Niagara’s elected leaders are outraged by a company’s plan to convert residential homes into rental units in a community already struggling with a home shortage and rising house prices.
“There is definitely a concern there,” said St. Catharines Mayor Walter Sendzik, who also heads Niagara Regional Housing.
“We have a company that is looking for profit in the rental market,… which will only put additional pressure on the limited availability of single family homes in our community. “
Toronto-based Core Development Group plans to purchase $ 1 billion of single-family homes and turn them into rental properties in St. Catharines and other mid-size Ontario cities including London, Kingston, Hamilton, Barrie , Cambridge, Peterborough and Guelph.
Sendzik said that “the threat is that it erodes the affordability for young families to have access to a family home. This threatens to drive up rental costs in our community’s already tight rental market.
There is already a multi-year waiting list at Niagara Regional Housing for affordable housing, he added.
He said Niagara is not alone.
“If you look at the areas targeted by the company, they all face the same pressures that the Niagara region faces. We have one of the lowest numbers of single family homes in decades. They’re building in Niagara, but we’re late, and house prices have gone up almost 25 percent year over year, ”Sendzik said.
“That’s my concern, with a private equity firm looking to get into this kind of rental market. It’s a large conglomerate of companies with billions of dollars looking to maximize the opportunity to generate income on a monthly basis, and they do so at the expense of young people looking to enter the market as buyers. Of house.
He said it would push the dream of owning a home even further out of reach.
“You have that kind of predatory nature of businesses that are going to create market conditions that push young people away from the housing market,” he said. “It’s not good for society.”
Sendzik said there was little that municipalities could do to fix the problem, adding that it had to be managed by higher-level governments.
St. Catharines MPP Jennie Stevens raises the issue at Queen’s Park.
The NDP wrote Premier Doug Ford on Thursday to demand action.
“I call on you to take immediate action to prevent Core Development Group – and other massive property ownership and speculation companies – from turning a profit during the housing crisis in Niagara and across Ontario,” he said. -she writes.
His letter echoed many of the issues that Sendzik raised, such as rising house prices in communities already struggling with affordability.
She said it will “also force young people to leave this community to find affordable housing, leaving parents to watch their children have no choice but to leave the community in which they were raised.”
“Investors are already en masse evicting entire apartment buildings of long-time Niagara residents, often seniors, to raise rents and boost profits. Niagara homes are already facing bidding wars. The problem is out of control and families – especially young families – are paying the price. ”
Stevens urged Ford to pass the NDP plan to increase the non-resident speculation tax from 15 to 20 percent, and expand it to apply across Ontario while closing loopholes for real estate speculators.
“The risk of doing nothing is too high, as it is clear that billionaire investors are already buying properties in my community and jeopardizing parents’ dreams of seeing their children living in the same community,” said she wrote.
The company did not respond to an interview request on Friday, but speaking to the Toronto Star this week, Core founder Corey Hawtin defended the plan to buy single-family homes.
He said the company buys far less than one percent of the homes that are traded in the Ontario market each year.
“I really, deeply sympathize with the people who aspire to own a home across Canada but just can’t afford it,” said Hawtin. “We try to provide an environment where our tenants – ie young families, students, divorced people – can rent accommodation and have an experience in a neighborhood that they cannot afford to buy. . “
Hawtins said the company does not participate in bidding wars for the homes it buys, adding that most are already rental homes.
“There is a percentage made up of the population who are renters. And whether they’re renters because they can’t afford to buy, or because it’s the lifestyle they choose, the rental market grows exponentially with demand. And that will be the case for the foreseeable future, ”he said.