New technical report reveals that investors bank tax-free earnings as tenants struggle to pay rent
READ THE FULL REPORT HERE.
TORONTO—The 4.8 million women, men and children living in rental housing in Ontario remain mired in the province’s worst housing crisis in more than a decade. But the bad news for millions of renter households is a virtual goldmine for investors and their financial advisors, including a former assistant deputy provincial housing minister. The province’s over-heated rental market is showering them with big returns even as tenants struggle to make their monthly rent. They are buying up rental buildings with moderate rents in Toronto, Mississauga, Burlington, St. Catharines, Ottawa, London, Brampton, Kitchener-Waterloo and other communities, then using weakened tenant protection laws to drive up rents and bank the profits, a big chunk tax-free.
These findings and other details about Ontario’s province-wide housing crisis and homelessness disaster are revealed in a new technical report “Profiting from a manufactured housing crisis,” released today by the Ontario Alternative Budget Working Group of the Canadian Centre for Policy Alternatives. The report was written by Michael Shapcott, a Research Associate at the Centre for Urban and Community Studies at the University of Toronto.
The study reports that Dino Chiesa, a former assistant deputy minister in the Ontario Ministry of Municipal Affairs and Housing, is now Chief Executive Officer of Residential Equities Real Estate Investment Trust (ResREIT). He is helping investors take maximum financial advantage of provincial policy and program changes. Two recent ResREIT acquisitions include:
- 100 Wellesley Street East in Toronto, a 424-unit apartment building that ResREIT bought in 1999. Before ResREIT, the average rent was $839. Two years later, rents had jumped 22% to $1,021. The province’s official rent review guideline was 2.6% in 2000 and 2.9% in 2001. ResREIT raised the rents four times higher than the guideline amount.
- 2515 Bathurst Street in Toronto, a 115-unit apartment building bought in 1998, when the rents were an average of $660. Ontario’s official rent review guideline was 3% in 1999, 2.6% in 2000 and 2.9% in 2001. ResREIT pushed up the rents 37% over three years to $902, well over four times the official rent review guideline.
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