The Commons Human Resources committee heard that landlords in Canada have an average profit margin of 8%. However, there was no agreement among the witnesses on how to boost the national housing supply..“Some people picture all or most of the rent money going into the landlord’s pocket,” testified John Dickie, president of the Canadian Federation of Apartment Associations. .“The truth is far from that.”.According to Blacklock’s Reporter, Dickie said an average of 19% of rental revenue covered operating costs, 14% paid property tax and 12% paid utilities..“That makes up 45 cents out of every dollar of rent leaving 55 cents as net operating income, but we’re not done with the expenses,” said Dickie..“On average, another 36 cents goes to pay the mortgage and 11 cents goes to pay for major repairs and building modernization,” said Dickie..“That leaves just eight cents out of every dollar of rent as the pre-tax return on each dollar of revenue.”.The committee is studying the “financialization” of housing. .“Good luck finding a $1,700 apartment in any urban centre in the country right now,” said Ray Sullivan, executive director of the Canadian Housing and Renewal Association..“Absolutely, there is a role for the private sector,” said Sullivan. .“What’s important as we talk about rapidly escalating housing starts and increasing the housing supply is that we are very aware and mindful a share of that needs to be non-market and community housing. We are not going to solve the housing crisis by adding five million $1 million homes or five million $ 3,000-a-month rents for one-bedroom apartments.”.“What do you think the right mix should be?” asked Conservative MP Scott Aitchison (Parry Sound-Muskoka, ON). .“We need to double the relative share of non-profit housing,” replied Sullivan. .“We need to get up into the range of 8% to 9%.”.Michael Brooks, CEO of the Real Property Association of Canada, claimed taxes and development charges were responsible for “up to 30% of the cost of a new unit” in most cities..“In places like Toronto, the cost to build apartments is approaching $800 a square foot and for condos north of $1,200 a square foot,” said Brooks..“We know Canada needs 3.5 million additional housing units by 2030 to restore affordability, according to Canada Mortgage and Housing Corporation (CMHC), but it sometimes takes up to five years to get housing approved in many cities in Canada,” said Brooks. .“As many new projects are potentially shelved, this will be a challenging target.”.According to a Housing Market Information report published by CMHC on June 23, 2022, the current annual housing starts of 200,000 units are far below the demand of more than 440,000 units..“To restore affordability, we need 3,500,000 additional housing units beyond current projections” by 2030, said the federal insurer. .“We have a large task in front of us.”
