Thank you and good afternoon.
My name is Sarah Lunney. I am a member of ACORN's New Brunswick chapter. Thank you for inviting us to be at this committee hearing.
ACORN is a national, membership-based community organization of low- to moderate-income individuals fighting for social and economic justice. We started in 2004 in Weston, Toronto, and now have over 160,000 members.
Healthy and affordable homes are ACORN's core campaign. I'm here today to speak with you on some issues and policy recommendations that we would like to bring to your attention in relation to housing inflation.
First, we are deeply concerned that the federal government is currently investing billions of dollars into developing more unaffordable rentals. Recent reports from the parliamentary budget office and the National Housing Council have raised serious concerns regarding the delivery of the national housing strategy programs, the NHS. The housing supply created by the NHS programs do not meet the needs of those who are in core housing need, people who are living in unaffordable, unsuitable and uninhabitable housing. The programs are designed currently to cater to middle-income families.
The main issue is the way in which these programs define affordability. Rent in these developments is 30% of the median household income of the area where the development is taking place, which is often too high. Moreover, the period for affordability is to be kept for 10 years to a maximum of 21 years.
We need the federal government to build real affordable housing and target the people who need it most. A minimum of 1.2 million units of affordable housing is needed in the next decade. Housing built must target people in core housing need. That would be individuals with household incomes between $10,000 and $30,000 a year. The housing needs to be kept affordable in perpetuity.
The second issue that is contributing to the housing crisis is that the majority of funding is currently going to private developers and not to non-profits or co-ops. Fifty-seven per cent of total funding under the NHS has gone to private developers. We need a CMHC acquisitions fund to enable non-profits, co-op and land trust organizations to purchase at-risk rental buildings when they come onto the market.
The third issue in relation to housing inflation is the massive tax exemptions going to real estate investment trusts, also known as REITs. ACORN's “Rein in the REITs” campaign has shown how the federal government is losing billions of dollars by giving preferential tax treatment to REITs. At the same time, these corporate landlords are reinforcing renovictions and demovicting tenants, destroying affordable housing and forcing tenants to often live in uninhabitable housing.
ACORN's research with the Canadians for Tax Fairness shows that if REITs were taxed at the same rate as non-REIT Canadian corporations, they would have paid over $1.2 billion more in taxes since 2010. This was based on an analysis of seven REITs.
CMHC is helping REITs by giving them insured mortgage products to secure the financing required to acquire more and more apartments. ACORN's new research found that financialized landlords actually fare worse when it comes to maintenance of their buildings.
In Ontario, where landlords are allowed to do above-guideline rent increases, known as AGIs, 19% of tenants living in apartments owned by financialized landlords said that their landlord got their AGI.
From our perspective, the federal government should stop giving massive tax exemptions to REITs by closing the tax loophole in the Income Tax Act. Any CMHC-backed financing should include a “no displacement” guarantee as a condition to providing any insurance to entities such as REITs. The federal government also needs to regulate banks to not provide financing for acquisitions when the purchaser intends to increase rents beyond the guideline amount.
Lastly, the current lack of or inadequate rent control is another important issue on which we need federal leadership. Renting is becoming more and more unaffordable. CMHC shows that the average rent in Ontario for new housing built in 2021 was $2,222 per month. Lack of rent and vacancy control offer major incentives for landlords to evict tenants and/or displace them by not doing repairs or pursuing other means to evict tenants.
As stated in Steve Pomeroy's paper from 2020, as part of the anti-inflation measures in the mid-1970s, the federal government requested that all provinces enact rent control. We are in an unprecedented situation with a health and financial crisis, an ever-worsening housing crisis and inflation. The federal government has the power to mandate or incent rent control in all provinces to protect and promote the right to housing. Precedence for this has already been set at the federal level, as outlined in Pomeroy's paper.
There is mention in the mandate letter to the Minister of Housing regarding amendments in the Income Tax Act to discourage landlords from jacking up rents post renovation, but there's no mention of eviction for so many other reasons that are not related to renovation.
I'd like to close out by saying that there are still tens of thousands of tenants who have been evicted, or who are at risk of eviction, due to accumulated rental arrears during the pandemic. We have asked the federal government to implement a rent relief program for people who have been falling through the cracks since the pandemic began. We still believe the federal government needs to act on this.
Thank you very much for having us today. I look forward to your questions.