How ‘financialized’ landlords may be contributing to rising rents in Canada — The business model allows outside investors to share in the income profit of rental housing
How ‘financialized’ landlords may be contributing to rising rents in Canada — The business model allows outside investors to share in the income profit of rental housing
*[…] Canada lost more than half a million affordable rental units in a decade, and experts say it’s because ‘financialized landlords’ are turning housing into investments.*
*CBC The National investigates the impact of the growing industry and what it means for renters.*
*Starlight Investments is also part of a growing trend across Canada: the financialized landlord, whose business model allows outside investors to share in the profit of rental housing.*
*Some tenants and housing experts believe this model is leading to higher rents across Canada, as the pressure to increase shareholder value becomes the top priority and these companies expand their share of the country’s rental stock.*
*According to research by Martine August, a housing expert at the University of Waterloo, the biggest financial firms now collectively own close to 400,000 suites — nearly 20 per cent of the purpose-built multi-family rental units in Canada. That’s up from zero in the mid-’90s.*
*August says the business model often leads these landlords to cut costs on buildings and find ways to raise rents through AGIs or evictions. Because of vacancy decontrol rules, once a unit is vacant, the landlord can raise the rent as much as they want to.*
*Financial firms are raising rents higher than other types of landlords. On average, after a financial firm acquires a building, they increase the eviction-filing rate by three, August said. They triple it.*
*According to August’s research, financialized landlords purchased 90 per cent of all rental stock that came up for sale in Toronto in 2020.*
*[…] August says these landlords often like to buy older buildings, because it’s cheaper than new construction and the potential for profit is higher, especially if the buildings are full of tenants paying below-market rents.*
*Starlight’s own literature for shareholders describes a model where they seek out older stock and in some cases have seen rents rise up to $411 per unit.*
*According to research done by Steve Pomeroy, a professor and special advisor to the Canadian Housing Evidence Collaborative at McMaster University in Hamilton, between 2011 and 2021, Canada lost more than 550,000 affordable rental units.*
*Where did they go?*
*They are still there, for the most part, but they are no longer affordable. The rents have just gone up beyond that affordability threshold, Pomeroy said.*
imalyshe on
“may”? what kinda spineless author would use this word for this topic?
VelvetVisage6 on
Rents going up by 22% in just two years is insane! Something has to give.
Golbar-59 on
It’s not complicated. Landlords induce a cost when they capture homes. It’s simply the law of supply and demand. Capturing homes reduces supply, which increases prices. Then, they undercut that price to generate a profit.
togocann49 on
So they say it isn’t the job of industry to keep people housed-which is very true. So we should draw up stricter legislation for these “corporate landlords”, cause people should always come ahead of profit.
abc123DohRayMe on
I sold my rental unit as it was too much risk. Non paying tenants, damage, etc. People think they have some sort of right to abuse my property. I make just as much money letting it sit in the bank with no risk.
I suspect that many other people have decided to sell their units because of the risk.
Make being a landlord more rewarding, and more people will do it. If there are more people doing it, then it will increase supply and push rents down.
Too may bad tenants ruin it for the good ones.
Angry_beaver_1867 on
Financialized has got to be my least favourite term of 2024. Seems to me housing was always financialized just the supply and demand for housing is way out of whack so returns are silly and affordability has cratered
Sara_Sin304 on
YOU DON’T SAY 🤔🤔🤔
imaginary48 on
“may” is an interesting way to say “most definitely are”
This is an open fact, not a little secret or something made up
swampswing on
This is the most economical illiterate nonsense. I googled the property in the article and it is a collection of 20 storey towers. Who the fuck else is going to own a 20 storey complex besides a large corporation or reit. Hell these buildings have probably been owned by one corporation or another since inception.
11 Comments
They definitely are.
Excerpts from [article](https://ici.radio-canada.ca/rci/en/news/2103037/how-financialized-landlords-may-be-contributing-to-rising-rents-in-canada) by Angela Hennessy:
*[…] Canada lost more than half a million affordable rental units in a decade, and experts say it’s because ‘financialized landlords’ are turning housing into investments.*
*CBC The National investigates the impact of the growing industry and what it means for renters.*
*Starlight Investments is also part of a growing trend across Canada: the financialized landlord, whose business model allows outside investors to share in the profit of rental housing.*
*Some tenants and housing experts believe this model is leading to higher rents across Canada, as the pressure to increase shareholder value becomes the top priority and these companies expand their share of the country’s rental stock.*
*According to research by Martine August, a housing expert at the University of Waterloo, the biggest financial firms now collectively own close to 400,000 suites — nearly 20 per cent of the purpose-built multi-family rental units in Canada. That’s up from zero in the mid-’90s.*
*August says the business model often leads these landlords to cut costs on buildings and find ways to raise rents through AGIs or evictions. Because of vacancy decontrol rules, once a unit is vacant, the landlord can raise the rent as much as they want to.*
*Financial firms are raising rents higher than other types of landlords. On average, after a financial firm acquires a building, they increase the eviction-filing rate by three, August said. They triple it.*
*According to August’s research, financialized landlords purchased 90 per cent of all rental stock that came up for sale in Toronto in 2020.*
*[…] August says these landlords often like to buy older buildings, because it’s cheaper than new construction and the potential for profit is higher, especially if the buildings are full of tenants paying below-market rents.*
*Starlight’s own literature for shareholders describes a model where they seek out older stock and in some cases have seen rents rise up to $411 per unit.*
*According to research done by Steve Pomeroy, a professor and special advisor to the Canadian Housing Evidence Collaborative at McMaster University in Hamilton, between 2011 and 2021, Canada lost more than 550,000 affordable rental units.*
*Where did they go?*
*They are still there, for the most part, but they are no longer affordable. The rents have just gone up beyond that affordability threshold, Pomeroy said.*
“may”? what kinda spineless author would use this word for this topic?
Rents going up by 22% in just two years is insane! Something has to give.
It’s not complicated. Landlords induce a cost when they capture homes. It’s simply the law of supply and demand. Capturing homes reduces supply, which increases prices. Then, they undercut that price to generate a profit.
So they say it isn’t the job of industry to keep people housed-which is very true. So we should draw up stricter legislation for these “corporate landlords”, cause people should always come ahead of profit.
I sold my rental unit as it was too much risk. Non paying tenants, damage, etc. People think they have some sort of right to abuse my property. I make just as much money letting it sit in the bank with no risk.
I suspect that many other people have decided to sell their units because of the risk.
Make being a landlord more rewarding, and more people will do it. If there are more people doing it, then it will increase supply and push rents down.
Too may bad tenants ruin it for the good ones.
Financialized has got to be my least favourite term of 2024. Seems to me housing was always financialized just the supply and demand for housing is way out of whack so returns are silly and affordability has cratered
YOU DON’T SAY 🤔🤔🤔
“may” is an interesting way to say “most definitely are”
This is an open fact, not a little secret or something made up
This is the most economical illiterate nonsense. I googled the property in the article and it is a collection of 20 storey towers. Who the fuck else is going to own a 20 storey complex besides a large corporation or reit. Hell these buildings have probably been owned by one corporation or another since inception.