Montreal’s new strategy to keep rent low: get in the ring with real-estate speculators | CTV News
Montreal is taking a new tack in trying to keep housing affordable: competing with investors, then locking in property at low rents.
Verdun and Lachine are home to two of the first examples. A nonprofit called Solides used a $2.1 million grant from the city to buy a building in each neighbourhood and turn them into social housing under a 25-year contract.
There’s urgency to the situation, with a red-hot housing market and rents spiralling upwards, but the nonprofit said that’s not the only reason to work with existing buildings.
“There’s big investors who are taking advantage of the situation right now, with very low interest rates, to increase their position in the market,” said François Giguère of Solides.
“So it was important to take those units, and as many other units as possible, out of the private market, out of the hands of speculators.”
PRESERVING WHAT’S THERE
The city is also trying this model because building low-income housing from scratch is more expensive than taking over existing housing stock, even at speculation-level prices.
“It’s one thing to create new units, but it’s another thing to maintain the affordability in our districts that are already built,” said Verdun city councillor Robert Beaudry.
Tenants who are already living in the buildings, and paying rent below the current market average, say the purchase is good news, whoever ends up living there.
“Especially considering everything that’s going on with the pandemic, the loss of jobs and everything,” said Nat Naeo, one Lachine resident, “I think while it may not 100 per cent apply to my case… for most of the residents, anyway, it would be a huge boost.”
She will, in fact, be able to keep living there as long as she wants—that’s one of the terms of the new program, that current tenants can keep their homes as long as they want.
There are other questions about whether the city-sponsored apartments are going to those most in need of them.
The city has a long list of people who have been waiting for affordable housing, and the new apartments won’t go on that list. Solides has its own list of priority tenants.
Regardless, the city will count these buildings as part of its goal of creating 12,000 affordable units by 2021.
BIGGER SOLUTIONS STILL NEEDED
The Quebec landlords’ association, CORPIQ, said it doesn’t support the city’s new strategy. To create low rent, the group argued, the city should instead hand out housing vouchers—which would then go towards market-level rent.
“The only way to fix the problem is to ensure those tenants, low-income earners, receive enough money to pay what it costs in 2020,” said Hans Brouillette, the spokesperson for CORPIQ.
Housing advocates, meanwhile, have a third take: they say that while they’re in favour of the project, the best way to prevent a more serious rent spiral in places like Verdun and Lachine is to strengthen tenants’ rights so that speculators can’t force them out.
“The big issue, really, is how easy it is to evict tenants and jack up the rents and get away with it,” said Steve Baird of the Citizens’ Action Committee of Verdun.
“Total impunity, which we’re seeing all the time.”
The city told CTV News that it plans to invest in more buildings to add to its portfolio of affordable housing.
In September, it also spent $6.5 million to take over a building in Parc-Extension that was part of a bidding war. It will be turned into 40 units of affordable housing.
This content was originally published here.