As Canada’s largest residential real estate investment trusts drive up the country’s rental property prices through evictions and renovations, these moves highlight institutional investors’ human rights obligations, according to a new article by the Shareholder Association for Research and Education.
In the article, the SHARE said Canada’s residential REITs capitalize on tenant turnover and suite renovations to increase rental profits, raising prices in Canada’s largest city. The advocacy group based its conclusions on the 2021 and 2022 public filings of the country’s six largest residential REITs.
“A wide range of investors are exposed . . . to REITs in the residential sector — and investors have human rights obligations,” said Gabriela Ruiz, a research officer at the SHARE and the author of the article. “However, there are few tools to guide investors in understanding if and how the residential REITs they invest in uphold the human right to adequate housing and effectively address the associated risks.”
The SHARE estimated the $17.7 billion Canadian Apartment Properties REIT, Canada’s largest publicly traded residential property portfolio, rented its average Toronto apartment for $2,698 each month — roughly 76 per cent of the average Torontonian salary. Another, the Minto Group REIT, is estimated to charge the city’s residents an average of $2,648 per month.
The SHARE also found the six REITs aren’t disclosing information about eviction rates or about building maintenance, which constitutes a risk to investors. It recommended that REITs provide disclosures related to the affordability, habitability and tenure security of rental units.
The organization is also producing a new framework on responsible investment in housing. “The principles and framework document is in draft form and is currently being circulated for consultation with groups of investors and stakeholders,” noted the article.