CMHC 2023 Report: Stimulating construction and ownership in the rental housing stock
Montreal, January 26, 2023 - In a preliminary reading of the CMHC report on the state of the rental market, CORPIQ notes that vacancy rates are painfully low throughout Quebec, a situation that is even more difficult than last year. Moreover, rent increases have been contained within the inflation rate. The resumption in immigration combined with very few constructions has caused vacancy rates to drop significantly in Montreal, leading to a market that is even more under pressure: hence the importance of much more pronounced policies to encourage investment in renovation and new construction.
Rates below 1% in almost all of Quebec
Apart from Mont-Laurier, which is above average, as well as Montreal, Matane and Saint-Hyacinthe, which are doing well at around 2%, all the other Quebec centers have a vacancy rate that is close to 1% and even 0%. With such a difficult situation, CORPIQ considers that very important governmental efforts will have to be deployed in order to enhance and increase the supply. Moreover, it will have to concentrate on the elimination of irritants related to construction and rental ownership and in this sense eliminate regulations such as the certification in Montreal, leading to new costs.
The lack of housing throughout Quebec is a real problem. 100,000 housing units in the Quebec market are needed now and 600,000 more than normal construction would have generated in the next 8 years.
In solution mode: build and protect Quebec's rental housing stock
To solve the problem, CORPIQ proposes 32 solutions to the housing crisis that are easy to implement. Essentially, it is a matter of installing a regulatory and fiscal framework that favours the renovation of the current stock, and the massive addition of new housing. The context of the new housing starts for 2023 is particularly timid, the governments will thus have to support an accelerated revival of the construction of housing and this, everywhere in Quebec. "We estimate a 32% decrease in construction for 2023 in the rental sector when there is already a problem of balance in the market. The successive increase in the Bank of Canada's key interest rate aims to curb inflation, but also affects housing construction. The lack of government intervention will have a negative impact on vulnerable people and will increase the current housing crisis. Quebec needs a concerted strategy from its partners. CORPIQ submits for discussion solutions to act urgently," said Mr. Plante.
Additional rent control: A perpetual crisis
The Quebec rental sector is one of the most regulated on the planet under the aegis of the Tribunal administratif du logement (TAL). In fact, since 2011, the TAL's rent adjustment scenarios are essentially below inflation. In fact, living in the rest of Canada is much more expensive than in Quebec (50% difference). "Currently, the legislative framework offers good protections for all tenants. Obviously, the laws must be modernized to avoid the imperfections of the system. The assignment of a lease, the method of calculating rent increases, the interest in systematic maintenance of the rental stock are all issues that must be reviewed as a whole. On the other hand, the creation of a rent register is a very bad solution whose perverse effects will unfortunately increase real estate speculation, renovations and bad behavior of tenants and owners. There are no miracle solutions and the additional regulations will specifically cause a lack of interest in investing in the rental real estate sector. CORPIQ instead advocates in favour of solutions that bring people together, notably around the renovation and construction of social and affordable housing," concluded the spokesperson for the Corporation des propriétaires immobiliers du Québec.
Table on rent increases and inflation available: email@example.com
A non-profit organization bringing together 30,000 landlords and managers who own nearly 500,000 rental units and condos, CORPIQ is the largest association to offer services to landlords and to defend their interests, for over 40 years. It serves all regions from four offices with a total of 70 employees. Quebec landlords provide housing to 1.4 million renter households, seven out of ten of which own a duplex or triplex. They are an essential link in the housing ecosystem and in the social structure of Quebec, since they often act as first responders to increasingly serious social problems.
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