Canada’s mayors have sounded the alarm about a drastic shortage of rental housing across the country.

One-third of Canadians are renters, yet apartment construction has accounted for just 10 per cent of all new residential building over the last 15 years, according to a new report released by the Federation of Canadian Municipalities (FCM) Tuesday.

At the same time, apartment buildings have been razed or converted to condos at such a frenetic pace, the total number of rental units actually decreased across the country by about 18,000 units between 2000 and 2010, the umbrella group for Canada’s municipalities said during a news conference in Ottawa.

Yet the Canada Housing and Mortgage Corp. estimates growth in tenant households will average about 50,000 a year across Canada over the next decade.

The report makes no mention of provincial rent controls and the impact they may have had in discouraging the construction of apartment buildings.

Instead, the FCM focuses most of its attention on Ottawa. It calls for creation of the Building Canada Rental Development Direct Lending Program to stimulate investment in rental units, citing how the current condo boom has helped push the cost of land out of reach for rental construction.

The FCM also calls for tax credits aimed at stopping the erosion of existing units and an eco-energy tax credit to stimulate improvement of what stock is left.

“New rental construction will give cash-strapped young families, new immigrants, and an aging population housing options they can afford and protect construction jobs as governments turn off the (post-recession) stimulus taps,” said FCM president Berry Vrbanovic.

A virtual doubling in house prices the last decade has pushed home ownership further and further out of reach of many Canadians and left municipalities like Brampton with waiting lists of 15,000 people and growing for affordable rental units, said Brampton mayor Susan Fennell, also co-chair of FCM’s Big Cities Mayors caucus.

While there is enough social housing in Canada right now for almost 700,000 lower-income Canadians, that makes up just 5 per cent of the country’s housing stock and isn’t nearly enough to keep up with demand, the report notes.

Condos have become a secondary form of rental accommodation in bigger cities like Toronto, but they are often too high-priced for many renters, and too small for most families, Fennell noted.

The rental shortage is also making it difficult for workers to relocate to places where there may be jobs, but virtually no place they can afford to live, she said. It’s also forcing families into substandard or unsafe living arrangements, add Fennell.

Brampton has done what it can so far — creating a few hundred affordable rental units by streamlining approvals, preventing the demolition of existing rental stock and offering tax exemptions to both private and non-profit builders.

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“But we can’t do it alone,” said Fennell. “The glaring fact today is that vacancy rates are at an all-time low across the country and we have a critical shortage of rental accommodation.”

The construction of apartments could also boost the economy, the report says, noting that the decline in new home starts across Canada since 2007 has resulted in 50,000 fewer construction jobs.

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