RISING RENTS IN MONTREAL THREATEN THE FABRIC OF THE CITY
A blue banner hanging from the Manoir Lafontaine snapped in the wind on a blustery spring day, as if to emphasize its message, loud and clear in either language: “Renoviction.”
The corporate owners of the 12-storey building in Montreal’s Plateau neighbourhood – Hillpark Capital – were ordering residents to move out by the summer for major renovations. But the renters weren’t going quietly. At a lively protest in April, full of jangling tambourines and bullhorn speeches, they claimed they were being “renovicted,” to be replaced by wealthier tenants. (In a statement, Hillpark said the building is in bad shape and needs extensive work and that tenants will have a right to return at a level of rent controlled by provincial law.)
It helped make Manoir Lafontaine a symbol of what some are calling the city’s housing crisis. In a place where only about a third of residents own their homes, that means a crisis of rent.
For decades, Montreal has been an oasis of affordability. A combination of factors, from the language barrier to a weak economy to ample housing stock, made renting in the city a rare North American bargain – small-town prices in one of the continent’s biggest cities. Five years ago, the average cost of a two-bedroom apartment in Montreal was $760 a month, compared with $1,375 in Vancouver.
But a series of trends has started to dismantle Montreal’s bragging rights. Renovictions are halfway between symptom and cause, but the growth of Airbnb, a lack of new building in fashionable neighbourhoods, a provincial economic boom and a global trend toward investing in real estate have all contributed.
Not even a pandemic could stem the tide. The average rent in Greater Montreal increased by 4.2 per cent in 2020, the largest jump in almost 20 years, according to the Canada Mortgage and Housing Corp. The cost of available apartments, meanwhile, was 46 per cent higher than rented ones.
Numbers can only hint at the local angst about what feels like the slow death of a renters’ city. In a place where artists, newcomers and blue-collar workers alike could generally count on living affordably, everyday conversation is increasingly dominated by real estate. Local governments, especially at the city and borough level, are frantically trying to encourage the construction of affordable housing, or slow its removal, with some of the continent’s toughest bylaws.
Montreal is at risk of becoming more like any other Canadian city, argues Véronique Laflamme, spokesperson for the tenants’ rights group FRAPRU.
“There’s a panic among people who say, ‘I can’t afford a $1,500 rent,’ ” she says. “We’re getting dangerously close to Toronto and Vancouver.”
The housing market finally might seem to be turning on Montreal, but the primal forces of supply and demand have done their part to keep the city’s rents affordable. Large swaths of Montreal were built in the early 20th century, before the era of mass home ownership and suburban flight, guaranteeing a permanent stock of apartments near the city centre. (Picture the kind of triplex whose outdoor staircases are a visual emblem of the city.) As a result, the greater Montreal area contains more than 600,000 purpose-built rental apartments, compared with slightly more than 100,000 in the Vancouver area – a bounty that has helped control costs.
The relative antiquity of Montreal apartments is also a reflection of its bygone heyday, another factor holding down rents. For decades, the city’s population has stagnated relative to its Canadian neighbours. In 1981, the Montreal and Toronto metro areas were roughly the same size, with populations of about three million. Since then, Toronto has added nearly two million more people than Montreal has. Slower growth in la métropole has meant less competition for housing.
But market forces alone can’t explain the charmed existence of Montreal renters. They have also fought to keep their city affordable, pressuring the provincial government to institute some of the country’s toughest rent controls – a generally tenant-friendly tribunal, the Régie du logement, was established in 1980 – or else simply taking matters into their own hands.
Sometimes the city’s renters have seized whole neighbourhoods. In the late 1960s, a group of developers planned to tear down most of the Milton-Parc area, a patch of shabby-genteel stone apartments near McGill University, and build a modern complex of luxury high-rises, offices and shopping facilities known as La Cité. When residents rebelled, they managed to not only stop most of the development, but establish a land trust that created communal ownership of the land and buildings. Dimitrios Roussopoulos, an old lion of the left who described himself as the “general strategist” of the effort, is one of about 1,500 people who now lives in the community’s 16 co-ops and six non-profit housing associations. He shares a four-bedroom, two-storey apartment that costs $800 a month.
“Within the six-block area, the real estate industry has no place,” he says. “We’ve taken it off the market.”
Outside of the Milton-Parc bubble, the market is currently doing strange things to Montreal rents. By many indications, they should be falling, not rising. The pandemic kept thousands of immigrants and international students away from the city last year, while the Montreal census area added more new rental units – 10,600 – than it has in 30 years. The supply-and-demand factors are all trending in favour of tenants.
Instead, renting in the city is more expensive than ever: Available apartments were going for an average of about $1,300 last year, compared with less than $900 for ones that were occupied. That suggests rents could shoot up faster when the normal pace of new arrivals returns.
One factor seems to be a piece of otherwise good news: Quebec’s vibrant economy. After decades of anemic economic growth – between 1981 and 2006, the province’s real GDP grew 77 per cent, compared with 110 per cent in the rest of Canada – Quebec is experiencing a prolonged boom. Its jobless rate fell below the national average in September, 2016, and has mostly hovered under that threshold since. A tech explosion has seen Montreal become a global hub for video games and artificial intelligence. Royal Bank of Canada expects economic growth of more than 6 per cent in Quebec this year, the best in the country.
Montreal is now attracting a growing number of big-fish property investors, says David Wachsmuth, a professor at McGill’s School of Urban Planning. Exact numbers are hard to come by, but he estimates thousands of units have been bought up in recent years by real estate investment trusts, or REITs, which take a systematic approach to squeezing the maximum legal revenues out of their buildings.
Another nagging problem for renters is the rise of Airbnb, which has taken a chunk of housing supply permanently off the market. As many as 10,000 short-term rentals cater to tourists during the summer festival season, Prof. Wachsmuth says – and the platform’s effect is most acute in trendy neighbourhoods where competition for apartments is already heated.
