Thursday, September 26, 2013

Toronto seeks incentives to encourage purpose built rental buildings

A shortage of new rental apartments has Toronto considering giving builders a break on development charges if they’ll build rental buildings rather than condos.

Assuming city council gives final approval next month, the development charge on a 2-bedroom unit, whether condo or rental, will rise in phases, from $12,412 now to $21,203 by February 2016.

Development charges boost city coffers by an average of $100 million annually — $150 million last year. Under the changes endorsed Tuesday, the city’s take would rise to the range of $170 million to $250 million a year, depending on development activity.

Over the past decade, only a few hundred rental units have been built each year, in a city whose population is rising by almost 40,000 a year.

Purpose-built apartment buildings have been rare since the advent of rent controls. Rented condos have helped fill the gap, but don't offer the security to the tenant that rental buildings do.

To read the full article on purpose built rental buildings, please click here

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