Addressing Canada’s student housing crisis with industry: The role of purpose-built solutions
Canada’s post-secondary education system is globally recognized, attracting students from around the world. However, a severe shortage of student housing threatens this success, posing a broader socioeconomic challenge that demands urgent action.The Canadian housing market faces a significant supply and demand imbalance, with over four million homes needed over the next six years to restore affordability.* Other policymakers, such as the Canadian Human Rights Commission, believe this number could be even higher. Rising government charges and insufficient construction capacity have exacerbated this crisis.Without positive government intervention and policy adjustments — such as the recently introduced HST exemptions on rental housing — amid the currently challenged financial environment, the lack of housing starts witnessed in the past two years will persist, particularly in university cities and towns where demand for all housing is exceptionally high. The magnitude of the student housing shortfall Canada is experiencing an unprecedented shortfall in student housing, with a deficit of over 400,000 beds nationwide.** This shortage is particularly acute in the country’s 20 largest university markets, which host approximately 1.5 million post-secondary students but offer only around 170,000 beds.*** The result? An overwhelming majority of students are forced to compete for already limited and expensive rental housing, exacerbating the housing crisis in local communities. In university towns like Guelph, Ontario, the housing shortage is particularly severe, reflecting a broader trend across many such communities. The strain on local rental markets, driven by insufficient student housing, has led to rising rents and forced many, including students, into substandard or overcrowded accommodations. Compounding this issue, the provincial tuition freeze mandate for domestic students has compelled universities to increase international student intake to cover rising costs, further straining the housing supply. The role of purpose-built student accommodations Purpose-built student accommodations (PBSAs) offer a viable solution to this crisis. Unlike traditional rental units, PBSAs are specifically designed to meet the unique needs of students, providing them with safe, affordable and community-oriented living spaces.Countries like the United Kingdom and the United States have successfully implemented PBSAs at scale, significantly alleviating housing pressures on students and local communities alike. Off-campus PBSA accounts for 60 per cent in the U.S., 58 per cent in the U.K. and 69 per cent in Australia, but only 29 per cent in Canada.**** The PBSA market in Canada remains underdeveloped.To close the gap, we must incentivize the development of PBSAs through policy changes, financial support and streamlined regulatory processes. The recent introduction of PBSA in the Government of Canada’s Affordable Housing Fund, which aims to provide low-interest loans for new affordable housing projects, is a step in the right direction, though details have yet to be released. Still, more needs to be done given PBSAs are essential to drive affordable housing and economic growth, by alleviating existing housing stock that can be made available to the general non-student population. Student housing in Ontario amid ongoing municipal approval challenges Bill 185 in Ontario is a significant development for expediting approvals in the student housing sector. This legislation has enabled Forum Asset Management to unlock approximately 1,100 units across projects in Guelph and Toronto, providing University of Guelph and York University students with high-quality, community-focused housing.However, despite the progress made by Bill 185, developers continue to face headwinds, from continually escalating development charges (which in Toronto, according to data from Scotiabank, have increased by 2,000 per cent over 20 years) to higher construction and financing costs. The way forward: Collaborative efforts and policy reform The Canadian student housing crisis cannot be solved by developers alone. It requires a combined effort from all stakeholders, including government agencies, educational institutions and the private sector. Key policy changes, such as the inclusion of PBSA in the definition of affordable housing (which would create development charge exemptions) and the adoption of policies similar to Bill 185 across other provinces, are essential to unlocking the potential of this sector. Additionally, property tax exemptions for student housing catering to specific university student bases, both on and off-campus, should be created. These exemptions could play a pivotal role in supporting universities’ broader educational and community missions, regardless of whether the housing is university-owned or operated by the private sector.By lowering the operational costs for student housing providers, such exemptions could directly translate into lower rents for students. This is particularly critical as students often face significant financial pressures, including the burden of repaying student loans upon graduation. Alleviating financial strain allows students to focus more on education and well-being, and less on the economic challenges associated with finding suitable housing.*****Moreover, universities must take a more active role in facilitating the development of PBSAs on or near their campuses. The QUAD at York University is an example of what can be achieved when public and private entities work together toward a common goal. Canada’s housing crisis is multifaceted and impacts all Canadians as well as international students. By adopting supportive policies, we can create more PBSA, which delivers a “two birds, one stone” approach by freeing up traditional housing while providing students with the safe, affordable housing they deserve.Successful projects such as ALMA @ Guelph and The QUAD at York University offer a blueprint for creating vibrant communities that benefit both students and the broader population. Crucially, these projects require experienced developers who understand the unique needs of students, as PBSAs are far more than just conventional apartment developments — they’re about building communities that foster social belonging, well-being and positive environments essential to the development of our future leaders. * Canada Mortgage and Housing Corporation, Housing shortages in Canada, Updating how much housing we need by 2030.** Forum estimate using data from Bonard, Student Housing Market Canada. November 2023, and Statistics Canada.*** Bonard, Student Housing Market Canada. November 2023.**** Canada Mortgage and Housing Corporation, Canada’s Housing Supply Shortages: Estimating what is needed to solve Canada’s housing affordability crisis by 2030.***** Simplydbs. Student Housing Index Survey. Student housing and youth mental health: Survey finds strong correlation. Enjoying this article?Get the latest REM articles in your inbox 3x week so you stay up to date on the latest in the Canadian real estate industry Success! Email Subscribe The post Addressing Canada’s student housing crisis with industry: The role of purpose-built solutions appeared first on REM.
