Alliance REIT Responds to The Federal Government's request for consultation on Housing Policy and "Financialization of Housing". Advocates for Multiplex Development as a Key Solution to Canada's Housing Shortage

TORONTO, Dec. 4, 2024 /CNW/ - At Alliance REIT we are acutely aware of the housing shortage. We develop small multifamily properties as rental housing in Canada's largest city.  We create hard loft rental apartments from previously underutilized turn of century buildings close to the city core and rent them at reasonable rates. This is a part of our strategy as a residential rental housing provider.

We develop elevated rental housing from existing underutilized buildings. These existing "infill" properties are an assortment of derelict mixed-use buildings, commercial buildings and often, underutilized or dilapidated large single-family homes.  We convert these buildings into boutique multiplexes and provide much needed additional housing where none or only one existed. 

Since our inception eight years ago, we have created over one hundred new apartments, providing that elusive "missing middle" housing and enabling our residents to live in their neighbourhoods of choice.  We create 1-, 2- and 3-bedroom apartments to provide varying options for young couples with growing families.

In our view, residents who rent should have the same choices as residents who own their homes. Residents who rent should not be restricted to live only in small apartments in high-rise condo buildings or aging apartment buildings that are often clustered in blocks.  Residents who rent should also be able to live in homes in tree-lined residential neighbourhoods with access to back yards and roof top decks.  That is the type of housing that we provide.

The Deputy Prime Minister, the Honourable Chrystia Freeland and the Department of Finance have asked for consultations to see if "very large corporate investors" buying single family homes have contributed to, or are the cause of, housing unaffordability in Canada.

We are a boutique public residential REIT and do not buy single family homes as a speculative investment.  We buy underutilized properties, which are sometimes large single-family homes, to build onto and convert to boutique multi family homes and add to the rental inventory in Toronto.

Although we are not in the single-family home rental (SFR) business, and do not intend to participate in it (and therefore are not part of the intended category of large corporate investors buying single family homes), we do nevertheless densify well located, large, underused single-family houses into multiplexes.  Therefore, we would like to offer some thoughts as to why our strategy, not only is unrelated to the causes of Canada's housing problem, but, to the contrary, is a critical part of the solution and is an example of productive investment in housing supply.

Creating multiplexes (such as duplexes, triplexes, or small apartment buildings) from large single-family homes is a strategy that helps address a range of issues, including housing affordability, urban sustainability, and economic stability, all while fostering more diverse, vibrant communities and providing the gentle density housing that addresses the housing shortage.  Some specific benefits of our strategy at Alliance REIT are as follows:

1. Increased Housing Supply & More Efficient Land Use

• Alleviates Housing Shortages: By converting single-family homes into multiplexes, often by adding an additional story, we create more units and density on the same piece of land. This strategy addresses growing demand and alleviate housing shortages, especially in high-demand urban areas where land is scarce or expensive.
  
  
• Affordable Housing: Multiplexes typically offer more affordable options compared to single-family homes. They make better use of available land, which can lower the cost per unit and thus provide more affordable rental or ownership opportunities.

• Environmental Sustainability: Higher gentle density housing reduces urban sprawl, which can lead to lower environmental impact. Converting single family homes into multiplexes repurposes existing buildings and saves buildings from demolition and ending in landfills.

2. Improved Economic & Employment Opportunities

• Job Creation: The process of conversion into multiplexes can stimulate the construction industry, create jobs, and provide local economic benefits through renovations and upgrades.  Managing multiplex housing requires staff for property management, maintenance, security, and administration. This can create a significant number of jobs within the local community.

3. Diverse and Vibrant Communities

• Mixed-Income Neighborhoods: Multiplexes help diversify the socio-economic makeup of a neighborhood. A mix of single-family homes and multiplexes attracts different income groups and age demographics, contributing to more dynamic and inclusive communities.
  
  
• Social Interaction: Higher-density living can foster a stronger sense of community, as residents are more likely to interact with one another in shared spaces, such as gardens, courtyards, or common areas. This can lead to stronger social ties and a more cohesive neighborhood.

4. Preserving Neighborhood Character

• Adaptation of Existing Structures: By converting single-family homes into multiplexes, we preserve the architectural character and history of neighborhoods while accommodating more people. This helps maintain the aesthetic appeal of older neighborhoods while addressing modern housing needs.
  
  
• Incremental Development: Conversions tend to be smaller in scale compared to large-scale apartment complexes, allowing for a more gradual and sensitive integration into established residential areas. This can mitigate concerns about over-densification or the loss of neighborhood identity.

5. Addressing Demographic Shifts

• Accommodating Growth: Population growth and changing demographics, such as more single-person households, aging populations, or increased immigration, have created shifts in housing demand. Multiplexes offer flexible housing options that cater to different household sizes and needs, helping communities adapt to these trends.
  
  
• Aging-in-Place Solutions: Multiplexes also support aging populations by providing multi-generational housing options or accessible living spaces within a single structure, helping older adults stay in their communities longer.

6. Scalability and Efficiency

• Economies of Scale: At Alliance, we can build and manage multiplex housing more efficiently than individual investors, leading to cost savings in construction, maintenance, and management. These cost savings can translate into lower rents or more affordable housing options for residents.
  
  
• Professional Management: We have the expertise to manage properties more efficiently than individual landlords. This can result in better upkeep, quicker response to resident issues, and overall higher quality living conditions.

7. Stability and Diversified Housing Options

• Reduced Speculation: Unlike individual investors who may sell or flip properties for short-term profits, REITs such as Alliance are more stable and focused on long-term returns. This can contribute to a more stable rental market and reduce housing instability for residents.

• Variety of Units: At Alliance REIT, we offer a wider variety of housing units (such as studios, 1-bedroom, 2-bedroom apartments, and family-sized units) to cater to diverse demographics. This increases housing choices for people from different income levels, family structures, and lifestyles.

8. Innovation and Modernization

• Adoption of Technology: We invest in smart home technologies, energy-efficient systems, and digital platforms for our residents to report issues with immediate response times. This creates more modern living environments that appeal to a wide range of residents.

Alliance REIT's densification strategy is part of a vital and practical solution to Canada's housing challenges. By transforming underutilized buildings which may include large single-family homes into small multiplexes, we provide the "missing middle" housing—an essential yet often overlooked segment of the market. This approach delivers much-needed gentle density while preserving the character of neighborhoods and meeting the demand for more diverse, attainable housing options.

The narrative that large companies purchasing single-family homes exacerbate Canada's housing crisis does not hold in this context. In major cities, high resale prices make rental yields for single family homes unattractive for such acquisitions to be widespread. Our strategy at Alliance REIT focuses on providing real solutions to the housing shortage by maximizing the potential of existing assets to house more people in elevated modern apartments at a reasonable rent. This is not just a solution—it is a critical step forward in creating a more equitable and functional housing ecosystem for Canadians.

About Alliance REIT

Alliance REIT creates rental housing by repurposing and managing boutique loft style rental apartments in desirable Toronto neighbourhoods. Alliance REIT creates communities and reinvests in Toronto neighbourhoods by strategically sourcing, developing and managing well located turn of century buildings into highly sought-after boutique residential rental apartments. Alliance REIT is an open-ended fund, RRSP and TFSA eligible and available on Fundserv using purchase code BEL900 Series A & BEL904 Series F.

At Alliance REIT we believe that renting should not mean sacrificing on comfort and service. We take genuine pride in not only providing a unique and elevated place to live, but an experience of home for all our residents. For more information, please visit www.AllianceREIT.com.

SOURCE Alliance REIT

Contact us at [email protected].