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Aussie initiative could help solve Canada’s housing affordability crisis

Aussie initiative in Canada

Affordable housing could be the next frontier for investments

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Partner, National Human & Social Services Leader

KPMG in Canada

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Houses in a row

Housing ownership is out of reach for many potential first-time home buyers. Specific populations are also bringing new housing needs which local housing providers must respond to, including Ontario's aging population and new arrivals to Canada.

Rising housing prices are pushing more people into a crowded (and more expensive) rental market with little hope of owning their own home.

Is there a role for institutional investors?

We know there is no one single solution to affordable housing, rather it is about providing a range of options across the continuum and market. Moreover, governments across all levels do not have the resources to solve this issue on their own – nor should they have to.

An interesting missing voice in the affordability housing debate has been the private sector – no, not the builders, developers or other associated services, rather, the investment sector (particularly the institutional investors). This sector has access to large capital pools that can be used to build affordable housing at scale – and by scale I mean in the thousands or tens of thousands. This is the scale of response required to make a realistic difference for affordable housing.

Most institutional investors invest in infrastructure (i.e. roads, rail, and airports) because:

  • it is a stable investment generating stable returns and usually with a government incentive included (this could be a subsidy or agreement about future competition); or
  • the investments have monopolistic characteristics.
  • Affordable housing can take on these characteristics if it is reframed as essential community infrastructure.

So, what does this have to do with the Canadian Housing Strategy?

Download the full article to learn more.

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