Balancing a Day Job with Real Estate Investing: How to Manage Your Time Effectively
Balancing a full-time job with real estate investing can be challenging, but it’s a common scenario for many investors who are gradually building their portfolios. Effective time management is the key to ensuring that both your day job and your investments thrive. Here are some strategies to help you manage your time effectively and maximize your success.Prioritizing TasksWhen you’re juggling multiple responsibilities, it’s essential to prioritize your tasks. Start by identifying the most critical tasks for both your job and your real estate investments. For your investments, this might include finding new properties, managing tenant relations, and ensuring maintenance issues are addressed promptly. For your day job, focus on tasks that have the most significant impact on your performance and career growth.Creating a ScheduleA well-structured schedule is crucial for balancing your time effectively. Use a calendar to block out specific times for your real estate activities, such as property viewings, tenant communications, or bookkeeping. Schedule these activities around your work hours, making use of early mornings, evenings, and weekends. By setting aside dedicated time for each activity, you can avoid feeling overwhelmed and ensure that nothing falls through the cracks.Delegating and OutsourcingOne of the most effective ways to manage your time is by delegating or outsourcing tasks. If your budget allows, consider hiring a property manager to handle day-to-day operations, such as tenant communication, rent collection, and maintenance coordination. This frees up your time to focus on your job and strategic decisions related to your investments. You can also outsource tasks like bookkeeping, marketing, and even property searches to professionals who can manage them more efficiently.Leveraging TechnologyTechnology can be a significant time-saver for busy real estate investors. Property management software can automate rent collection, track maintenance requests, and generate financial reports. Online platforms make it easier to search for properties, analyze potential investments, and communicate with tenants. By leveraging these tools, you can streamline your processes and reduce the time spent on administrative tasks.Setting BoundariesIt’s essential to set clear boundaries between your day job and your real estate activities. Avoid letting your real estate investments interfere with your work responsibilities, as this could jeopardize your job. Similarly, try to avoid working on your day job during the time you’ve allocated for real estate activities. By maintaining a clear separation, you can focus more effectively on each task and reduce the risk of burnout.Focusing on High-Impact ActivitiesWith limited time, it’s crucial to focus on activities that have the most significant impact on your real estate investments. Instead of getting bogged down in minor details, prioritize activities that contribute to your long-term goals, such as identifying new investment opportunities, securing financing, and building your network. By concentrating on these high-impact activities, you can make the most of your limited time and drive your investments forward.Staying OrganizedOrganization is key to managing multiple responsibilities. Keep detailed records of your real estate activities, including property information, tenant communications, and financial documents. Use tools like spreadsheets, cloud storage, or project management software to stay organized and ensure that you can easily access important information when needed.Balancing a day job with real estate investing requires careful time management, prioritization, and the strategic use of resources. By creating a structured schedule, leveraging technology, delegating tasks, and focusing on high-impact activities, you can successfully manage both your job and your investments. Remember, the goal is not just to juggle both responsibilities, but to excel in both areas, paving the way for long-term success.
