A leading rental developer based in Toronto has voiced skepticism over the effectiveness of a proposed renters' bill of rights in tackling the core issue behind soaring rental prices: the shortage of available units.
Prime Minister Justin Trudeau recently unveiled plans to introduce various measures in the upcoming budget aimed at bolstering renters' rights. These include granting renters more authority in disputes with landlords, enabling rent payments to contribute to renters' credit history, and establishing a $15-million Tenant Protection Fund.
Adrian Rocca, CEO of Fitzrovia, emphasized the necessity for substantial steps in the forthcoming budget to truly assist renters. According to Rocca, meaningful action is imperative to incentivize developers to expedite the construction of purpose-built rental units.
Despite having 23 rental projects underway in Toronto, Rocca revealed that an additional eight fully permitted projects are stalled due to the current economic climate, which renders construction financially unviable.
While economists anticipate the Bank of Canada to maintain interest rates during its imminent rate announcement, Rocca doubts the efficacy of marginal rate cuts. He asserts that a reduction of at least 100 basis points is necessary to render construction financially feasible.
Although the Liberal government has previously emphasized the need to enhance rental supply in Canada by removing the GST on new purpose-built rental housing, Rocca believes that current interest rates undermine the effectiveness of such initiatives.
Rocca advocates for immediate action, urging the government to eliminate the GST on ongoing projects and provide a 20-year property tax exemption to stimulate rental development.
In summary, Rocca's critique underscores the urgency of addressing the fundamental challenges obstructing rental supply, highlighting the necessity for substantial and immediate government intervention to alleviate the escalating rental crisis.
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