More flexible regulations needed to curb housing crisis: Quebec real estate report

The construction of 130,000 additional doors by 2031 will be necessary to stem the housing crisis, according to the Corporation of Real Estate Owners of Quebec (CORPIQ), which on Tuesday unveiled the results of a study on the state of the rental market in the province.

Two years ago, the shortage of rental units equivalent to a vacancy rate of three per cent, considered to be a balanced threshold, was 16,300 doors. It should be noted that between 2012 and 2021, rental housing stock grew by 30 per cent, according to the report by Aviséo Conseil, which is based mainly on available figures from 2021 or 2022.

Of the 130,000 new rental units needed, 46.9 per cent should be made available in the Montreal metropolitan census area (CMA).

In addition, 42 per cent of the current housing need is outside the province's largest metropolitan areas. "The deficit and the needs are there because the construction capacity is not there, it is concentrated more in Montreal and Quebec City," said Jean-Pierre Lessard, an economist for Aviséo Conseil and author of the study.

SETTING THE RECORD STRAIGHT

With this fresh data, CORPIQ hopes to dismantle several preconceived ideas about rents in Quebec.

The report indicates that Quebecers pay less for housing than elsewhere in Canada, allocating an average of 18.1 per cent of their income to rent compared to 22.9 per cent in the rest of the country.

Lessard and Marc-André Plante, Director of Public Affairs and Government Relations at CORPIQ, also point out that the rise in rents is not as pronounced as some would have us believe.

"The increase in the average rent is when there has been an increase in supply," Lessard said. "Sure, newer rents reflect the rent economy, so they're more expensive, but when we talk about the increase in rent prices, we can't say it's the same unit that went up X per cent."

ADVOCATING FOR MORE FLEXIBILITY

To achieve the objective of balance in the rental market, CORPIQ is pleading for more flexibility on the part of both the provincial government and the municipalities, whose "current taxation and public policies are detrimental to the development of a quality and abundant rental supply."

The report points out that "the regulatory burden is five times higher for rental housing than for single-family homes in Montreal," for example, and that 136 municipalities in Quebec tax buildings with six or more units more heavily, which discourages their construction.

The document makes 24 recommendations, some of which call for administrative flexibility, such as the elimination of minimum parking requirements and the repeal of municipal bylaws prohibiting "soft density."

"Densification is not necessarily about building 30-storey buildings," said Plante. "It could mean allowing a triplex in a neighbourhood of single-family homes, or putting a unit in the basement of a house or in an accessory building."

Building code reform is also desired, as it's a burden for many rental property owners, who typically own only one or two properties and rely on the investment for their retirement.

The authors of the study are at a loss to explain the obligation to call on others when minor work has to be done, in addition to the work that must be done by professionals for safety reasons, such as electrical work.

"Owners find themselves with an administrative burden. Can they renovate their bathroom tile themselves, for example? We should allow a little more flexibility, especially in a context of scarce manpower," said Lessard.

The study also proposes the creation of a renovation assistance program for rental buildings that would support the maintenance of existing buildings.

"The building stock is still old," Lessard said. "About 70 per cent of the stock is over 40 years old, and that rises to over 80 per cent in Montreal. There are 1.3 million units built before 2011. These homes exist in the market, they are getting older and older."

"The government has a vested interest in helping to maintain the existing stock because that's where most of the affordable housing is," Plante added.

In this sense, government support would be welcome to ensure the sustainability of these units, which are the most affordable on the market.

Tenants would benefit from this measure because the subsidies are subtracted from the amount on which the rent increase is calculated before the TAL," says Plante. Renovations would also allow for energy upgrades that would result in a lower bill for the tenant paying their electricity bill.

This story was written with financial assistance from the Meta Exchange and The Canadian Press for news.

This report was first published in French by The Canadian Press on May 9, 2023.