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- Why does the Department of National Defence (DND) provide housing to Canadian Forces (CF) members?
- How does the Canadian Forces Housing Agency (CFHA) ensure that the rents it collects from CF personnel are fair?
- Why can’t you freeze rents?
- Why do I see increases in my rent when I am told that there is no change to the appraised value of my unit?
- I am a sergeant and my neighbour is a captain; she pays less rent than I do. Why?
- As a current occupant of a DND housing unit, when will I find out about my rent for this year?
- I am posted this year. What will happen if I move into a DND housing unit at my new base?
- Why do I have to pay market rent when I don’t rent on the market?
- What happens if I decide I do not want to pay the new rent charge?
- What should I do if I want to move out of my DND housing unit and rent or buy on the private market?
- Does the Treasury Board directive that rents cannot be more than 25 per cent of gross family income apply to CF members?
- How are market rents established?
- How does CMHC appraise the DND housing units? What is their methodology?
- Can I see the rental information CMHC used to appraise the DND housing units and the address of the house that my housing unit was appraised against?
Why does the Department of National Defence (DND) provide housing to Canadian Forces (CF) members?
The Government provides housing to its employees in certain locations where the private market cannot provide, to ensure they have suitable accommodation wherever they are posted. Where the Government has agreed to provide housing, it establishes a rent that is in keeping with what other Canadians in the local market must pay. This policy ensures fair treatment for all employees of the Government of Canada, and it creates a level playing field where individuals are free to choose Crown-owned or private accommodation. DND applies this policy to CF members.
How does the Canadian Forces Housing Agency (CFHA) ensure that the rents it collects from CF personnel are fair?
As is the case with all Crown-controlled housing, DND housing is appraised by the Canada Mortgage and Housing Corporation (CMHC). The CMHC appraisal process compares DND housing units to similar units in the private market. The appraisal is based on a number of factors, such as type, size, age, access to amenities, and general condition of the units. Rents charged for DND housing units vary because of these factors, and they reflect the rents that would be charged for comparable dwellings in the local market.
Because it would not be fair to the more than 80 per cent of CF members who have chosen to live in accommodations in the private market. Rent is not part of a CF member’s compensation package and is not a benefit. Treasury Board and DND accommodation policies are in place to ensure that the rents charged for Crown housing are fair, and that all government employees are treated equitably.
Why do I see increases in my rent when I am told that there is no change to the appraised value of my unit?
If you are not yet paying market rent, your rent is being phased up progressively until it reaches the market value, however rent increases are limited to $100 per month ($1,200 per year). In 2006, only 2 per cent of occupants saw their rents raised by $100 per month.
I am a sergeant and my neighbour is a captain; she pays less rent than I do. Why?
Rent is not based on the rank of the occupant or the size of the family; it is based only on the CMHC market assessment of the housing unit. In some instances, if your neighbour has been in her DND housing unit longer, it is quite possible that your rent will be higher. This is because your neighbour may not yet be paying market rent. In areas where there have been increases in the overall rental market, newer occupants of DND housing will likely pay a rent closer to the most recent market appraisal. Occupants who have remained in their same unit may still be phasing up to the appraised market value.
As a current occupant of a DND housing unit, when will I find out about my rent for this year?
Rents are adjusted annually, and occupants are given three months’ notice of any changes. By 1 August of each year, CFHA Housing Managers advise all occupants, in writing, of their rent for the upcoming year. These rents are effective 1 November.
I am posted this year. What will happen if I move into a DND housing unit at my new base?
You will pay fair market rent for your DND housing unit. The fair market value that is applicable on 1 November 2006 is the one determined during the 2005 assessment by CMHC. In subsequent years, you will experience annual rent increases or decreases that reflect the changes in local market rents for units comparable to yours. You will also benefit from any existing provincial rent control legislation, and from the Treasury Board directive that protects you from paying rent that exceeds 25 per cent of the gross income of your household.
