Prominent B.C. real estate marketer Bob Rennie says he has pitched prime minister-designate Mark Carney on encouraging foreign investment in rental housing development.
Speaking March 4 to a panel of developers at Conversations Live, an industry-sponsored event hosted by Postmedia, Rennie suggested an arrangement involving the Canada Mortgage Housing Corp. (CHMC), the taxpayer-backed Crown corporation that provides affordable housing financing and market-based mortgage insurance.
“I’m working with Carney – surprise – and I’m trying to get a rental program in where people can buy, put it into a 25-year pool, get a preferred rate from CMHC and let’s allow foreign buyers to buy it; they have to rent it out for 25 years and it will show the world we are open for business, because right now all of our governments are not showing that we’re open for business,” Rennie told the panel.
Rennie — whose business involves a presently slumping pre-sale condo market — said another concern prompting the concept is that Canada will have negative population growth for the next two years.
Rennie said he is aware of the notion immigration should be targeted to labour markets and growth should be tied to housing supply.
Rennie’s idea prompted criticism from housing analyst Stephen Punwasi at BetterDwelling.com on March 10.
Punwasi said such a plan “should create significant concerns around the issue of concentrating the country’s economy and reinforcing the declining homeownership rate.”
And Punwasi pointed out that foreign owners of Canadian rental units would mean money, in the form of rent payments, would be exiting the country.
“The plan is just about as bonkers as one would assume and similar to the one that got Canada into this position in the first place,” stated Punwasi, who also questioned using CMHC as a backstop.
Rennie told BIV in an expletive-laden response that he did not care about any criticism and that at his age, 69, he is merely trying to find solutions to the affordable housing crisis in Canada.
“I do think we should show we are open to business,” said Rennie, whose comments come about a decade after significant policy attention was placed on foreign buyers in Vancouver’s real estate market.
The chief concern became how foreign money inflated home prices and helped decouple them from local middle-class income earners.
Housing data research in 2018 showed municipalities in the region with the most non-resident participation in the housing market had the biggest gaps between average house price and average income.
West Vancouver, Vancouver, Richmond and Burnaby had average house price to average income ratios between 22 and 33, by 2018.
A typical first-time homebuyer can only qualify for a mortgage that is up to 4.5 times their annual income.
Rennie did cite concerns at the panel over who developers can market homes to now, claiming those Canadians without generational wealth have been shut out of the housing market.
“I can’t get into the market without a rich mom and dad,” he said.
But Rennie also alluded to his opposition to the 2016 foreign buyers’ tax, re-stating it stoked racism against people of Chinese nationals (who accounted for 90 per cent of non-resident purchasers in the months leading up to the tax, according to provincial government data released that year).
The tax was challenged on grounds it was discriminatory but the B.C. Supreme Court and B.C. Court of Appeal ruled otherwise.
The panel happened to begin with a presentation by Research Co. pollster Mario Canseco, who began the discussion by noting the current federal government ban on non-Canadians (excluding international students) purchasing residential property has support of three in four Canadians.
“This is one of those rare occasions in which agreement spans across party lines,” he said.
Developer Michael Geller said the prevailing public sentiment on foreign ownership and resulting policy changes has led to the pre-sale market drying up.
“As a result of all of that, all of the investors have left the market, and those are the people who were buying the pre-sales that all the … bankers are insisting upon,” Geller said.
