It might not surprise many to find out that experts are worried about housing in Canada. Mortgages are getting higher and higher, and people continue to worry about the “bubble” that we’re in. Add that to the fact that we keep increasing our debt load, and it’s easy to see why so many Canadians are finding it harder to afford a home. But putting the bubble aside for a moment, there’s another problem that these high mortgages and home prices have caused – and that’s the fact that cheaper, easier-to-obtain rental units are being scooped up almost before they’re even advertised, and that leaves many wondering what they’re going to do for housing. It’s this rental issue that the Vancouver Sun recently focused on.
It might not be surprising to many that those in Vancouver are worried about the low vacancy rates – in the most expensive city in Canada to live, the rates sit at only 1.4% compared to the rest of the country, which is at 3%. The Sun says that it’s time for the government to step in and find “low-cost, high leverage policies” that will increase employment and at the same time, get more housing for Canadians. And to make sure that that housing is affordable. The Sun gives three possible options.
One of those options is for Canada Mortgage and Housing Corporation to offer low-interest loans that could help finance new construction. Currently, CMHC is the government agency that provides mortgage insurance and, the suggestion doesn’t come at a great time. Earlier this month CMHC announced that they were near hitting their insurance cap of $600 billion; so they may not have a lot of extra funds to finance new construction starts.
The second option put forth by the Sun is a little more viable, in our eyes. This suggestion says that homeowners should be given tax incentives on home renovations. By renovating their home and improving or building rental units and getting a tax break for it, these homeowners could put a whole new spin on the rental market. And most importantly, it would open doors to those that are looking for affordable housing. This is probably the best suggestion put forth by the Sun, as it doesn’t require any more housing to be built (something that Vancouver doesn’t really need,) and it still opens up new units to those looking to rent.
And, making it easier for those landlords is something else that the Canadian government should be doing. With more tax breaks for switching over to energy-efficient appliances and things like solar panels, landlords could save money on running their units, and they could (in an ideal world) pass those savings onto the tenant. The only problem with this solution is that there’s no telling whether or not landlords would actually pass those savings on; and it doesn’t open up any more rental units either, so the problem would be much the same.
Do you think of these solutions would solve the rental problem? Or do you think that the real solution, especially in Vancouver, is getting housing prices lowered, and making it more affordable for both buyers and renters?
