RioCan CEO Edward Sonshine says rental housing is the future
RioCan recently abandoned its unpopular years-long effort to install a Walmart on Kensington Market’s western border, but now Edward Sonshine, CEO of the real-estate development firm, is back with an idea that seems more likely to win support among downtown dwellers: purpose-built rental housing, and lots of it.
In an interview with Bloomberg News, Sonshine, who now jokingly refers to himself as “the Darth Vader of Kensington,” says that his company is angling to capture a market that other Toronto developers have all but ignored in recent years: renters.
“Long term, you can never go wrong owning rental residential in good areas of a good city,” he told Bloomberg. “No one is interested in one-off profits. The value will be better by keeping that rental residential real estate.” Sonshine says RioCan aims to build 3,000 to 4,000 rental units over the next five years, though it’s not clear how many of those will be in Toronto. It’s expected that many of the new apartments will be built over the company’s big-box retail spaces.
Sonshine makes the whole plan seem very reasonable, but the fact is that what he’s proposing is unusual. The vast majority of Toronto’s new residential construction consists of condos. Those condos sometimes wind up on the rental market when their owners rent them out, but it’s uncommon, these days, for a development company to get directly into the landlording business. Contrary to what Sonshine says, most major players in Toronto’s housing market do seem to be interested in one-off profits. Meanwhile, the city’s rental vacancy rate remains ominously low, and average annual rent increases continue to outpace inflation. If help has to come from Darth Vader, then so be it.