Developer disappointed with new federal rental supply measures
The top executive of a Canadian development company says new federal funding efforts to spur rental unit construction have missed the mark.
Adrian Rocca, CEO of Fitzrovia, told BNN Bloomberg that in the current environment, overall margins for developers “are getting squeezed,” contributing to less supply coming onto the market, and he thinks the recently announced measures don’t go far enough to help.
“We really need some additional help. I thought we were going get that through the fall economic statement, but I think it really fell short,” he said in a Wednesday interview.
“It’s not what we were looking for and I am hoping there’s going to be some additional incentives brought into the market quickly.”
Rocca suggested two incentives that he argued could “triple or quadruple” the new supply of rental units.
“One is protecting the existing housing stock,” he explained. “There are 30,000 units where the developer or landlord right now is actively pursuing converting that product to condo. We have to protect that stock, it has to stay as rental.”
He also made the case that the HST waiver on new rental builds should apply to existing housing stock.
Rocca also suggested a “property tax abatement strategy, which he said has been “really been effective” at creating new rental supply in the U.S.
Such policies involve governments waiving some property tax dollars, which Rocca said has “disproportionate benefit for developers and … small relative cost for the government.”