CMHC Is Quietly Becoming A Rental Housing Powerhouse

[jollyburger]

There is a quiet revolution unfolding at the heart of Canada’s housing system — not on the skyline, but on the balance sheet of its most influential insurer, Canada Mortgage and Housing Corporation (CMHC).

For decades, CMHC had been the invisible hand helping Canadians buy homes. It backed buyers, stabilized lenders, and injected liquidity into the market when confidence wavered. But as revealed in its 2024 annual report, that hand has shifted. Much like our European counterparts, who have seen decades of declining homeownership in favour of institutional rental housing development, CMHC has begun lifting a different pillar of the housing economy: rental development.

https://storeys.com/cmhc-quietly-bec...al-powerhouse/

[djmk]

Originally Posted by jollyburger

https://storeys.com/cmhc-quietly-bec...al-powerhouse/

interesting graph of housing ownership. I wonder how this will change as boomers start to "phase out" in the next 10 years or so. I would imagine they are the bulk of owners without mortgages

Also, quite the wild outlier with the Netherlands. i wonder whats going on there

[whatnext]

Originally Posted by djmk

interesting graph of housing ownership. I wonder how this will change as boomers start to "phase out" in the next 10 years or so. I would imagine they are the bulk of owners without mortgages

Also, quite the wild outlier with the Netherlands. i wonder whats going on there

Interesting, I didn't know that either. According to this paper:

Because housing affordability has proven to be an ongoing challenge in the United States, there is renewed interest in European-style social housing. While the German, Swiss, and Viennese models are often cited as exemplars, the Dutch model may prove most relevant to US initiatives. In the Netherlands, non-profit housing associations (called woningcorporaties) own two-thirds of the nation’s rental units, housing almost 30 percent of households for an average rent of €561 (about $600) per month. In contrast, in the US, private entities own almost all rental units in the US: record numbers of renters are paying more than 30 percent of their income on housing, the number of units renting for less than $1,000 dropped from 27.5 million in 2011 to 21.1 in 2021, and near-record numbers of renters are cost-burdened.

In my new paper, “The People’s Housing: Woningcorporaties and the Dutch Social Housing System - Part 2: The Mechanics,” I examine the Dutch system, showing how its design enables housing associations to sustain their operating budgets with rental income and self-finance new social housing developments. In an earlier paper, I described the evolution of this more than century-old system; in the new paper, I examine the institutional structure, governance relationships, and financing mechanisms that characterize the Dutch system, which I believe could prove inspirational for other countries looking to address affordable housing crises...

https://www.jchs.harvard.edu/blog/wh...housing-system

[djmk]

Originally Posted by whatnext

Interesting, I didn't know that either. According to this paper:

Because housing affordability has proven to be an ongoing challenge in the United States, there is renewed interest in European-style social housing. While the German, Swiss, and Viennese models are often cited as exemplars, the Dutch model may prove most relevant to US initiatives. In the Netherlands, non-profit housing associations (called woningcorporaties) own two-thirds of the nation’s rental units, housing almost 30 percent of households for an average rent of €561 (about $600) per month. In contrast, in the US, private entities own almost all rental units in the US: record numbers of renters are paying more than 30 percent of their income on housing, the number of units renting for less than $1,000 dropped from 27.5 million in 2011 to 21.1 in 2021, and near-record numbers of renters are cost-burdened.

In my new paper, “The People’s Housing: Woningcorporaties and the Dutch Social Housing System - Part 2: The Mechanics,” I examine the Dutch system, showing how its design enables housing associations to sustain their operating budgets with rental income and self-finance new social housing developments. In an earlier paper, I described the evolution of this more than century-old system; in the new paper, I examine the institutional structure, governance relationships, and financing mechanisms that characterize the Dutch system, which I believe could prove inspirational for other countries looking to address affordable housing crises...

https://www.jchs.harvard.edu/blog/wh...housing-system

wild stuff. I may read that tonight while I eat my pannekoek

[jollyburger]

2023 look into the housing market in the Netherlands from the IMF.

https://www.elibrary.imf.org/view/jo...le-A003-en.xml

Fun fact: Vancouver Island is ~3.4 times larger than the Netherlands in terms of land mass.

[jollyburger]

While lower-cost financing and insurance through the Canada Mortgage and Housing Corp. (CMHC)’s Apartment Construction Loan and MLI Select programs have driven construction, many in the industry anticipate changes as the federal government rejigs its housing strategy. This promises to bring changes to lending criteria as well as how CMHC supports builders.

“It’s an interesting time because CMHC has been responsible for about approximately 90 per cent of all multi-family new construction in the country,” said Nadeem Keshavjee, founder and president of GreenBirch Capital Inc., a lender based in Calgary that has financed about 300 MLI Select approvals over the past four years.

However, CMHC is pulling back and becoming more stringent with respect to deal assessment.

“I think in the new year we’re going to see more financing shift to the non-CMHC market,” he said. “That’s going to mean financing may be more expensive, the leverage may not be as high, and so that in turn will mean partnerships, joint ventures, creative solutions. Equity investments are going to be more important than ever in getting projects off the ground.”

Changes this past July introduced premium discounts for projects achieving affordability, accessibility and energy efficiency goals.

Premium schedules and rates were also updated to encourage specific types of construction, such as seniors housing.

“CMHC’s 2025 updates to multi-unit mortgage loan insurance – including the move to a standardized, risk-based premium approach and the new MLI Select premium discount schedule tied to affordability, accessibility and energy efficiency outcomes – are influencing how rental housing projects are being structured and financed,” a briefing note from Vancouver-based mortgage lender CMLS said.

https://www.westerninvestor.com/brit...hifts-11556433