Our Goal: Level the Playing Field
Renting is an increasingly common way to make a home throughout one’s life, especially as home ownership prices leave young people's earnings behind. For too many Canadians, rental markets are now a nightmare of insecurity, sky-high costs, intense competition, limited options, and a sense of being treated — financially and in our neighbourhoods — as second-class citizens.
We’re working to level the playing field between renters and owners, to make it so Canadians can turn to local rental housing — whether by necessity or choice — and find affordable, secure homes in which to live, raise families, save, and age (read this for how we'll measure success).
- Guiding principle
- Our basic plan
- Sketching some details
What we're not working on
Guiding principle: renters aren't second-class citizens
In public policy, finances, and community life, renters are often at a disadvantage. Housing and tax policies have favoured homeowners, e.g. with capital gains exemptions, RRSP tax breaks, exclusionary zoning, and other measures. Meanwhile, neighbourhoods often resist new rental housing, viewing renters as a problem rather than a boon.
In these and other ways, we need to stop treating renters as second-class citizens.
Our basic plan
The housing system is interconnected. For example, restoring affordability to homeownership can create breathing room in the rental market.
We've got a big-picture plan to help tie it all together. But this basic plan focuses on the rental market, specifically.
First, by helping build a culture that welcomes a diversity of rental housing and renters — especially in urban, low-density neighbourhoods. From there, we need to stabilize the existing rental market while also building lots of new rental homes.
Stabilizing the existing market means protecting our current stock of "purpose-built" rental (e.g. apartment buildings), and making sure we fully understand and regulate our "secondary" markets (e.g. rented condos and basement suites). It also means encouraging landlord certification (e.g. through third-party registries) and strong tenant relocation policies (e.g. when older buildings are renovated/redeveloped).
To kick-start a wave of new market and non-profit rental, we should eliminate "exclusionary zoning" that unfairly confines new rental housing to noisy roads or downtown cores. We should use streamlined processes, tax incentives, and other supports to make it cheaper and easier to build a diversity of rental homes. And we should leverage public and institutionally-owned land — like faith groups — to build price-capped, permanently affordable supply.
Underneath it all, we need to rebalance our tax system to address massive wealth inequalities between renting and homeownership, and to help drive down housing costs, everywhere.
Sketching some details
Building on that basic plan, we can start sketching out some details.
Building a welcoming culture
The best way to fight stereotypes and discrimination is for people to get to know each other. We'll create opportunities for owners and renters to come together, share perspectives, and find common ground.
Stabilizing the existing market
Protect existing purpose-built rental ("PBR") — by using rental-only zoning, replacement policies, rate of change policies and/or incentives for long-term maintenance, and improvement of existing rental housing. The goal is to avoid a net loss of PBR (e.g. converting it into condos).
- Understand and regulate the secondary market — by gathering data on "secondary" units (often the majority of rentals), more flexibly regulating those that are illegal/unpermitted to help both renters and landlords, and regulating short-term rentals to balance homeowner and renter needs.
- Encourage landlords to get certified — by using registries like this one in B.C., which serves as quality assurance, and assists renters in identifying knowledgeable landlords who are committed to providing safe, secure, professional rental housing.
- Ensure strong tenant relocation policies — that spell out tenants' access to e.g. right of first refusal on new/upgraded units, assistance finding a new home, help with moving costs, affordability guarantees, or other financial compensation when rental homes are renovated, redeveloped, or lost.
Building lots of new rental
Both market and non-profit — non-profit and publicly-managed rental (e.g. trusts, co-ops, municipal housing, etc.) often provide deeper, more permanent affordability, but represent a fraction of the market. We need to scale these up while incentivizing a diversity of new market rentals.
Eliminate exclusionary zoning — by re-zoning large tracts of land (e.g. land dominated by single-detached homes) or by relaxing specific requirements (e.g. parking, minimum lot sizes) we can include — rather than exclude — a healthy diversity of rental homes, and people, in our neighbourhoods.
Make it easier and cheaper to finance and build — by using tax incentives (e.g. GST rebates), publicly-assisted financing, zoning and/or streamlined approval processes to make building multi-family rental housing more economic compared to e.g. condos.
Build non-profit housing on public and institutional land — by creating inventories of developable, publicly and institutionally-owned land, and working with a range of partners to build and manage price-capped, permanently affordable homes.
Addressing long-term wealth inequities
- Rebalance housing and income taxes — by dialling up taxes on housing wealth windfalls and dialling down taxes on local income. Doing so will help address massive wealth inequalities between renters and owners, created by decades of government policy and recent runaway markets.
Within that basic plan, our current priorities are:
The City of Burnaby
The Canadian Rental Housing Index lists the City of Burnaby's rental market as the most critical in all of B.C., and the 3rd-most critical in all of Canada. According to the Canada Mortgage and Housing Corporation, Burnaby lost 712 rental units between 2010 and 2017 — many of those to demoviction — while other cities in the region were busy adding rental homes. With a new Mayor and Council having been elected in the fall of 2018, we'll be pushing to have the City commit to the goal of a 3% rental vacancy rate,* as has been adopted by the City of Vancouver. This can be achieved by a comprehensive rental housing plan that includes the range of mechanisms as outlined above.
