At the end of a municipal electoral campaign where the thorny issue of access to property has occupied a predominant place, researchers lift the veil on the growing role played by investment funds in the construction of luxury residential towers. in Montreal’s Sud-Ouest and Ville-Marie boroughs, where families suffer from accelerated gentrification.
Three researchers, members of the Habitat Research and Action Collective, have carried out real monkish work in recent years, by analyzing all the building permits issued by the boroughs of Ville-Marie. and Southwest between 2000 and 2015, in two successive studies, the most recent of which was published last month in the journal Sociographic research.
The experts, who come from the Université de Montréal (UdeM), the Université du Québec à Montréal (UQAM) and the Collège de Maisonneuve, hoped to obtain these data for all of the 19 boroughs of the metropolis. The red tape imposed by some of them, who in some cases demanded several thousand dollars to give them access to this data, has however forced them to lower their expectations. The researchers’ final findings, drawn on the other hand from interviews with several real estate developers, are not to say the least eloquent.
A quasi-monopoly
In their most recent study, entitled “The action of real estate developers in the gentrification process of southwest Montreal”, the three researchers report 200 residential projects proposed by more than a hundred developers who have obtained building permit from the borough council during the period analyzed.
However, only five developers are responsible for more than 40% of the 9,489 units built between 2000 and 2015. These real estate giants include Devimco, Prével and Mondev, present both in Ville-Marie and in the South-West.
“We have a few major promoters who have the power to transform the city,” illustrates Gabriel Fauveaud, assistant professor in the Department of Geography at the University of Montreal and co-author of this study.
The role of investors
The large real estate projects carried out in Montreal are also increasingly supported by investment funds, whose presence would have accelerated the construction of units in the metropolis from 2010. At the top, in the targeted boroughs, we find the Fonds immobilier de solidarité FTQ, which has financed the construction of thousands of units in recent years, followed by Cadillac Fairview and Fiera Capital.
These financial players, who are betting on large-scale real estate projects, also help to create a certain homogeneity in the housing units built in the heart of Montreal, the researchers analyze.
“By demanding high returns, investment funds promote the construction of condominiums, since it is the type of housing generating the most profits”, underline the researchers in their study on the Sud-Ouest borough. .
Thus, nearly 90% of all new residential construction during the period analyzed consists of condominium housing, to the detriment in particular of rental housing. However, these units, which attract many young adults and wealthy retirees, rarely meet the needs of families, especially because of their small size.
“It is certain that in a micro-condo of 400 square feet, it is difficult to have three children,” drops Professor Louis Gaudreau, from the School of Social Work at UQAM. The Griffintown district, in the South-West, still does not have an elementary school, despite the real estate boom it has been facing for several years.
Accelerated gentrification
The proliferation of condominium housing towers has also accelerated the gentrification of the Sud-Ouest borough. The share of residents working in labor and construction trades has thus increased from 20% to 10% between 2001 and 2016, in favor of employees working in sectors that are often better paid, among others in the health sector and that of finance. In the district of Little Burgundy, income increased by 143% between 2001 and 2016, in constant dollars, experts say.
Louis Gaudreau thus notes that real estate giants have made gentrification of the South West and other sectors of Montreal their “business model” in recent years, by betting on large real estate projects that include a variety of Services.
It is ironic to hear these developers say that they are the solution to the housing crisis and the exodus of families to the suburbs, when I think they are largely responsible for it.
“There is an urban development project that goes much further than the simple fact of building housing for those who need it most”, adds the expert on housing files, who notes that the ways of doing things large promoters also influence those of the smallest, who are more and more numerous to imitate them.
“The question of the high-rise condo, smaller and smaller spaces, precisely because all this makes it possible to make the investment profitable, with an interesting visual invoice, it is the big developers who have created that. But now, we find that in small and medium-sized projects, ”illustrates Mr. Gaudreau.
Thus, “when we build, it becomes more and more difficult to do something other than that, whereas it would be something else that we might need more”, he adds, with particular reference to the lack of large-scale housing in the metropolis.
A matter of regulation
In this context, “it is ironic to hear these developers say that they are the solution to the housing crisis and the exodus of families to the suburbs, when I think they are largely responsible for it” , drops Mr. Gaudreau, in particular with reference to the many criticisms that have been formulated by them against the By-law for a mixed metropolis of the City.
The expert also believes that the demands for profitability on the part of investment funds with regard to the real estate projects they finance partly explain “the fierce opposition of the real estate industry to everything that relates to inclusion of social and affordable housing ”. Faced with the “failure” of the City’s latest inclusion policies in terms of social and affordable housing, Gabriel Fauveaud thus evokes the importance, according to him, of regulating not only the real estate sector, but also the financial sector that supports it. , as several cities in Europe have done.
“We can only note the fact that Montreal is quite a few years behind in understanding these issues,” he concludes.