Single family homes are seen in an aerial view, in Surrey, B.C., on May 16, 2018.DARRYL DYCK/The Canadian Press
The federal government is seeking to restrict large investors from amassing single-family homes, as it tries to deal with the lack of affordable housing in the country.
With the launch of a formal consultation on Tuesday, Ottawa is asking the public for feedback on ways to curb the purchase of existing single-family homes by what it called “very large corporate investors.”
“Canadians purchasing a home should be bidding alongside other prospective homeowners, not against very large corporate investors,” the Department of Finance said on its website. Ottawa did not provide a definition for a “very large corporate investor.”
It is not clear if there are many of these types of investors in Canada. In the U.S., large companies and investors own thousands of single-family homes and rent them out. Also known as single-family rentals or SFR, the business model took off after the country’s housing crash in 2007.
In Canada, there is only one single-family home investor with any kind of profile. That company, Core Development Group Ltd., has a relatively small portfolio compared to its American peers. According to its latest comments, Core owns 550 single-family homes in the Ontario communities of Kingston, Peterborough, St. Catharines, Sudbury, Sault Ste. Marie and Timmins. Core did not immediately respond to a request for comment.
The federal government’s consultation is asking the public if they are aware of specific examples in Canada or other jurisdictions where large corporate investors have contributed to what it called “harmful financialization” of single-family homes. The government did not say how it defines financialization.
The consultation asks about the impact that financialization of single-family homes have on renters, first-time homebuyers and existing homeowners. It also asked what types of large corporate investors could be restricted; what tools could be used to deter financialization and whether those same tools could affect homebuilding.
As well, the government is asking for feedback on what types of investment activities could be restricted; how the activities could be defined and how to distinguish between good investments in housing supply and harmful investments.
The consultation only targets “single family homes” and makes no mention of corporations and large investors that have bought up swaths of rental-only apartment buildings or other investors who buy condo units. The Finance Department did not immediately respond to a question on why it is only focused on single-family homes.
The federal government’s consultation is one of the first steps in policy-making and does not necessarily lead to new rules. The deadline for feedback is Dec. 19.