B.C. The B.C. Rental Protection Fund was announced in 2023 and has a goal of investing $500-million to help not-for-profits, who, like Aunt Leah's Properties, buy existing, occupied buildings and ensure the rent stays predictable for tenants. "The most affordable housing we have is the affordable housing we've already got," said Katie Maslechko, CEO of the Rental Protection Fund. "We were losing four to five affordable units for every one new unit that we were building." How it works Not-for-profits can apply to the fund for a one-time, non-repayable capital grant to help with the purchase. Once an organization has pre-qualified, Maslechko said they can start shopping. Those pursuing the acquisitions are encouraged to consider the building's capacity, scale, location and tenants, all with a goal of making sure the purchase is sustainable, she said. The grant essentially turns the building into a sort of rental time capsule — the rent for each unit stays effectively the same as it was at purchase, unless there are significant mainteance costs or other factors. Then, the increase would go no higher than a few percentage points, whatever the cap the provincial program has set for the year. It offers stability not only for the tenants living there, but also keeps rent from skyrocketing if there's turnover — unlike the private sector where there is no rent cap on apartments that become vacant. It's a different model than subsidized housing, and it can fill a gap for middle-income renters, Maslechko said. "The teachers and nurses and people that make our communities run but are so often left behind by everything else out there," she said. "They often make a little bit too much to qualify for subsidized housing. And you also see that with folks on a pension, they make just a little bit too much, even off their pension to qualify for subsidized housing programs." Last spring, the Liberal government announced the Canadian Rental Protection Fund, which would operate similarly to one in B.C. It's still in the early stages and has yet to contribute to any acquisitions. A spokesperson for Housing, Infrastructure and Communities Canada told CBC it would be accepting applications from housing providers until the end of May. The national fund has a budget of $1.47 billion, with $470 million allotted for non-repayable grants and $1 billion in low-interest loans to "support the acquisitions of existing, privately owned, multi-unit residential buildings. WATCH | The benefit of saving existing housing instead of building new: 'The most affordable housing we have, is the affordable housing we've already got' 1 hour ago Duration 0:30 The CEO of the Rental Protection Fund says that preserving existing affordable stock is critical to the housing crisis, noting it's faster and cheaper to do that than to build new units. 'We were losing four to five affordable units for every one new unit that we were building,' Katie Maslechko said. The CEO of the Ontario Non-Profit Housing Association, which oversees 700 not-for-profits in Ontario, estimates that such a budget could save up to 10,000 affordable units in two years. Marlene Coffey said not-for-profits who have been in this business long-term know how to preserve the existing affordable housing stock. "We know where it's being lost and we know where we would protect it," she said. "Also if we own the asset we can leverage that through financing, so it's in our interest to grow our portfolio and leverage that asset and do more, so there is a domino effect in this strategy." A big impact In 2022, not-for-profits in British Columbia bought just two per cent of multi-family homes in the province. But last year, because of the provincial fund, they bought about a third of multi-family units that came up for sale — more than a 30 per cent increase. "Not-for-profits have never really been able to compete against big corporate landlords because they simply do not have the funding," Maschleko said. "We're changing that." According to housing and policy expert Steve Pomeroy, the most recent census data had shown Canada lost more than 550,000 affordable housing units between 2011 and 2021. The units themselves are still there — they are just no longer affordable. There are varying ways to define affordability, and it also depends on perspective. Statistics Canada defines it as housing costs that take up no more than 30 per cent of a family's gross income. "The phrase affordability can be defined in many different ways — there is a wide range between someone who can afford three or four hundred dollars a month to someone who can afford three thousand a month," Pomeroy said, noting that Statistics Canada defines it as having housing costs that take up no more than 30 percent of the household's gross income. To put it in perspective, right now the national average rent for a one-bedroom unit is about $2,200 per month. So, to meet the Statistics Canada definition, he said, the household would need to make at least $88,000 a year. Working against the housing crisis? But not everyone believes that conservation is the way forward. "It sounds good on paper, but in reality is actually a terrible idea," said Andrey Pavlov, a professor in real estate finance at Simon Fraser University in Vancouver. "It is better to take the money and throw it in the ocean." Instead, he said all government funding should go toward new builds, not purchasing existing buildings. WATCH | This real estate prof says Ottawa needs to build new housing, not buy old buildings: To create affordable housing, Ottawa needs to increase density, prof says 1 hour ago Duration 0:43 Real estate professor Andrey Pavlov says that any government funding earmarked for housing should go toward new builds, rather than saving existing buildings. "If you protect a building that is three storeys instead of tearing it down and building it to be 30 storeys, you are actually working against the housing crisis," Pavlov said. "We need to build a lot more. We're not keeping up with our own population growth, let alone people who want to come here." And he said the national fund will make it harder for Prime Minister Mark Carney to fulfil his promise to build 500,000 more units a year. To build that many units, you "need the land to build on in areas where people want to live," Pavlov said. "This fund is protecting small-scale buildings that in many cases could offer an opportunity to go much higher." Several buildings the B.C. fund has helped non-profits acquire have already generated criticism for preserving low density in areas that need it to be much higher. Now is better But for Maschleko the B.C. fund is one part of fixing the housing crisis — and she said it's a no-brainer. "It is much more cost-effective to maintain the affordability that already exists than to try to recreate it once it has been lost," she said. She points to the high cost of building, suggesting that the only way to keep new units affordable is for the government to keep subsidizing those tenants. "You're spending significant public money year over year to keep that affordability low versus being able to make this one-time investment," she said. Coffey also agrees it can't be the only approach, but that rental protection funds within all levels of government are necessary. In the climate of tariffs we can pick up an asset at about half the price of building something new, Coffey said. "We need a multi-pronged approach to driving solutions to this housing crisis, that is how we will get there faster." WATCH | How does B.C.'s rental protection fund work?: Renters live in fear as corporations buy up buildings 3 minutes ago Duration 11:29 As corporations continue to buy up rental units in Canada, a B.C. program is trying to keep housing affordable for tenants. CBC's Lyndsay Duncombe breaks down how the provincial rental protection fund works and the impact it's having on residents in one Burnaby building.