Why do I have to pay market rent when I don’t rent on the market?
Government policy states that rents for all Crown-owned housing must reflect market rates in the local economy. The aim of this policy is to respect the principle of fairness for all personnel, regardless of where they choose to live. CFHA does this by ensuring that the 16 per cent of military personnel living in CF housing do not receive a benefit that is not available to their colleagues living on the private market.
What happens if I decide I do not want to pay the new rent charge?
The DND Accommodation Policy states that, "DND will pursue policies, plans and programs which encourage CF members to secure accommodation in the private sector marketplace in order to maximize freedom of choice." What this means is that CF families are free to live in DND housing and accept all applicable terms and conditions, or to seek accommodation on the local private market. Some 84 per cent of military families currently choose to live on the private market.
What should I do if I want to move out of my DND housing unit and rent or buy on the private market?
If you decide to buy or rent on the private market, you are required to give 30 days’ notice to vacate the DND housing unit you currently occupy (in accordance with CFAO 28-3). You should also advise your local Administrative Unit and schedule a review to determine if you are eligible for other benefits.
Does the Treasury Board directive that rents cannot be more than 25 per cent of gross family income apply to CF members?
Yes, this rule applies and exists in CF regulations and orders (QR&Os;). Monthly rents (not including utilities and off-property garage charges) cannot exceed 25 per cent of an occupant’s monthly gross family income. Occupants who believe their rents might exceed this 25 per cent threshold are encouraged to contact their local Housing Management Office at any time. Occupants who apply to have their charges reduced under this rule will have to disclose all sources of household income so that the necessary calculations can be made. If required, adjustments are then applied immediately and reviewed annually as long as they are in effect.
How are market rents established?
Every year, at every site, the CFHA local Housing Management Offices identify DND housing units that CMHC will use for evaluation purposes. Professionals from the Canada Mortgage and Housing Corporation (CMHC) then appraise these sample units, called “benchmarks.” Benchmarks are appraised by comparing them against similar units that are available for rent on the local private market and that have similar characteristics (size, layout, number of bedrooms and bathrooms, age, condition, access to services, etc.). In order to further ensure that the process is fair, the Base or Wing Commander is consulted in the selection and appraisal of the benchmarks. Once the benchmarks have been appraised, CFHA uses these as a starting figure to determine the rent for every single DND housing unit.
How does CMHC appraise the DND housing units? What is their methodology?
CMHC appraisers start by researching the local real estate market to collect data. This data includes the availability of rental properties, turnover and vacancy rates, the supply of rental properties, terms and conditions of leases, and any other factor that may influence the market in a particular community. Data is obtained from numerous sources, including property managers, newspapers, owners, realtors, developers, rental magazines, data services, fee appraisers and municipal offices.
Appraisers then use the comparative approach, a widely used method that provides a reliable indicator of market rent. Once the CMHC appraisers have gathered all the necessary data, they compare specific DND housing units with similar properties on the local market. They will examine a number of characteristics, such as location, size, number of bedrooms and bathrooms, age, parking, basement, overall condition, etc. All these characteristics are evaluated one by one, and a percentage value is established to account for any difference between the DND housing unit and the comparable property on the local market. The final step in the appraisal process consists of taking the results of the comparison and reconciling them in a single rent figure.
Every year, CFHA sends an information package to its Housing Managers and to Base and Wing Commanders, providing them with a summary of the appraisal process for their location.
Can I see the rental information CMHC used to appraise the DND housing units and the address of the house that my housing unit was appraised against?
Your local Housing Management Office can provide you with the analytical basis for CMHC appraisals, the methodology that was used in the appraisal process and information on the local market. However, we cannot release specifics such as the addresses of houses on the local market, because this information is collected on a confidential basis and is protected by the Privacy Act.
CFHA is committed to ensuring the integrity and transparency of the rent-setting process. You are encouraged to call or visit your local Housing Management Office with any other questions you may have.
