Toronto : A Toronto-based real estate company, Dream Unlimited Corp., is poised to embark on an ambitious venture to construct 5,000 new rental units in urban centers across Canada. This significant development has been spurred by the federal government’s decision to eliminate GST charges on rental developments. Michael Cooper, the CEO of Dream Unlimited Corp., pointed out that high interest rates and escalating construction costs had previously hindered many projects from taking off.
However, the landscape changed dramatically with the federal government’s announcement of a 100% GST rebate for new rental developments, a much-needed incentive according to housing experts, advocates, and developers. Cooper explained that this rebate is a game-changer because rental developers are typically unable to pass on sales tax costs to their tenants, making many rental units economically unviable.
It’s important to note that for this development to fully materialize, provinces must also waive their sales taxes, and average interest rates must remain stable. Dream Unlimited Corp. plans to initiate the construction of over 1,000 rental units in Ottawa, with one of the projects conducted in collaboration with the Multifaith Housing Initiative, a local non-profit affordable housing organization.
This innovative partnership between a non-profit organization and a for-profit real estate company aims to provide more affordable housing units at a lower cost per square foot. Approximately 40% of the units in Ottawa are expected to be affordable, with rents set at 33% or 45% below market value.
As the GST rebate policy begins to reshape the landscape for rental developers, Cooper and others in the industry believe there are additional measures the federal government can take to further stimulate purpose-built rentals. These measures could include streamlining the Canada Mortgage and Housing Corporation’s (CMHC) approval process, introducing other tax incentives, and facilitating access to more affordable financing.
Prime Minister Justin Trudeau’s government has committed to unveiling more measures to boost the country’s housing stock, with expectations focused on the upcoming fall budget update. According to the CMHC, Canada needs to build approximately 3.5 million more housing units by 2030 to restore affordability.
Cooper welcomes the growing discussion on housing in the country and acknowledges that the housing crisis is the result of various levels of government not doing enough over the past four decades. He is encouraged by the collaborative efforts of all parties to find solutions to this pressing issue.