U.S. President Donald Trump says he wants Congress to codify his plan to ban institutional investors like Blackrock from purchasing single-family homes as part of a push to restore affordability to the housing market.
Canada’s housing market is generally more expensive than the U.S. and ranks as one of the least affordable in the G7 when comparing income-to-price ratios.
Would a similar ban in Canada make sense?
The federal NDP says it could help, but would need to focus on rental housing, blaming corporations and real-estate investment trusts (REITs) for purchasing low-cost units, evicting tenants for renovations and then jacking up rents.
NDP housing critic Jenny Kwan said Canada should impose a moratorium on corporations purchasing new properties or at the very least, limit how many units they can own.
“Financialization of housing is happening here in Canada,” Kwan told iPolitics last week, noting that Canada lost over 200,000 affordable housing units between 2016 and 2021.
“[Investors are] using housing as a commodity instead of a necessity.”
Kwan said REITs and other corporate investors are buying up affordable housing properties at such an accelerated pace that for every one unit added to the market, eight are lost.
She said the Liberals need to do more than just promise faster housing construction and urged the government to end favourable tax treatment for REITs that allow investors to recoup proceeds largely tax-free because they are treated as capital gains.
Kwan accused the Liberals of blaming newcomers to Canada for driving up home prices when the real culprits are profit-driven investors, and called for Ottawa to provide new funding for non-profits and co-ops to purchase distressed affordable housing properties.
Under this plan, non-profits would have a right to first refusal for these units.
The federal government has pledged funding for such efforts, launching a $1.5-billion Canada Rental Protection Fund in 2024 that would help the community housing sector acquire “at-risk rental apartment buildings,” with the goal of ensuring they remain affordable over the long term.
