In the wake of Bill 31, which aims to update certain legislative provisions in the area of housing law, the Minister responsible for Housing in Quebec, France-Élaine Duranceau, proposes to prohibit the assignment of leases and refuses to set up a rent register.
However, the assignment of leases is one of the only measures which currently make it possible to preserve a tiny share of affordable housing in the private rental stock, and the rent register is the only measure which would make it possible to avoid abusive increases and to get out of the long-term housing crisis.
More fundamentally, what is shocking in Duranceau’s defense of her project is that, on the one hand, she admits that we are in a situation of housing crisis and that, on the other hand, she speaks of the housing as an asset to be valued:
“That doesn’t make sense. You own it, you take risks, you invest your money in an asset and you don’t even have control of it,” she said recently.
In this statement, the Minister, who, let us remember, is a former real estate broker, clearly reveals her true intentions. For her, housing is first and foremost a financial investment to be valued. The problem with this definition is that it ignores the fact that housing is a human necessity. By treating housing as a financial asset, it dehumanizes the issue. After all, it’s much easier to talk about capitalizing on assets than it is to assume that a family is being taken away from their home.
Does the power to refuse the assignment of lease benefit small landlords?
Small landlords of apartment buildings will see several short-term advantages in being able to refuse an assignment of lease. However, in the long term, across the province, this measure will contribute to the increase in the cost of new properties since higher units translate into higher property values and higher purchase prices. In the long term, the effect of this measure for almost all Quebec households will be to make home ownership ever more out of reach.
Large real estate investment funds
And when properties are out of price for households, other actors acquire them, and it is about these that we must speak!
Ultimately, it is a very specific class of landlords who will benefit from the ban on lease assignments and the absence of a rent register: large real estate investment funds, private investment funds and other fund managers and investment firms. As several Canadian studies have shown, including those of Alan Walks, Martine August and Andrew Crosby, these actors have appropriated a growing part of the rental housing stock over the past ten years. It is to believe that Minister Duranceau is the puppet of these private funds, since the latter speak of housing as an “asset to be valued”.
If you go to the Real Estate News Exchange site, a forum where these major financial players in Canada exchange views, and choose Quebec cities, you will find that they are perceived as ripe for investment.
Does that mean more housing? No.
These funds come here to acquire buildings and make them profitable with as little investment as possible. If we rely on the practices used by large funds such as Timbercreek in Ottawa for the Herongate project, these firms buy buildings, let them deteriorate until their demolition is inevitable, then proceed to evict the tenants and construction of luxury condos. The only winners here are the big players who own thousands of doors.
And if the Minister sees housing in the same way as these investment funds, how can she defend the right of the people of Quebec to housing and access to property, and how does she foresee a way out of the crisis? No, the minister’s plan is not there for the collective good. It aims to prepare the ground for these large companies, and it is the entire population of Quebec who will pay the price.
The rights of tenants and the rights of small owners are not in opposition, they are aligned. When the rights of tenants are well protected, real estate is not an attractive investment for these large funds and access to property at an affordable price is possible. This is why the right to transfer leases and a compulsory register of rents are two essential measures. We won’t get out of the housing crisis anytime soon, but Bill 31 fuels the problem.