The Canadian Federation
of Apartment Associations, the national voice of apartment owners and managers
in Canada held it’s annual meeting in Saskatoon this past summer. Representatives
from apartment associations stretching from the Atlantic (Halifax) to the
Pacific (Victoria) and everywhere in between (including yours truly) attended
to discuss national political and economic issues which affect property
managers. Those in attendance represented over 600,000 suites, truly a
significant number.
As always, taxes, and in particular the inequitable tax treatment of apartment owners by the federal government, dominated the discussions.
Tex Enemark of the Rental Housing Council of B.C. reported on a comprehensive study commissioned by the Federation last year. The study clearly showed how owners of rental properties are being dscriminated against and concluded that tenants will suffer from an ever decreasing supply of rental housing unless the federal government modifies the tax system.
Authored by respected housing economist Frank Clayton, the study was presented in November to the House of Commons Finance Committee as well as senior officials in Finance Minister Paul Martin’s office. Somewhat astonishingly the staff at finance countered the reports arguments by stating that if apartment owners need to improve their cash flow they could simply raise rents.
Simply raise the rent !!
Are the Ottawa mandarins totally oblivious to rent control legislation, particularly in Manitoba?
Let there be no misunderstanding, the CFAA is not asking for a tax break for the owners of rental property, but rather to be treated the same as a small and active business. To be allowed a rollover like the hotel and motel business, to be treated the same as ownership housing with respect to the G.S.T. and so on.
While the initial reception was discouraging, the CFAA is not discouraged. The Federation is presently preparing a micro economic study on the return on investment for an apartment building versus a motel. This new study will be used in the continuing efforts to gain the attention of the Finance Minister and his staff.
The inequitable tax treatment of rental property, which is in no small measure responsible for the absence of any new construction, was a natural lead in to another major issue addressed by the delegates, that of “homelessness”.
The issue of “homelessness” is quickly becoming a public issue in Canada. Proof of this is that the Prime Minister has now appointed a Minister Responsible for the Homeless.
Unfortunately this issue is being confused with the issue of lack of affordable housing in Canada. While the two issues are not the same (homelessness is a social and health issue), many activists, politicians and commentators are treating them as the same. This is creating problems for those in the rental market industry as governments at all levels are increasingly basing policy decisions on their perceptions of the homeless.
In an attempt to counter part of this misunderstanding, the CFAA released a report by noted economist Greg Lampert that demonstrated that shelter allowances are the best means to house low income tenants. CFAA past president Phil Dewan said that “it is evident that shelter allowances will go a long way toward helping people get the housing they need. Making use of existing housing stock is not only practical, it represents good value”.
It is a given that governments are going to want to be seen to be doing something on this issue. There fore we want them to do the right thing. If owners and managers don’t become actively involved and present their side of the story, governments will likely react by responding to those who are pushing for more public housing.
The CFAA has also been active on behalf of landlords in the matter of cable deregulation as ordered by the Canadian Radio and Telecommunications Committee. During the past year, the Federation joined forces with BOMA Canada and the Canadian Institute of Public Real Estate Companies to make representations to the C.R.T.C. in order to advance the interest of landlords.
Given the rapid changes in communication technology this issue often becomes overwhelming for landlords. But the core issue is a simple one. Property rights, and the CFAA continues to assert the right of a property owner to determine who shall enter his building.