Fears of Unintended Consequences Proven as New Survey from Landlord Association Shows Policies Put 20,000 Planned New Apartments in Jeopardy
TORONTO, May 5, 2017 /CNW/ - The Federation of Rental-housing Providers of Ontario (FRPO) today released the results of a new survey of its members, conducted following the Wynne government's recent introduction of new rental housing policies. The survey shows that the announced policy revisions have put the development of 20,000 planned new purpose-built apartment units under review.
Through the survey of FRPO members either in the approval phases or planning to launch new rental developments prior to the April 20th announcement, the organization identified at least 20,000 units which will now be reviewed before proceeding due to the proposed rental legislation. FRPO calculates that the potential investment in Ontario rental housing now at risk, should these projects not proceed, is $6.5 billon.
"I'd like to believe the risk to tens of thousands of new purpose-built rental suites, and the loss of billions of dollars in investment in Ontario were the unintended consequences of last month's policy announcement by the government," says Jim Murphy, President and CEO, Federation of Rental-housing Providers of Ontario.
"This year was on track to be the best for new rental construction in decades, but this sudden decision to change the rules has thrown that all into doubt" adds Murphy. "FRPO anticipated the potential harm these sweeping legislative changes would have on the industry- and on tenants- and sought opportunities to work with the government on viable alternatives. Our efforts to engage were not successful, and we are now seeing the consequences of the government's decisions."
While the results of the survey do not demonstrate that all planned rental projects will be paralysed by the new rental environment, thousands of units will fail to move forward, while thousands of others may be converted to condominium housing.
Some of Ontario's biggest and most respected rental housing providers, including companies like Medallion Corporation, Effort Trust, and Capreit, responded to the FRPO survey, indicating that the new policies are forcing the review of planned purpose built rental projects.
An established rental developer in the Golden Horseshoe, Effort Trust's David Horwood, says that developers outside the GTA were proposing new rental buildings in communities like Hamilton, Ancaster, Stoney Creek and Dundas, however, "the elimination of the 1991 Exemption and limits to legal above guideline increases will force us to consider completing new developments not as rental, but as condominiums. A market in which our development and financing costs aren't fixed, but our revenues are fixed, makes purpose built rental high risk for tenants in our communities."
The Federation of Rental-housing Providers of Ontario (FRPO) is the province's leading advocate for quality rental housing. FRPO represents over 2,200 rental housing providers who supply and manage homes for over 350,000 tenant households across Ontario. www.frpo.org
SOURCE Federation of Rental-housing Providers of Ontario
For further information: Jim Murphy, FRPO, Phone: 416-385-1100 ext. 20, Email: [email protected]; Danny Roth, Brandon Communications, Phone: 416-414-9064, Email: [email protected]; Medallion Corporation: Howard Paskowitz, [email protected], Effort Trust: David Horwood [email protected]