Mobilize in support of individual housing projects
Again, focusing largely on the City of Burnaby. We'll be prioritizing projects that include a significant percentage of purpose-built rental homes, the incorporation of family-friendly 3+ bedroom units, green-building certification, and proximity to/inclusion of community amenities. If the projects would result in the displacement of existing tenants, we're looking for strong tenant assistance policies and supports.
A related priority is to seek funds for additional organizing capacity, to expand this work in other cities.
Get the federal government to follow through on its commitment to waive GST rebate on all new rental homes
Studies show that one of the best ways to encourage a wave of new rental housing is to provide favourable tax treatment. Indeed, the federal Minister of Finance's mandate letter includes a priority to "remove the GST on new capital investments in rental housing."
We believe this could be one of the single most effective policies to encourage a wave of new, secure rental housing, and are encouraging the federal government to follow through on this commitment.
Rebalance our tax system to address growing inequalities
As housing values have spiraled out of control, huge new inequalities have been created between renters and owners, and young and old. Our tax system has yet to catch up, burdening many of us more than is fair. That's why we're proposing a #TaxShift: less tax on local income, more tax on crazy housing values, enabling better investments in young and old alike.
- The City of Burnaby
Our basic plan to level the playing field between renters and owners draws on and combines the work of many other organizations, including:
- The BC Non-Profit Housing Association — which promotes the strengthening and expansion of the non-profit housing market.
- The BC Rental Housing Coalition — of which Gen Squeeze is a member.
- The Vancity Impact Real Estate strategy — which aims to scale up affordable homes on community-owned real estate assets.
- The Union of B.C. Municipalities — whose 2017 Housing Strategy emphasizes the importance of increased investment in rental housing, and the simultaneous need to restrict harmful demand (part of our broader housing gameplan).
LandlordBC — which advocates for increasing the stock of purpose-built rental housing, and whose Certified Rental Building and Landlord Registry is increasingly helping renters identify safe, secure and professional rental housing.
- The Urban Development Institute — whose 2018 policy priorities include making it easier and cheaper to build rental housing.
- The Government of British Columbia — whose current, 30-point plan for housing affordability contains many measures to stabilize the current market, and an ambitious objective to build 114,000 new rental and co-op homes over ten years.
And many others!
What we're not focused on
As average rents skyrocket:
Some call for stricter rent controls. Rent control has its place (e.g. we worked to reinstate it here), but expanding rent controls can also discourage new supply. Short story: the net impact of rent control can be situation-specific and controversial, and we encourage governments to be extremely careful here; for our part, we're choosing to focus on increasing vacancy rates and decreasing land costs across the entire system.
Others work for the inclusion of "below-market" rental units in new construction, subsidized by either (a) other tenants or owners who end up paying more, (b) public funds, (c) lower developer margins, or — often — (d) a murky combination, which can be mediated by so-called "density bonusing," "inclusive housing policies," "community amenity contributions," or other project-specific arrangements with municipalities.
Short story: we think it's almost always a good thing to seek the inclusion of a diversity of market units, and we'd like to see the inclusion of more traditional, heavily-subsidized social housing in more new developments. Where things get murky is when we start playing with e.g. 10% discounts as a "band-aid" subsidy for a small number of [lucky] residents. The community-specific and site-specific merits of such schemes are usually outside our capacity to meaningfully comment or contribute.*
*That said, we're currently participating in a City of Victoria working group to provide input on that city's draft Inclusionary Housing and Bonus Density policy, and we're using it as an opportunity to dive deeper into this area of policy.
- Many organizations work to strengthen social housing. Great groups like Pivot Legal Society, ACORN, the BC Non-Profit Housing Association, BC Housing, and the Canadian Mortgage and Housing Corporation do important work to grow the supply of shelters, transition housing, and social housing to serve the most vulnerable in our society. We are allies in this work. However, Gen Squeeze focuses our change-making efforts on policies, programs, and projects to shape the much larger, less-subsidized component of the housing market (see the figure below). If we're successful in reining in costs (e.g. land costs) across the system, all components of the housing continuum will be easier and cheaper to build.
We'll measure progress by tracking vacancy rates — shooting for the widely-accepted, healthy range of around 3%* — and by turning to the comprehensive scores produced by the Canadian Rental Housing Index.
"Macro" indicators like vacancy rates are super important. For example, when vacancy rates hover at or below 1% — as has been the case in Toronto, Vancouver, Victoria, and many other markets — landlords can charge much higher rents and be especially picky about things like pets. Finding a suitable rental home under these conditions can feel like a nightmare. However, if we can get vacancy rates to around the 3% range, the tables turn and landlords start having to compete for tenants, putting downward pressure on rents and things like pet exclusions, and helping incentivize proper maintenance and upgrades.
*We recommend a vacancy target of around 3% in recognition that vacancy varies from one community to another, and targets should reflect the vacancy history that is specific to each community. We select 3% because it is the target adopted by the City of Vancouver, where vacancy rates have been particularly low by comparison with national trends, and rent increases have been correspondingly high of late. A 3% vacancy rate target is also in line with the average national vacancy rate reported by the Canadian Mortgage and Housing Corporation (CMHC) since 1992 (approximately 3.3%); and somewhat above the average in Ontario (2.7%) and BC (2.4%) where rising rents have pressured communities more than in other provinces.