Rental housing has been concentrated in a limited number of hands in recent years in Montreal, contributing to the emergence of high rises in central neighborhoods, but also to increased pressure on rents, according to three university researchers.
The latter, who work at McGill University and the University of Waterloo, recently published a study in the Journal of the American Planning Association. The fifteen-page document examines the financialization of rental housing in Montreal, when it is owned by real estate developers who generally collaborate with investment funds to carry out their projects. In Montreal, these include the Fonds immobilier de solidarité FTQ, Claridge and Fiera Capital.
By analyzing land ownership data from the City of Montreal, the Quebec Business Register and private rental market ads posted online on Craigslist and Kijiji, the researchers found that 0.46% of the 129,960 landlords in the metropolis owned nearly 32% of the approximately 566,600 rental units in Montreal in 2020.
“Property in Montreal is very concentrated,” summarized in an interview with Duty University of Waterloo researcher Cloé St-Hilaire, one of the authors of this study.
The top 600 landlords owned an average of 300 rental units, the study shows, with the top of the list having 5,680 to their credit. Among these large landowners, several are financialized, tending to build large towers with a maximum of housing – often small – to maximize their profits.
The financialization of rental housing has been linked to rent increases, displacement, service cuts and landlord intimidation.
Thus, in 2020, only 1.4% of rental buildings were owned by financialized owners, but these totaled 11.7% of all apartments on the Montreal market. The only comparable analysis, carried out in 2020, estimated rental monopolization by this type of owner at 3%, notes the study, which calls on municipalities to better share their land data.
“Municipalities regularly publish information about owners of municipal business licenses, but they tend not to publish information about owners of rental housing. This disparity should not exist,” the researchers write.
Because, they point out, this phenomenon of increasing concentration of rental housing in the hands of a limited number of real estate investors has tangible impacts on tenants, believe the three researchers.
“The financialization of rental housing has been linked to rent increases, displacement, service cuts and landlord intimidation,” the study points out, citing several research studies conducted on the subject between 2018 and 2020. study also recalls that Montreal was historically recognized as a “paradise” for tenants, before the affordability of the metropolitan area’s rental market began to deteriorate from the 2010s, “despite an increase in the construction of rental housing built”.
A situation that could be attributed to the fact that housing owned by financialized owners is generally offered at a rent above the market average. “We see a correlation between financialized landlords and housing stress”, which occurs when a tenant pays more than 30% of his income for housing, notes Ms. St-Hilaire.
The targeted central districts
This study also shows that financialized owners – whose housing is generally offered at above-average rent – are particularly present in the central districts of the metropolis. They thus own 31.8% of the rental housing in the borough of Ville-Marie, as well as 17.9% of these in the Plateau-Mont-Royal.
However, “the more rental properties there are in the rental market, the more stress there is related to the cost of housing” in the sector concerned, recalls Ms. St-Hilaire.