Fri. Sep 29th, 2023
    The Problem of Rental Units and the Role of REITs in Canada

    This article highlights the major problems faced by low-income individuals in Canada when it comes to finding affordable housing. The focus is on rental units and the role played by real estate investment trusts (REITs) in exacerbating the issue.

    REITs, which own apartment buildings, often treat their tenants as cash cows, continuously extracting more money from the properties they own. This is made possible by the legislation enacted in Canada in the 1990s, which exempts REITs from paying corporate taxes. They employ strategies like “repositioning” to increase rental revenues, exploiting the same properties to maximize profits.

    In provinces without rent control, landlords push rents as high as the market can bear. In Ontario, landlords take advantage of loopholes in the rent control legislation to evict long-term tenants and charge higher rents to new tenants. This practice, known as “vacancy decontrol,” allows them to maximize their profits by constantly evicting tenants and charging higher rental amounts.

    Over the years, REITs have acquired a significant number of apartment units in Canada. This has allowed them to grow their portfolios and become the landlords of countless families. However, these excessive profits at the expense of tenants’ financial security need to be curbed.

    There is a need for the federal government to review the tax treatment of REITs to address this issue. Additionally, the provincial government in Ontario should take action to prevent landlords from making excessive profits. Currently, politicians at all levels seem to lack the political will to rein in the landlords and provide affordable housing options for low-income individuals.

    Canada’s rental housing market is working in favor of landlords, while tenants continue to struggle with housing insecurity. It is crucial for governments and politicians to prioritize the needs of low-income families and take steps to ensure housing security for all.

    Sources: OrilliaMatters