GTA must prioritize apartment builds to meet rising rental demand, report suggests
The Greater Toronto Area needs to shift its focus to investing in purpose-built rental housing in order to meet quickly growing demand, according to a new report from industry groups.
The report, from the Building Industry and Land Development Association (BILD) and the Federation of Rental-housing Providers of Ontario (FRPO) says the overall deficit of rental housing in the GTA will double in the next 10 years to 177,000 units. It says increased new purpose-built rental housing will be key to decreasing that deficit.
The report defines purpose-built rental housing as "housing built specifically for long-term rental accommodation."
In a news release, BILD president and CEO Dave Wilkes says purpose-built rental housing "represents a vital segment of the GTA and Ontario's housing stock," and provides "security of tenure."
According to the report, nearly 90 per cent of the GTA's purpose-built rentals were constructed more than 40 years ago. While purpose-built rentals are the most common from of rental housing in the GTA — at 41 per cent — it has contributed the smallest share of new supply over the last decade, at just nine per cent of the total rental supply increase.
"We are calling on all levels of government to make new purpose-built rental housing a priority and to create a policy regime that recognizes the unique nature of this type development and stimulates the addition of PBR [purpose-built rental] supply," said FRPO president and CEO Tony Irwin in the release.
'It comes down to the economics'
A key issue, according to the report, is that it's more expensive for developers to build purpose-built rentals because they have to invest more up front, and have to wait longer for the project to become profitable.
"It comes down to the economics of building and managing these type of buildings," Wilkes says.
The report suggests a number of recommendations for all levels of government. At the municipal level, it calls for several actions, including aligning property taxes with condos and low rise homes, reducing or waiving development fees, and accelerating approval timelines.
It said the province has already made positive changes, including with its recent More Homes Built Faster Act, but says there are more steps both the province and federal government could take, including updating the HST rebate to reflect current home prices.
The report says a plan to increase rental supply should include an intergovernmental strategy.
