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Foreign home buyer ban slowing rental apartment construction

Canada’s ban on foreign purchases of residential property is creating barriers to construction of new rental housing, another unintended consequence stemming from a law that was supposed to help Canadians buy more homes by barring foreign competition.

The ban, which is set to last for two years, has already led to the cancellation of hundreds of commercial property deals because the law’s definition of residential property includes land that is zoned for residential or mixed use. As well, the rules specify that no more than three per cent of any money going to a residential purchase can come from a foreign source.

Colonia Treuhand Ltd. Group has plans to build about 1,000 rental-only apartment units across three sites in downtown Toronto. The land was bought about 15 years ago, with some construction financing from coming from European clients.But since the law went into effect Jan. 1, the project has been in limbo.

(Globe and Mail)