A $120-million deal has ensured tenants of a 720-unit apartment complex in eastern Montreal will see their rents protected from excessive annual increases.
This initiative, backed by a housing advocacy group, the city and the province, comes as the various levels of government face increasing pressure to address Montreal’s growing housing crisis.
An organization in the Pointe-aux-Trembles borough that specializes in affordable housing, the Corporation Mainbourg, is acquiring the real estate complex known as Le Domaine La Rousselière, officials announced Friday.
The complex, which houses more than 1,500 people, is located on Sherbrooke Street East at the corner of 52e Avenue.
Benoit Dorais, responsible for housing on Montreal’s executive committee, said this deal means 1,500 units will be off the speculative market and placed under the control of an entity whose sole mission is to manage affordable housing.
That speculative market has helped spur rapidly increasing rental rates in the Montreal region — rates that far exceed affordability as real estate companies look to profit from the housing crunch.
The deal has been firmed up in recent weeks, with a $75-million loan coming from the Caisse d’économie solidaire Desjardins, a co-operative that aims to invest in the social economy by giving non-profit organizations loans.
The Chagnon Foundation, which works to prevent poverty in Quebec, is contributing $5 million. Montreal’s contribution will be $15.8 million and Quebec will inject $20 million. New Market Funds, based in British Columbia, is covering the rest as it continues its effort to invest in long-term, permanent housing affordability.
The $120-million deal includes $10.4 million for renovations.
“A project like this is truly promising because we know that if we want to preserve our affordability in the city, we must build, build, build, but we also need to remove many housing units from the speculative market,” said Dorais.
Mixed housing for affordable rates
Domaine Rousselière, which is inhabited by a range of families and individuals, was already on Montreal’s list of properties under consideration for the city to exercise its right to first refusal.
The right of first refusal is a procedure allowing cities like Montreal the right to match a private purchase offer submitted to the owner.
According to data compiled by Radio-Canada in June, nearly 350 owners have received an official notice from Montreal since last year, indicating that their building or land is subject to the city’s right to match an offer.
A group of Ontario investors owned the Domaine Rousselière complex for many years, with the site’s value assessed at roughly $110 million.
Francine Fortier already lives in the complex and she told Radio-Canada she is delighted to know that her rent will remain affordable for many years.
“Today’s seniors don’t have much income from pension cheques and wouldn’t even be able to afford rents of $1,200, $1,500 per month,” she said.
She has been a tenant with her husband for 45 years, and the couple pays $775 per month for their apartment, including parking and electric. This is an exceptionally low rate for a two-bedroom unit in Montreal.
Rent increased by 16.4 per cent in the past year, with average rent topping $2,000 a month for the first time ever in the city.
On Domaine Rousselière‘s website, three-bedroom units are still advertised at $1,350 per month. On average tenants pay $990 in rent per month.
Dorais said as rental rates increase, affordable units are lost.
Managing complex’s rent increases
The buyer, Corporation Mainbourg, is a non-profit organization that already owns 500 community housing units in eastern Montreal.
General director François Claveau said it took the organization’s solid foundation to instill confidence in investors, and “we needed subsidies and government assistance.”
This complex will still face annual rent increases, as do other apartments in the city, he said. However, these increments will be significantly lower than the substantial hikes endured by residents in units owned by for-profit companies capitalizing on the speculative market, he explained.
In June 2022, Quebec announced a $350-million grant for housing projects to be carried out by the Fonds de solidarité FTQ and Mouvement Desjardins. The commitment was to make nearly 3,000 affordable and social housing units available over a three-year period.
And just this week, the province committed to building 8,000 social and affordable housing units, but the housing minister said projects like this one in Montreal’s east end can speed up the process.
Taking these units off the speculative market and keeping them affordable is “a win-win,” said France-Élaine Duranceau during a news conference Friday.
“We need to do more,” she said, and Montreal Mayor Valérie Plante followed that up by adding, “I absolutely agree.”