CANADA – QUEBEC Trends and Developments Contributed by: Eleonora Eusepi, Alain Castonguay, Joseph Piazza and Alessia Talarico, BCF LLP
parties to challenge anti-competitive conduct and the potential for serious penalties, com - mercial real estate players must now navigate a more regulated and litigation-prone environ - ment. Ultimately, these reforms aim to foster a more dynamic, fair and accessible market – but they also introduce legal uncertainty and new compliance risks that industry stakeholders can - not afford to ignore. Housing crisis The housing crisis reached a historic peak in 2024, with the vacancy rate falling below 3% in all municipalities across Quebec – the lowest in the province’s history, as reported by the Front d’action populaire en réaménagement urbain (FRAPRU). This shortage has intensified com - petition for available units, leading to increased rents and heightened housing insecurity, par - ticularly among low- and moderate-income Canadians. The housing crisis has been a longstanding issue, prompting periodic implementation of various laws and regulations aimed at enhanc - ing housing conditions and addressing the chal - lenges within the sector. For instance, in January 2021, the City of Mon - treal (the “City” ) introduced the by-law for a Diverse Metropolis (the “By-Law” ), aiming to preserve neighbourhood diversity and promote access to adequate housing for all residents. This urban planning regulation conditions the issuance of permits for housing construction on the inclusion of certain types of housing, includ - ing social, affordable and family units. • Social housing is typically owned by non- profit organisations, housing co-operatives, government bodies or paramunicipal corpora - tions. It is intended to serve individuals with
specific housing needs or those from low- to moderate-income households. While most social housing is developed under govern - ment subsidy programmes, it can also be built independently of such funding. • Affordable housing refers to units where the sale price or rent is subject to a long-term affordability commitment – typically at least 20 years. Unlike social housing, it does not need to be owned by a non-profit or co-oper - ative and is not limited to any specific group of residents. These units are commonly built through government programmes but can also be developed privately. • Family housing is defined as a unit with at least five rooms, including three bedrooms, and a total floor area sufficient to accommo - date a family. According to the By-law, the minimum required size is 86 square metres in some areas and 96 square metres in others, depending on the sector in which the housing is located. Developers undertaking new projects are required to enter into agreements with the City to allocate and contribute to the supply of these housing types, either by constructing new units, transferring land or buildings, or providing finan - cial contributions. However, a December 2023 report by the Association des Professionnels de la Construction et de l’Habitation du Québec (APCHQ) indicated that the By-law’s implemen - tation has not achieved its intended objectives. Instead, the increased hoops that developers are obliged to jump through to get projects approved has led to a slowdown in housing projects, con - sequently resulting in making it more challenging for citizens to find social or affordable housing. This unintended consequence was not totally unforeseeable as private developers expressed reluctance to include such housing in their pro -
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