Canada’s “Boldest” Mortgage Reforms: Unexpected Changes Announced
On September 16, 2024, the Government of Canada introduced the most significant reforms to mortgage regulations in decades, aiming to unlock homeownership for more Canadians, especially younger generations struggling with affordability. These sweeping changes were outlined in a news release from the Department of Finance, signalling a shift in policies to make it easier for Canadians to purchase homes amidst rising housing costs. The changes came as a surprise to many. The new rules, which came into effect on August 1, 2024, include transformative updates that are expected to have wide-reaching effects on the housing market. Key Changes to Mortgage RulesThese reforms, described as the boldest mortgage changes in decades by the federal government, are intended to help more Canadians, especially first-time homebuyers and younger generations, secure homeownership. The changes will also impact investors in preconstruction properties, making mortgages more accessible. Introduction of 30-Year Amortizations for Insured MortgagesOne of the most significant reforms is the expansion of 30-year amortizations for insured mortgages, a measure designed to reduce monthly payments for borrowers. Effective December 15, 2024, first-time homebuyers will be able to access 30-year insured mortgages for all types of homes, not just new builds. Additionally, this change will apply to all buyers of preconstruction homes, including investors. This builds on a previous amendment, effective August 1, 2024, which allowed 30-year amortizations for first-time homebuyers purchasing new builds.This change will provide borrowers with longer terms to repay their mortgages, thereby reducing their monthly payments by approximately 9% compared to 25-year amortizations, with all other factors being equal, according to an Edge Realty special report. The goal is to make homeownership more affordable, particularly in expensive markets where housing prices have made it difficult for many to enter the market.Increase in Insured Mortgage Cap to $1.5 MillionAnother significant change is the increase in the insured mortgage price cap from $1 million to $1.5 million. This adjustment, effective December 15, 2024, reflects the rising cost of homes in Canada’s more expensive cities, such as Toronto and Vancouver, where the average home price often exceeds $1 million. This measure will allow more buyers to qualify for an insured mortgage with a down payment of less than 20%.With this change, buyers in high-cost markets will need to put down 5% on the first $500,000 and 10% on the remaining portion above that. For a $1.5 million home, the minimum down payment would be $125,000, leaving a mortgage of $1.375 million. This policy will make it easier for buyers in cities where home prices have historically excluded them from insured mortgage programs.Building on the Ability to Switch Lenders Without RequalifyingBuilding upon earlier changes introduced by the Canadian Mortgage Charter in Budget 2024, which allowed insured mortgage holders to switch lenders at renewal without requalifying under the stress test, the new mortgage changes further expand this flexibility. Now, as of December 15, 2024, all insured mortgage holders, including those purchasing preconstruction homes, can switch lenders without requalification. This provision is designed to promote greater competition among lenders and ensure that borrowers have access to more competitive rates without the barrier of undergoing a new stress test.The original policy was seen as a way to empower insured borrowers with more options during renewal. By broadening its application to preconstruction homes and investors, the new changes enhance this flexibility for a larger segment of the market, according to the Edge Realty special report. Investors, in particular, stand to benefit by gaining easier access to more favourable terms when financing preconstruction properties.This adjustment is intended to drive competitive pricing in the mortgage market, as borrowers will no longer be locked into their existing lender due to the requalification process. This increased competition could lead to better mortgage rates and conditions for both homeowners and investors, especially in a high-interest-rate environment.Implications for Homeowners and InvestorsIncreased Access for First-Time HomebuyersThe extension of 30-year amortizations and the raised price cap will likely benefit first-time homebuyers by reducing their monthly payments and lowering the threshold for mortgage qualification. These changes are particularly relevant in markets where high prices have made homeownership difficult for younger buyers. The expansion of the amortization period from 25 to 30 years is seen as a way to provide more time for homebuyers to pay off their mortgage, which could help ease the financial burden.More Opportunities for InvestorsFor real estate investors, the reforms introduce a new opportunity. Investors will now be able to access 30-year insured mortgages for preconstruction homes, which was previously limited to first-time homebuyers. The Edge Realty special report mentions that this could potentially boost investor participation in the preconstruction market, especially as sales of preconstruction condos have slowed in recent years due to rising prices. The increased availability of insured mortgages could encourage more investment in new builds, particularly in major cities where demand for rental units remains high.Looking ForwardThe government’s intention behind these reforms is to address the affordability crisis while supporting housing supply growth. The expansion of insured mortgages to a broader range of buyers, including investors, could stimulate more construction of new homes and condos, which aligns with the government’s broader goal of unlocking nearly 4 million new homes as part of its national housing strategy.However, as these changes are implemented, the long-term impact on the housing market remains to be seen. While the goal is to make housing more affordable, it’s also possible that the increased purchasing power of buyers could drive up prices in some markets, particularly in the short term, or that other unintended consequences arise.
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