The dwindling number of small buildings with small-time landlords – the bread and butter of Montreal housing – is not being replaced fast enough, either. Housing construction is increasingly concentrated in single-family suburban homes or high-rise condo towers downtown, rather than low-rise walkups in the city’s traditional residential neighbourhoods, Prof. Wachsmuth says. (Montreal still builds fewer single-family homes than Toronto, he says, but the gap is shrinking.) That pattern reminds him of another overheated Canadian market, and not in a good way. “Toronto is not a housing model for us to be emulating,” he says. “So that’s pretty worrying.”
It would be impossible to mistake Mile End for anywhere but Montreal. The neighbourhood is all spiral staircases, cyclists and bilingual crosstalk; the yeasty smell of St- Viateur bagels floats on the air.
It doesn’t look like a battleground against aggressive real estate capitalism, nor does Sean Michaels look like much of a field marshal. The Giller Prize-winning novelist wore a cheeky “À louer” (For Rent) pin on his overcoat on a recent spring afternoon and a baseball cap whose magic-wand-and-sickle logo seemed to capture his slightly whimsical brand of leftism.
Casualties were everywhere, though, as he toured the streets he’s seeking to preserve as a member of the activist group Mile End Ensemble. There was graffiti on the wall of the high-end fashion boutique that read, “There was $4 sandwiches here.” A former bakery nearby was shuttered not because of the Mafia extortion that stings some Montreal businesses, but because of a rent increase.
“He survived the mob shakedowns, but not the landlords,” Mr. Michaels says.
Higher rents are making life difficult for small businesses that give neighbourhoods their character, he argues. Local landlords have made it common practice to buy retail space, price the current tenant out and then hold on to the property until a richer business can take its place. That’s how Mile End got its Lululemon, but also how it ended up pockmarked with vacant storefronts, Mr. Michaels says.
Among the casualties along Saint-Viateur St., however, is a notable survivor. After a public-pressure campaign led by Mile End Ensemble, the Montreal real estate company Shiller Lavy abandoned a reported 150-per-cent rent increase on the bookstore S.W. Welch in March, allowing the neighbourhood stalwart to stay open.
The victory energized anti-gentrification campaigners, who have promised to keep up the fight. But Mr. Michaels acknowledges pitched battles against landlords to save individual businesses is not a sustainable solution.
“Shame did seem to work with Welch, but I was surprised by that,” he says.
More government intervention in the rental market is the key to keeping the Shiller Lavys of the world at bay, Mr. Michaels believes, and with a municipal election in November, followed by a provincial contest next year, Mile End Ensemble is calling for a range of tougher policies from all levels of government, including a commercial vacancy tax and better protections against renoviction.
Premier François Legault has been ridiculed in recent months for being out of touch with the plight of Quebec renters. In April, he said he guessed an average rent in the province was $500 or $600 (for student housing with roommates, he later clarified), which opposition parties pounced on. His government has also been attacked for refusing to call the current situation a “housing crisis.”
The province hasn’t been completely idle, however. The Legault government committed to building 6,000 affordable housing units in the province during its first mandate, while the Ministry of Housing and Municipal Affairs has signalled its intention to raise the burden of proof for landlords who claim they are evicting tenants for the sake of a renovation. (Currently, they often perform minor cosmetic work before hiking the rent on the next tenant, advocates say.)
In Montreal’s highly decentralized system of governance, some boroughs, such as the rapidly gentrifying Villeray-Saint-Michel-Parc-
The city’s left-leaning mayor, Valérie Plante, meanwhile, has moved aggressively to build affordable housing with a series of unorthodox policy tools. Since 2018, the city has had the right of first refusal on certain lands for the purpose of building public works, and last year it identified more than 300 lots that it would consider buying to erect public housing if they came up for sale.
The city’s so-called 20-20-20 bylaw, which came into effect on April 1, will also require developers to include up to 20 per cent each of social, family and affordable housing when they build new projects of more than about five units in certain parts of the city (social meaning government-subsidized, family meaning of a certain size and affordable meaning below market value). The mayor’s administration has called it probably the most powerful such bylaw in North America.
Ms. Plante’s opponent in the mayoral race, Denis Coderre, has his own provocative ideas for easing the city’s rental crunch. He has floated the possibility of allowing towers to be taller than Mount Royal, which is currently forbidden. (Phyllis Lambert, the noted architect and preservationist, told the Montreal Gazette the notion went against the city’s “DNA.”)
Despite this flurry of proposals, many of Montreal’s activists fear local politicians aren’t acting fast enough. Véronique Laflamme, of FRAPRU, called on governments to build 50,000 affordable apartments in the next five years – far more than currently envisioned.
“The logic of profitability is overcoming the basic needs of a large share of the population,” she says. “For us, the solution is ambitious investments in public housing.”
In the meantime, Montreal renters are, as usual, fending for themselves in creative ways. Tenants are increasingly using Facebook to pass on their leases as a way of thwarting big rent hikes. Mutual aid societies have sprung up in some neighbourhoods to help keep local renters informed about their rights. There’s also a growing “solidarity” between anglophone and francophone activist groups such as Mile End Ensemble and FRAPRU, Ms. Laflamme says.
The fate of Manoir Lafontaine, however, suggests activism might not be enough to stop Montreal’s slide toward higher rent. At the protest in April, a tenant named Renée Thifault spoke to dozens of supporters over a bullhorn about the “predators” of Hillpark Capital, who didn’t think residents like her were “human.”
“When we’re attacked, we have two choices – to flee or to defend yourself,” she said. “I chose to defend myself.”
A week later, she received her eviction notice.
Story by: The Globe and Mail