Why are private developers building social housing?
Three major private real estate developers are involved in building social housing in Montreal. This item asks why and arrives at some interesting answers: they’ve glutted the market but need to keep their teams working, they find the presence of the homeless is bad for business, and it may be a way to get hold of public funds, Quebec having basically given up on participating in providing housing at all.
Tax breaks for the developers, and how they may be using these projects to offset the requirement for affordable and social housing in other projects, are not mentioned.
Ephraim 09:38 on 2026-01-04 Permalink
And yet, when I suggest that we use REITs to add affordable housing, by subsidizing rent and having their professional teams handle maintenance, everyone thinks I’m nuts. Meanwhile, we can see that the city’s SHDM has allowed buildings to run into disrepair. Instead a REIT has an interest in maintaining the apartments because they have profit driven clients and stockholders to appease.
No, it’s not a perfect solution. But neither is expecting a city to run housing, when it’s not their expertise.
SMD 13:45 on 2026-01-04 Permalink
I hadn’t heard that the SHDM buildings are in disrepair. I’ve been in at least a dozen and they all seem well-run. Perhaps you’re thinking of the OMHM, which indeed has had multiple maintenance issues (in part due to mismanagement and past cuts to federal maintenance funding programs).
Joey 15:36 on 2026-01-04 Permalink
The issue of the state’s diminished capacity, despite its increasing size, is IMO the public administration challenge of our era (obviously excluding whatever nonsense Trump has in store for us). Since Francois Legault came to power, after a campaign in which he promised to reduce the size of the Quebec public sector by 5,000 positions, the number of public employees has grown by 113,000, or 23% (according to Quebec news reports form last year referring to public Treasury Board documents) – compared to just an 8% increase in the population. And yet I don’t think you could find a single Quebecer who would agree that the quality of our public service administration has improved in a meaningful way.
The implication here is that the alternative to the private sector taking the lead here is the public sector providing an equivalent increase in social housing units; I think that’s wrong – I think the alternative is more of the same, i.e., nothing. It’s tragic that the only path forward on a housing crisis that has negative effects on all aspects of public life in Quebec seems to require private sector leadership. Having to choose between rent-seeking capitalism bound only by the ‘good faith’ of real estate developers or mega-projects run by a government that cannot do anything on time, on budget and without an inevitable corruption commission is no choice at all.
thomas 15:56 on 2026-01-04 Permalink
@SMD doesn’t that prove the point? SHDM is run by a non-profit corporation while the OMHM is municipal body.
Ephraim 23:24 on 2026-01-04 Permalink
There are provinces which simply subsidize the rent, rather than get into the business of building and running housing. And I’m not suggesting whole buildings, I’m suggesting that they are in mixed buildings. Which has proven to also has proven to uplift those in the social housing, rather than create a “ghetto”
SMD 10:51 on 2026-01-05 Permalink
@Ephraim “We find no significant effect [on economic wellbeing] for in-cash assistance with the various provincial and territorial housing allowance programs offered.” Rental housing types and economic wellbeing in Canada (Housing Studies, 40(9), 2024). Rent subsidies are really landlord subsidies, and often just have the effect of raising overall rents (which in turn hurts un-subsidized renters). In fact, in at least one province the fed’s new Canada Housing Benefit actually left renters worse off: https://doi.org/10.1080/02673037.2024.2307595.
@thomas There are many different models of non-profit housing, each with its pros and cons. Everything is perfectible. However, the key element to actually improve tenants’ material conditions is that it not be tethered to the speculative housing market, in other words, that it be run for the public good and not profit. The experts quoted in the CTV and Le Devoir articles worry that these private promoters will siphon public resources but continue to generate private profits: