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LETTER: Governments need to rein in real estate trusts

'Extracting more income off the backsides of tenant families is all part of the strategy that governments have allowed,' says letter writer
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The major problems for housing in Canada are rental units for people to live in in order to have housing security, especially for low-income people who continue to bear the brunt of the housing issue over the past several decades.

The real estate investment trusts (REITs) who own apartment buildings treat their tenants who are the renters as cash cows, thereby deepening Canada’s ongoing nightmare of housing insecurity and homelessness. These REITs constantly are extracting even more money from the same properties they own. The legislation that was enacted in Canada in the 1990s exempted REITs from paying corporate taxes. These financial operators who have and own these REITs use strategies to their advantage to increase rental revenues called ‘repositioning.’ This is the extraction of even more money from the same properties they own.

In provinces in Canada, without rent control, this is also done by pushing rents as high as the market will possibly bear. In Ontario, this is very commonly done by landlords through loopholes in the rent control legislation, by pushing out long-term tenants through tactics landlords in Ontario constantly use as an excuse to evict and toss out tenant families into the streets, possibly becoming homeless.

In the absence of rent control in Ontario on vacant units called ‘vacancy decontrol,’ landlords can charge the next new tenant a much higher rental amount, making it much more lucrative for them and very financially rewarding for the owners and landlords to constantly evict tenants in Ontario as they have been doing for a very long time. Extracting more income off the backsides of tenant families is all part of the strategy that governments have allowed owners and landlords to do to tenant families.

From 1996 to 2021, REITs acquired 200,000 apartment units in Canada. One of Canada’s largest residential REITs grew their portfolio from 35,454 to 45,129 apartment units between 2015 and 2020 and, in those five years, that company became the new landlord of 10,000 families in Canada. This formula keeps working well for these landlords.

There needs to be a review by the federal government of the tax treatment of REITs to curb these massive excess profits. The provincial government in Ontario also has not made any efforts to curb excess profits being made by these REITs. The politicians in Canada, it seems, are allowing landlords to make excessive profits and, at the same time, they are making rental units unaffordable to low-income, working people and there seems to be no political will at either the federal or provincial or municipal levels of government to help rein in the huge profits landlords are making off the backsides of tenants.

Canada’s rental housing market is working well for landlords, and governments and politicians are assisting landlords throughout the country by allowing them to extract large amounts of income off the backsides of tenants, who have been struggling and transferring the large sums of money to landlords, who continually grow wealthy while families who are the tenants suffer and experience financial loss and housing insecurity. It is time that governments and politicians started to help people (many who are low-income families) who need to rent rental units in order that they can have housing security as opposed to constantly having housing insecurity.

Doug Abernethy