SAINT JOHN TENANTS NERVOUS ABOUT HISTORICAL REAL ESTATE DEAL
A major real estate transaction in uptown Saint John has many tenants concerned.
Hazen Property Investments has sold 20 of its buildings to Historica Developments.
They include the McArthur on Germain Street and another 12-unit building on the west side to name just a couple.
“My gut feeling was anxiety — stress,” said Jeff Arbeau, who has been renting from Hazen for years.
Hazen is known for good-quality units at reasonable prices.
Historica is known for fixing up older buildings and turning them into luxury units.
We kind of realize there’s probably too many high-end expensive units that most people, we understand, can’t afford.
Their prices “far exceed” Arbeau’s price range.
Historica rents typically range from $1,200 to $2,000 a month, while Hazen’s are $400 to $700.
“It would have a massive impact ability on my ability to live,” said Arbeau.
Many of his neighbours are also worried.
The information package they received from the new owner asked for debit pre-authorizations for rent payments and promised continued “exceptional” service but didn’t make any assurances about future rental fees.
“They don’t have to worry about it,” said Keith Brideau, president and founder of Historica.
Brideau said his company is not planning to increase rents for any current tenants or to change fees for parking, heat or lights.
That’s because he won’t have to recoup investments for any major upgrades.
“They’ve done an excellent job of taking care of their properties,” said Brideau. “Some of them are real gems.”
As tenants move out, he said, units will get things like fresh paint, refinished floors, and new countertops.
Future tenants, might be charged $50 to $150 a month more than the current rates.
“We definitely aren’t going to be pricing people out of the market,” said Brideau.
Historica is looking to expand into the “middle market,” he said, where rents range from $500 to $1,000 a month.
“We kind of realize there’s probably too many high-end expensive units that most people, we understand, can’t afford.”
Arbeau said another concern of his is about losing the “mom and pop” service he had from Hazen.
“You can contact them with a need, and they’ll get to you right away,” he said. “They know your name. They help you any way they can.”
Brideau said his company is aiming to match or improve the level of service.
“I’ve spent many a Christmas Day in a furnace room trying to get a furnace going with my dad,” said John Hazen, general manager of Hazen Property Investments.
Hazen’s grandfather bought the company’s first building 100 years ago.
Hazen said he had a heavy heart about the sale, but it was a good business opportunity and the right choice for his family.
Hazen had 13 employees. That’s being reduced to about seven.
Some of the people losing their jobs were close to retirement, he said, and all are receiving severance packages based on their years of service.
Hazen still has 270 units, including Regency Towers on the east side, some on Coldbrook Crescent, and one on the west side.
Municipal leaders have been inundated with messages about the Hazen sell-off.
Their buildings are “little micro-communities,” said Coun. Donna Reardon, who represents Ward 3, which includes the uptown and central peninsula.
“Those neighbours will look after each other,” Reardon said. “People who are in them are there for a long time. … If you’re there seven or eight years, you’re one of the newbies in a lot of Hazen’s buildings.
“So, that is upsetting to think that your neighbours may have to move, or you may have to move out.”
Everyone’s “major concern,” she said, “is that rent will go up extraordinarily.”
There aren’t any rent control mechanisms available to the city, but Reardon said she expects the market will control itself to some degree.
“He can skyrocket the rents, I suppose,” said Reardon, “but what will the market bear in Saint John?”
Reardon said she’d be interested in exploring best practices across the country on rent controls, but she is reluctant to do anything that would stifle development and growth.
Some are worried that Historica may own too big a share of the local housing market and that this will give it monopoly-like power over prices and availability of apartments.
Historica now owns nearly 40 buildings containing a total of about 400 units.
Brideau estimated that represents five per cent or less of the rental market.
Julia Woodhall Melnik’s big concern is potential gentrification — the displacement of people who live uptown because it’s affordable.
“Where are they displaced into?” asked the assistant professor and director of the laboratory for housing and mental health at UNB Saint John.
The north end is one possibility, said Woodhall Melnik, but deficiencies in the public transit system would make it difficult for vulnerable populations to get to uptown services.
Saint John promotes itself as having relatively low housing prices when it comes to buying, she noted, but limited rental stock means rents are less affordable.
Woodhall-Melnik is hoping developers and landlords will take advantage of government funding available for rent subsidies and affordable housing developments.
Brideau agreed affordable housing is a big issue and said he “would like to be part of that solution.”
He said Historica might announce something on that front within the next year.
Brideau said more construction is happening now in Saint John than he’s seen in the last 20 years. He noted one non-profit building is going up now on Wellington Row.
Reardon said affordable housing is “on everybody’s radar.”
She noted there are still many vacant lots in peninsula neighbourhoods.
Story by: CBC