Housing affordability is a crisis in Canadian cities – a crisis that is exacerbating economic inequality. The level of core housing need among renting households is over three times higher than among homeowners. There are no neighbourhoods in the Greater Toronto Area or Metro Vancouver where a full-time minimum wage worker can afford to rent a one- or two-bedroom apartment.
As the housing crisis deepens, the growing presence of institutional investors in the rental real estate market – a phenomena often referred to as the financialization of housing – is coming under scrutiny. In Investors for Affordable Cities, the latest report from the Shareholder Association for Research and Education (SHARE), we shed a light on why housing affordability is an issue that investors must address in their portfolios and how they can align residential real estate investments with responsible investment policies.
The financialization of housing is controversial because institutional investors have been associated with practices that drive up rents across cities. Investors pursuing value-add or opportunistic strategies may acquire older buildings and then seek to “reposition” them, displacing existing tenants to make renovations aimed at attracting new tenants who are able to pay higher rents.
In cities across Canada, debates surrounding what is affordable are casting a critical light on whether the development of much-needed new purpose-built rentals is addressing or intensifying housing inequality.
