Federal housing mandate letter renews concerns

Mandate letter renews pre-election concerns

The mandate letter given today to federal Minister of Housing and Diversity and Inclusion, the Honourable Ahmed Hussen, includes a number of points of concern from the Liberal Party election platform.

The main concerns are the following directions. The Minister of Housing is to work with provinces, territories, municipalities and the Deputy Prime Minister and Minister of Finance to develop a Fairness in Real Estate Action Plan that includes:

  • requiring landlords to disclose in their tax filings the rent they receive pre- and post-renovation and to pay a proportional surtax if the increase in rent is excessive;
  • supporting the review of, and possible reforms to, the tax treatment of Real Estate Investment Trusts (REITs);
  • policies to curb excessive profits in investment properties, while protecting small independent landlords;
  • preventing “renovictions”; and
  • reviewing the down-payment requirements for investment properties.

There are also four other issues related to residential home ownership, which are not of concern to rental housing providers.

Note that the government reviews promised in the mandate letter are not firm decisions, and that many of the steps will require the involvement of the provinces, who are often protective of their jurisdictions. Not everything in a mandate letter comes to be adopted.

Mandate letter includes positive measures

The mandate letter also includes numerous measures, which are largely positive and which CFAA largely supports, including:

  • Investing in a new Housing Accelerator Fund.
  • Creating a fund to test, develop and scale up rent-to-own projects across the country.
  • Expanding the eligibility requirements of the deep home retrofit loan program to include more climate resilience measures, while making the program accessible to multi-unit residential buildings.
  • Supporting the conversion of empty office and retail space into market-based housing, and working with municipalities to support a fast-track permitting system for conversions.
  • Undertaking reforms to the Rental Construction Financing Initiative (RCFI) to ensure the program is … processing applications in a more timely and transparent manner.
  • Introducing enhancements to the Federal Lands Initiative to ensure the federal government is more effectively deploying its inventory of lands to advance the objectives of the National Housing Strategy.
  • About 15 other points mostly related to social housing, and diversity and inclusion.

Link to the full mandate letter

Here is the link to the full mandate letter: https://pm.gc.ca/en/mandate-letters/2021/12/16/minister-housing-and-diversity-and-inclusion-mandate-letter.

CFAA’s action plan

CFAA will review the specifics of the issues with rental housing providers, our member associations across Canada, REALPAC, CHBA and other national real estate and housing associations.

CFAA’s initial reaction is that the federal government does not appreciate the value of a vibrant rental housing sector to all residents of Canada. An increase in the supply of rental housing is critical for Canada to house the planned number of immigrants and the existing population, and to facilitate economic growth and jobs.

The federal government is focusing its attention on the market effects of the combination of recent strong immigration and long-standing delays in approvals for housing development. Approvals are especially slow and uncertain for rental housing developments.

CFAA believes that the Housing Accelerator Fund (to speed up development approvals), and the other positives mentioned above are beneficial steps that will help to bring housing demand and supply back into balance. However, the proposed measures to increase taxes and restrictions on rental housing providers would be counter-productive, by reducing rental housing supply, the opposite of what is needed.

CFAA will work with rental housing providers, industry allies and the provinces to temper the steps taken, to avoid reducing rental supply at this critical time.