The Rental Construction Financing initiative is one of the National Housing Strategy programs tackling the housing supply shortage in Canada. The program is making a positive impact in addressing this pressing issue.
The Rental Construction Financing initiative is specifically designed to incentivize the construction of purpose-built rental housing and increase the supply of housing where it’s needed most. It does this by providing fully repayable low-interest loans to developers.
Filling a gap
The traditional real estate market has typically favoured higher-end condominiums over purpose-built rental housing for middle-income households. Without any financial incentives, it’s more attractive and less risky for developers to build luxury condominiums than to build purpose-built rental housing for middle income households. This approach, however, does not address the widespread need for more rental housing and has led to unbalanced markets, especially in larger cities.
The Rental Construction Financing initiative is designed to fill this gap. The result? More rental housing that meets the needs of middle-income Canadians.
The Government of Canada recently announced more than 70 Rental Construction Financing initiative projects. This represents an investment of $4.1 billion that will help bring close to 12,000 new rental homes to communities nationwide.
More rental housing benefits people, communities and the economy
Unfortunately, many people in Canada struggle to find suitable housing, especially in major cities that have historically low vacancy rates. The construction of rental housing has not kept pace with Canada’s growing cities and population. This, combined with aging stock over the decades, has led to a decline in rental housing.
The shortage of rental supply doesn't just affect residents — it also impacts local economies. Cities need workers and workers need places to live. A balanced and well-functioning rental market makes local economies more attractive to businesses and their employees.
Accelerating the construction of purpose-built rental housing has other benefits such as:
- building stronger communities
- offering more options for middle-income families
- supporting the growth of our cities