With Canada’s home prices now at unattainable heights for would-be homebuyers, coupled with the climbing cost of living, it’s time to get serious about the country’s rental market.
Helping the cause, today, Canada Mortgage and Housing Corporation (CMHC) announced the launch of its latest multi-unit mortgage loan insurance product, MLI Select. The new product replaces the 2017-launched MLI Flex.
“With almost one third of Canadian households renting their homes, preserving existing rental stock and increasing rental supply have never been more important to building healthy communities in Canada,” reads a CMHC-issued press release.
According to the organization, MLI Select incentivizes the preservation and creation of rental supply while also addressing the need for affordable, accessible, and climate compatible housing across the country.
The concept construction of affordable housing.
The product relies on a point system to rate a rental housing provider’s commitment to affordability, accessibility, climate compatibility, or a combination of the three. The greater the social and environmental benefits of a rental housing property, the broader the incentives. This means things like lower insurance premiums and longer amortization rates. Incentives will be available for both existing and new properties.
READ: Fed's Affordable Rental Housing Programs are Falling Far Short
Based on the points allocated, benefits can include leverage of up to 95% and amortizations of up to 50 years.
Notably, one of the key new aspects of MLI Select is basing affordability on qualifications on median renter household income for both existing and new properties. “With median renter household income being considerably less than overall median household income, MLI Select aims to stimulate the preservation and creation of affordable rental housing for all Canadians,” reads the release.
“As Canada’s only provider of multi-unit mortgage insurance for residential properties, we believe that MLI Select will be a critical component to achieving better housing outcomes for renter households. Increasing rental supply and preserving existing rental stock will offer more affordable options for renters, including those in Core Housing Need, getting us closer to our aspiration of by 2030, everyone in Canada has a home they can afford and that meets their needs.”
Applications under this new program will be accepted beginning today.
With an unwavering lack of supply characterizing Canada's rental market, the hope is that this initiative helps to get more apartment buildings constructed across the country -- and quickly. Of course, it's just a drop in the supply bucket. but at least it's something.