Irish Times
a day ago
- Business
- Irish Times
Rent pressure zones to be extended to whole country in significant expansion of tenants' rights
The Government is expected to extend rent controls to the whole country, setting the rent cap at 2 per cent for existing tenancies or the rate of inflation for new builds. After a meeting of the party leaders, budget ministers Paschal Donohoe and Jack Chambers and Minister for Housing James Browne this evening, Government sources confirmed that landlords would not be able to reset rent between tenancies – unless tenants leave voluntarily or have breached the tenancy agreement. Housing advocates had warned the Government that allowing landlords to reset the rent between tenancies would result in many tenancies being terminated by the landlords in order to increase the rents. That avenue now appears to have been shut off, however, according to three sources familiar with the plans. READ MORE One senior Government source conceded that landlords might be less happy with the final package than with earlier versions which have been speculated on in recent days. The details of the package circulating on Monday night suggested a significant expansion of tenants' rights, rather than a big win for landlords and investors. The Cabinet is expected to agree to extend the current rent pressure zones to cover the entire country when it meets at Government Buildings on Tuesday morning. There is also expected to be measures to strengthen protection for tenants, including strong security of tenure and prohibiting 'no fault' evictions in the case of large landlords. It is expected that there will be different rules for small and large landlords, with smaller landlords described as those who have three or fewer rental properties. There will not be a ban on no-fault evictions for small landlords. Asked how the proposals would serve to boost supply of apartments for rent – a key objective of the Government – one source briefed on the plans said that new build apartments would have no rent cap, apart from the rate of inflation, and that the ability of landlords to reset the rent where tenants leave voluntarily would also be of benefit to landlords. But the details circulating on Monday night were less advantageous to landlords than Opposition politicians have been warning about. 'This is just one of a series of measures we'll be taking in the coming weeks to boost supply,' a Government source said. Another senior figure said that these measures on their own did not close the 'viability gap' which has resulted in a steep decline in the numbers of apartments being built. The source said, however, that a series of other measures would be brought forward soon
National Post
a day ago
- Business
- National Post
Vision Capital Corporation Comments on Speculated Amendments to Ireland's Housing Regulation
Article content A two-tier system would be folly, and would exacerbate Ireland's housing crisis, not solve it Article content TORONTO — We are very concerned about the prospect that recent press reports regarding amendments to rental housing regulations in Ireland would, if implemented, further exacerbate the nation's current policy-induced housing crisis. Article content Article content Rent control regulations on housing have been a dismal failure for decades globally, and can be observed more recently in Ireland, primarily as they significantly harm those that they are intended and purported to help. Article content If affordable housing is a social and strategic goal for a community and society, then policies that effectively achieve this aim should be promoted, not politically popular yet severely detrimental rent control regulations. To this point, policy should target broader social and economic and considerations: for example, if a society determines it is an appropriate social goal to support lower-income individuals and families with housing subsidies, policies that fund these subsidies would achieve a vastly superior outcome compared to governments interfering in the housing market that, without restrictive rent controls can and will respond to supply and demand forces to increase housing supply. Article content Programs that have successfully increased affordable housing globally include affordable housing development programs, market incentives, integral affordable housing components in new developments, and a variety of innovative and low-cost financing options. Article content In contrast, restrictive rent controls regulations stifle new supply. One cannot solve a demand problem by restricting supply. Doing so does not solve the problem – it exacerbates it. Article content Moreover, rent control regulations create a disincentive to invest capital in maintaining the physical property, resulting in deteriorating housing stock and poor living conditions for residents. To alleviate this significant problem, any new regulations should also include provisions that allow landlords who make bona fide capital improvements to properties, in addition to regular operating maintenance expenses, to apply for what is known in other rent-regulated markets as 'above-guideline increases' or 'AGIs'. AGIs recognize that to facilitate these investments, landlords need to receive a return on their capital invested, in addition to