Land speculation in Montreal also hurts organizations that manage social and affordable housing. The latter fear that they will have 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. The latter manages a building located in the Milton-Parc district, in the Plateau-Mont-Royal borough, which has 8 rooms and 13 rental units for low-income customers.
The financial situation of the Montreal NPO is precarious, as it is for many others. 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 the building has continued to climb over the assessment rolls, increasing the weight of municipal taxes on the organization’s budget.
Why would tenants have[-ils] to pay for zoning based on the speculative resale of a building rather than maintaining housing where they can live affordably?
The Porte Jaune Housing Corporation thus turned last year to the Administrative Tribunal of Québec (TAQ) to try to obtain a downward revision of the property assessment of its building, on the pretext that it cannot benefit from real estate speculation, unlike private owners.
“We are an NPO, which is subject to a law that prevents speculation in the sector,” explains Mr. Phaneuf in a long interview.
A private law adopted in 1987, which concerns a group of properties in the Milton-Parc district intended for low-income customers, has in fact imposed several restrictions on the resale of these dwellings. They 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 rent of his tenants if he does not obtain a drop in the property value of the building, which notably accommodates a few refugees. It has also taken in homeless people in the past. “We don’t want to increase the rents,” he insists.
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 appeal request. 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 appeal could serve to illustrate the problem, but [même] if we win the case in the Court of Quebec, that will not solve the problem for the other NPOs and other housing cooperatives,” notes Ms.e Johnson.
A model to review
Joined by The duty, the 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 house 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.
Mme Desjardins is thus campaigning for the implementation of a differentiated tax rate for residential NPOs. “We do not understand why we would be taxed in the same way” as the owners of conventional residential buildings, she laments. Especially since housing NPOs have a mandate to ensure the “sustainability” of the social and affordable housing they manage, and not to resell them to make a profit: “it’s public good”, insists she.
“Why would tenants have[-ils] to pay for zoning based on the speculative resale of a building rather than maintaining housing where they can live affordably? 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 Quebec Ministry of Municipal Affairs declined to comment on the case.