image Credit: 500Photos.com New government efforts to curb a housing crash and to increase housing affordability could benefit local retailers and their landlords. New Mortgage Rules New lending regulations not only dictate minimum down payment requirements on home mortgages, but qualifying rates as well. Even though some Canadian mortgage lenders may be advertising interest rates in the 2% range, authorities require those borrowers to qualify at the higher Bank of Canada posted rate for 5-year fixed rate loans, which is currently hovering around 5 percent. Under these new mortgage rules, the typical homeowner would have an additional surplus of almost $700 per month, based on the average home value of $551,400. The increase in disposable income is likely to strengthen consumer confidence, resulting in increased spending at local shopping plazas. Affordable Housing Initiatives The CIBC deputy chief economist, Benjamin Tal has recently posed that government intervention is necessary to avoid a worsening affordability crisis in major Canadian cities. Rents have been increasing faster than home prices, and master-planned affordable housing projects are being viewed by some as essential for offering some relief to residents. Although Canada may have the space to build, so far affordable housing projects haven't worked very well south of the border in the US. It's worth noting that San Francisco, California's average rents are around 30% higher than the Greater Toronto area and those rates are now down $300 to $600 per month over the last couple of years. Data from Zillow suggests the San Francisco housing market is already peaking, as almost 5% of sellers are cutting their asking prices and at least one tech firm has announced it is paying workers $10,000 to re-locate out of the city. Expanding Retail In contrast to the United States, Canadian retailers have been unfazed by online shopping trends. Some Canadian retailers have already been expanding their floor space with Freshii's planning to triple its number of locations, after reporting rising sales figures. Even more notable is the fact that Amazon is increasingly going offline. In its latest venture the giant retailer has begun to move its digital grocery shopping business to physical stores and more local distribution centers. Amazon now has grocery kiosks, hybrid supermarkets, Amazon Go stores and has documented plans to open as many as 2,000 stores. Summary If Amazon can't survive without local stores, that bodes extremely well for the retail business and shopping plaza investors. Consumer spending and retail profits could also be boosted by a combination of access to more affordable housing, as well as maintain a forced surplus of disposable cash each month. These trends are signaling that now may be a great time to diversify into retail commercial real estate as a means to generate consistent income in the years ahead.