Examining the Impact of Investing in Real Estate on the Housing Crisis in Canada

The housing crisis in Canada refers to the shortage of affordable housing, particularly in urban areas. The crisis has been building for several years, and it has been exacerbated by a number of factors, including:

1. High housing prices making it difficult for many Canadians to afford to buy a home.
2. Low vacancy rates resulting in high rents, making it difficult for many Canadians to find affordable rental housing.
3. Lack of new construction of affordable housing in many Canadian cities, leading to a shortage of supply.

Investing in real estate, such as through a public or private REIT, can impact the housing crisis in Canada in both positive and negative ways. Here are a few examples:

Positive Impacts of Real Estate Investing

• Increased supply: REITs can provide capital for affordable housing projects, which can help address the shortage of affordable housing in Canada as well as provide quality rental housing at affordable prices.
• Renovation and rehabilitation: REITs can buy properties that are in disrepair and renovate them, increasing the overall quality of housing available.
• Job creation: Investing in real estate can create jobs in the construction and related industries.

Negative Impacts of Real Estate Investing

• Speculation: Investing in real estate can lead to speculation and drive-up housing prices beyond what people can afford.
• Gentrification: Real estate investment can lead to gentrification, where working-class neighbourhoods are transformed into upscale areas, leading to the displacement of long-term residents and further exacerbating the housing crisis.
• Inequality: Real estate investment can increase income inequality, as investors who can afford to buy and hold properties benefit from the rising prices while lower-income individuals struggle to find affordable housing, particularly in expensive urban areas.

Alitis Private REIT

The Alitis Private REIT offers access to high-quality private real estate in one well-diversified solution. As equity partners, we work with reputable real estate developers and contribute to the development process by providing capital, negotiating deals, and contributing to project management decisions. By partnering with experienced real estate developers, we can also gain access to industry knowledge and expertise that can be used to make informed investment decisions and help to add housing units in communities where it is needed most.

Many of the development projects in the Alitis Private REIT are utilizing CMHC’s MLI Select Program which is an innovative new multi-unit mortgage loan insurance product focused on affordability, accessibility and climate compatibility. Incentives are available for new construction and existing properties.

• Affordability Criteria – The base affordable rents for the designated affordable units must not increase by an amount greater than the annual increase permitted under applicable legislation/regulations.
• Energy Efficiency Criteria – Attestation of a qualified professional as well as the use of third-party building standards and certifications to validate the energy efficiency commitments of your development.
• Accessibility Criteria – Based on the number of units that are considered accessible and projects must also be 100% visitable with all common areas within the building being barrier-free.

Hatley Apartments, a 48-unit apartment building in Colwood, BC is held in the Alitis Private REIT. This property is also 100% owned by Alitis and is also considered be to 100% affordable housing.  

Overall, investing in real estate and in REITs can impact the housing crisis in Canada, both positively and negatively. It’s important for investors to consider the potential social and economic impacts of their investments and to support REITs that prioritize affordable housing and sustainable development. It is our opinion that the Alitis Private REIT helps to create tangible assets that can benefit communities and provide a positive impact on the economy. If you would like to learn more, please contact us today.

Our Team at Alitis

Our dedicated team at Alitis has over 250 years of collective industry experience. But what makes us unique is the high level of integrity that every team member brings to the table.

Along with experience and integrity, each team member at Alitis shares the same commitment to our clients. At the end of the day, we measure our success based on the success of you reaching your financial goals.

If you’re interested in investing with Alitis, let’s have a conversation: