Speculation in property values in Montreal is also hitting organizations that manage social and affordable housing, which fear having to increase the rents of some of their tenants if the public authorities do not find a way to reduce their tax burden.
“We cannot function with the taxation system that the City is currently applying. We are all going to die slowly, ”launches the To have to Richard Phaneuf, president of the Yellow Door Housing Corporation, a non-profit organization (NPO). The latter manages a building located in the Milton-Parc district, in the Plateau-Mont-Royal borough, which includes 13 rental units and 8 rooms for low-income customers.
Like many Montreal NPOs, the financial situation of this organization is precarious. The building he manages also requires a lot of work because of its condition, which has deteriorated over the years. However, the property value of this building has continued to climb during the last property assessment rolls of the City, having the effect of increasing the weight of municipal taxes on the expenses of the organization managing these rental units. modest.
Why would tenants have to pay for zoning based on the speculative resale of a building rather than maintaining housing where they can afford to live?
The Corporation d’habitation Porte Jaune turned to the Administrative Tribunal of Quebec last year to try to obtain a downward revision of the property assessment of its building, on the pretext that it could not benefit real estate speculation, such as private owners.
“We are an NPO that is subject to a law that prevents speculation in the sector,” explains Mr. Phaneuf in a long interview.
A private law adopted in 1987 concerning a set of properties in the Milton-Parc district intended for a low-income clientele imposed several restrictions on the resale of these dwellings, which must first be offered to existing co-owners at a price equivalent to that of the mortgage balance. Any buyer must also commit to renting the accommodation acquired as a priority to people with low incomes, thus leaving little room for an acquisition intended to make significant profits on resale.
“We house the poor,” sums up Richard Phaneuf, who fears having to increase the rents of his tenants, if he does not obtain a drop in the land value of his building, which notably hosts a few refugees. It has also taken in homeless people in the past. “We don’t want to increase rents,” insists Mr. Phaneuf.
Faced with a first failure before the TAQ, which upheld the property value of the Corporation d’habitation Porte jaune in a decision rendered last July, the organization turned to the Court of Quebec, which accepted last December to hear his request to appeal the judgment of the administrative tribunal. A hearing is scheduled to take place in this case in January 2024, the To have to the organization’s lawyer, Manuel Johnson.
“I think this action could serve to illustrate the problem, but if we win the case in the Court of Quebec, that will not solve the problem for other NPOs and other housing cooperatives,” notes Me Johnson.
A model to review
Joined by The dutythe general manager of the Fédération des OBNL d’habitation de Montréal, Chantal Desjardins, confirms that many organizations with precarious finances are suffering hard from the increase in the property values of the buildings in which they welcome low-income tenants.
“And as soon as we have higher taxes, we know it, it goes to the tenants”, who receive a substantial increase in their rent, she recalls. Ms. Desjardins is thus campaigning for the establishment of a differentiated tax rate for residential NPOs, compared to owners of conventional residential buildings. “We don’t understand why we would be taxed the same way,” insists Ms. Desjardins, who recalls that housing NPOs have a mandate to ensure the “sustainability” of the social and affordable housing they manage, and not resell them for profit. “It’s public good,” she insists.
“Why would tenants have to pay for zoning based on the speculative resale of a building rather than maintaining housing where they can affordably live? Also questions the director general of the Association of Technical Resource Groups of Quebec (AGRTQ), Éric Cimon, who notes the importance of “maintaining the affordability of projects” for housing intended for “low-income people”.
In writing, the office of the mayoress of Montreal, Valérie Plante, recalled that property assessment falls under the Act respecting municipal taxation, which is managed by Quebec. “However, we remain very sensitive to this reality of organizations,” adds the firm, which believes that “the provincial law should be revised to take into account the real economic rent of organizations in the calculation of the assessment of the building they occupy. rather than the potential rent”.
The Department of Municipal Affairs declined to comment.