the allowed annual rent increases. Such policies have worked effectively to slow the deterioration of the housing stock. These regulations need to provide more flexibility than the Substantial Change Exemption provision in existing regulations, which generally restrict funding qualification to only the most transformative property changes. Article content The recent report that the government is considering a two-tier system, which differentiates the existing housing stock by maintaining a 2% rent increase cap on existing apartments, while allowing a 4% cap on new developments, is not sustainable and would be folly for at least four reasons: Article content The 2% rent cap is an uneconomic proposition for apartment owners and results in the previously noted underfunding of capital expenditures and a deteriorating quality of housing stock and living conditions. It is essential to appreciate that the vast majority of the affordable rental apartments in Ireland are owned by individual landlords and small businesses. With annual inflationary pressures on their costs and operating expenses, as well as regular capital expenditures increasingly straining their budgets, these owners have been increasingly selling their flats. This market reality further reduces the supply of affordable rental units, and a failure to address these trends will further exacerbate the current housing crisis. As a two-tier system is unsustainable, stakeholders will not trust the stability of the regulatory framework, which, in turn, will create market uncertainty. Market uncertainty impinges on and restricts investment decisions. Therefore, these policies and the accompanying market uncertainty will not effectively increase the urgently needed new supply, once again, highlighting the stark contrast to the stated major policy objective. Article content Politicians and all stakeholders should be confident, if not inspired, that alleviating restrictive and punitive rent regulations can, and does, work. Dallas/Fort Worth, Texas, in the United States and Calgary, Alberta, in Canada, are two of the highest population growth regions in North America. Neither of these markets has rent controls. Not only have there been record amounts of new apartments constructed in these cities, but the average monthly rents in these markets are among some of the most affordable relative to other urban centres in the United States and Canada, respectively. Article content We urge all major political parties in Ireland to align together in a non-partisan effort to acknowledge that the facts starkly contrast with the politics and take action to do what is right to enable affordable housing solutions. There is too much at stake at this critical juncture to pretend otherwise. At a minimum, any new regulations must not create a 'two-tier' difference between the existing stock and new developments and should allow for above guideline increases where landlords make bona fide capital improvements. Article content Vision Capital Corporation ('Vision') is the manager of the Vision Opportunity Funds, investment funds that invest exclusively in publicly traded real estate securities. Vision's senior portfolio management team brings over 100 years of collective experience in all facets of property markets and have researched and served as advisors and industry experts on policy considerations impacting the industry for over 40 years. Article content Article content Article content Article content Article content Article content
Reuters
a day ago
- Business
- Reuters
Ireland to exempt sitting tenants from rent cap changes
DUBLIN, June 9 (Reuters) - Sitting Irish tenants will not face rent increases above the current 2% a year limit under reforms to rent controls being considered by government, Irish Prime Minister Micheal Martin said on Monday. Ireland introduced controls in 2016 in a bid to slow runaway rental costs, limiting increases in designated "rent pressure zones" that cover most of the country at an initial 4% a year before cutting it to 2% from 2022. Reforms to the system are due to be brought to cabinet for sign off on Tuesday. "Renters right now will be protected from the entire package of measures that will come before government tomorrow, and the emphasis is more in terms of new builds and new developments that we need," Martin told national broadcaster RTE. Local media reported that under the proposals, rents in newly built properties will no longer be capped at 2% annually from next year but can instead be tied to the rate of inflation. Ireland's central bank forecasts average annual inflation of 2.1% next year and 1.4% in 2027. The government had hoped the controls would buy it time to sharply increase supply, but a recovery in homebuilding stalled at 30,000 units last year, pushing the government further from its target of an average of 50,000 new homes a year to 2030. That included a 24% year-on-year fall in the number of apartments built, most of which are earmarked for the rental sector. Property developers have said rent controls, as well as higher interest rates, have contributed to the collapse. The government has also faced criticism from opposition parties for considering any changes, citing a more than doubling of rent costs since the aftermath of a property crash in 2013.
