According to the report, GTA must prioritize residential construction to meet rising rental demand
According to a new report from industry groups, the greater Toronto area needs to shift its focus to investment in purpose built rental housing to meet rapidly growing demand.
The report from the Building Industry and Land Development Association (BILD) and the Federation of Rental-housing Providers of Ontario (FRPO) states that the total rental housing deficit in the GTA will double to 177,000 units over the next 10 years. It says that more new purpose-built rental housing will be key to reducing this deficit.
The report defines purpose-built rental housing as “dwellings purpose-built for long-term rental accommodation”.
In a press release, Dave Wilkes, President and CEO of BILD, says that purpose built rental housing “represents an important segment of the GTA and Ontario housing stock” and offers “security of ownership.”
According to the report, nearly 90 percent of the GTA’s purpose-built rental homes were built more than 40 years ago. While purpose built rental housing is the most common form of rental housing in the GTA at 41 percent, it has contributed the smallest share of new supply over the past decade at just 9 percent of the increase in total rental supply.
“We call on all levels of government to prioritize new purpose built rental housing and create a political regime that recognizes the uniqueness of this type of development and encourages the addition of PBR [purpose-built rental] deliver,” said FRPO President and CEO Tony Irwin in the press release.
“It’s all about the economy”
A key problem, according to the report, is that it is more expensive for developers to build purpose-built rental housing because they have to invest more up front and wait longer for the project to become profitable.
“It comes down to the economics of building and managing these types of buildings,” says Wilkes.
The report proposes a set of recommendations for all levels of government. Several measures are being called for at the municipal level, including aligning property taxes with condominiums and low-rise buildings, reducing or waiving development fees and speeding up permit deadlines.
It says the province has already made positive changes, including with its recent More Homes Built Faster Act, but there are other steps both the province and the federal government could take, including updating the HST rebate to reflect current real estate prices.
According to the report, a plan to increase rental supply should include an interstate strategy.