Forbes
4 days ago
- Politics
- Forbes
Ten Years After ‘Great Debate,' Rent Control Still Looms
Angela, left, no last name given, and Lindsey Schromen-Wawrin, right, of Firelands Workers United, ... More write a note to Rep. Adam Burnbaum, D-Port Angeles, while advocating for lawmakers to adjust and pass House Bill 1217, a rent-control bill, at the Washington State Capitol Building Friday, April 18, 2025, in Olympia, Wash. (AP Photo/Lindsey Wasson) Well, it has finally happened. Washington State now has rent control, joining 6 other states that either have statewide rent control measures or have local jurisdictions that have imposed it. Oregon and now Washington are unique in that they have imposed and will regulate the measure at the state level. For me, personally and professionally, the passage of the measure leaves me with mixed feelings. On the one hand, it is regrettable that the efforts I put into opposing rent control in the state for years failed. However, there is a 'I told you so' sensation as well. I mostly stopped working in the state as the pandemic trailed off. It's hard not to feel that the real estate community got what was coming to it after not listening to advice to change their approach. On a hot summer day ten years ago next month, I debated socialist Seattle City Councilmember Kshama Sawant. Sawant had many hobby horses, but her two favorites were raising the minimum wage to $15 and the other imposing rent control. It might be surprising to know then that I consider Sawant to be the greatest political actor (and I'll get back to that word later) that I have ever known personal or had the opportunity to work with. A century from now, the names of the politically pale and anemic players on the stage during her time in office in Seattle, 2014-2024, will be completely forgotten. Her name, while not eponymous for the era, will stand out as the most notable one. Sawant was peculiar but principled. I had strongly advised and warned the real estate community about her rise during the 2013 local elections. People in Seattle, as many on the left, have a charm bracelet view of electoral politics. They voted for gay marriage, legalizing pot, and now, here was the chance to add a new charm to the rest: an honest to God socialist! I made a winning bet with some big shots in town, never collected, that she would win. And when she did, I snuck into her election night party to hear her speak. Would she back down and deliver the usual bathos—milquetoast and deflated—that most lefty politicians in this town issue when they actually win? She didn't. She quoted Trotsky, a name most of the people in the room likely had to Google. And she was prescient. She had supported the idea of using local bonding authority to build housing on City owned land, and idea that I supported because it was a really good use of debt and surplus land. Part of that idea has become reality (sort of) with the passage of two voter initiatives in Seattle in the last few years. That summer I managed to get a meeting with her to discuss this idea, explaining my previous efforts to get the City to use its credit card to create some value capture with neighborhood scale district energy programs. My intention was to suggest a consensus approach that could overcome the stodgy staff guarding the City's credit rating to try something new. Instead of following through with that proposal – she eventually lost interest in it – she suggested we debate rent control. I thought it was a great idea. It would be a challenge and an honor to debate a local politician who might know Marx as well as me and who had some principles, the wrong ones in my view, but still principles. It would also be a chance to persuade the hoi polloi that would gather about how adopting a market-based approach to housing would both be profitable and reduce rents and costs for people making less money and even, eventually, help better allocate resources to people living outside in improvised shelter. Weirdly, as venues and rules were being negotiated, it became clear that Sawant didn't want to debate one on one. She wanted to have Nick Licata a Councilmember who was as much of a socialist as she was but far less flamboyant and loud. I said that would be fine, I would be happy to debate both of them. But they demanded I have a partner. I couldn't find one. Not a single member of the so call real estate community would step up. They were terrified. Most of them thought the debate was a mistake. They ran for the hills and left me to debate with a state representative from the east side of the state. Who one that hot evening? The room was mostly Sawant's red shirted followers who hissed and booed like they were attending a Victorian melodrama. I did paraphrase, much to my own satisfaction, Margaret Thatcher observation about 'a liberal policy,' that they would rather have the 'poor poorer, provided the rich were less rich.' I asked the crowd, 'Would you support a policy that would allow developers make more housing and profit while lowering rents for poor people?' Of course, they shouted 'No, never!' I think I said, 'Let the record show that this crowd would rather poor people pay more rent and have less housing to prevent people from making money.' However, we can truly say that Sawant and her act carried the debate in the long run. And I believe it truly was an act. While Sawant believed what she said, she was far better at the theater of politics than that grind of making policy. Most of her direct efforts failed, with her legislation being dismissed with a wave by one hand of the establishment, then enacted later with the other. Nobody ever picked up on how awkward it should have been for mostly white Seattle politicians to roll their eyes at Sawant – a native of India and a woman – and then pass the essence of her measures and demands as their own. Sawant was singular in Seattle. Much hated and imitated, she shifted the city's drab and handwringing establishment to the left, leaving real estate developers and landlords in the city and state with a choice, fight or hide. They hid. In the end, failing to address the real issues of poorer people struggling with rent with better ideas led to rent control which will make their lives worse. Ten years after the debate, the final passage of rent control and Sawant's relationship with resentful and weak Democratic politicians and landlords reminds me of the phrase variously attributed to Alexander the Great or Talleyrand: 'I am not afraid of an army of lions led by a sheep; I am afraid of an army of sheep led by a lion.' You can watch the whole debate here:
