Tenants of the Crescent Town complex in Toronto are asking for 50 per cent rent relief, all eviction applications withdrawn, and fair repayment plans that don’t put tenants at risk of eviction due to COVID-19, Noaman Ali writes.
Tenants of the Crescent Town complex in Toronto are asking for 50 per cent rent relief, all eviction applications withdrawn, and fair repayment plans that don’t put tenants at risk of eviction due to COVID-19, Noaman Ali writes.
Landlords are pushing “rent repayment plans” on individual tenants. In Crescent Town, in the former borough of East York, in Toronto, Pinedale Properties offered a tenant repayment of four months of arrears ($7,000) over 12 monthly instalments — an extra $583 per month. After difficult negotiation, the company offered a 10 per cent discount if the tenant repaid $3,500 upfront.
Many tenants have been too intimidated to negotiate. Payments even “a day late or a dollar short” can mean eviction proceedings. Such repayment plans during a recession and pandemic uncertainty set tenants up to fail. Thousands will quietly leave or be evicted — landlords, including Pinedale, have filed 6,000 COVID-19 eviction applications. This will exacerbate the housing crisis that, like COVID-19, hits racialized working-class communities the hardest.
Working-class tenants shouldn’t pay for a crisis that results directly from more than three decades of government policies that have systematically benefited the real estate industry and large landlords. Their profits have grown despite an unprecedented economic crisis they helped create. They should pay for it.
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Toronto’s housing crisis is partly rooted in federal government policy that, starting in the 1980s, cut funding for non-profit co-operatives and capital subsidies to build new rental housing. Rather than ensuring housing supply the policy is, per David Hulchanksi, to “leave it to the market and hope for the best.”
Markets prefer short-term returns on investments. In high-density construction, profits are best in building condominiums rather than purpose-built rental stock — each unit can be sold individually at high prices. But given high demand, owners of existing purpose-built rentals have also raked in profits.
In 1997, the provincial government passed “vacancy decontrol” — when a tenant leaves, landlords can increase rents for new tenants. Landlords often renovate units to justify ever higher rents for new tenants. Or, they boost profits from existing tenants by increasing rent up to three per cent “above guideline” (ranging from 0.7 to 3.1 per cent over the last decade) for infrastructural upgrades or cosmetic makeovers. Either way, poorer tenants get pushed out.
Meanwhile, rental housing stock has become concentrated in fewer hands. Governments have enabled what Martine August calls “financialization” of landlords: trusts and firms pool investors’ money to purchase ever more real estate, like shareholders in a firm. Private landlord dynasties continue registering their substantial holdings under untransparent shell companies.
Such firms lobby against regulations that may dent profits. Doug Ford’s government has promoted their interests, removing rent control on properties built after 2018 and making evictions easier through Bill 184.
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All this means massive profits. Only halfway into 2020, CAPREIT, among the largest firms, reported net operating margins, profits, of 64.5 per cent or $281 million — better than last year! MINTO Apartment REIT, with 62.9 per cent margins, reported being “highly resilient” through the crisis.
Astonishingly, large landlords want more government handouts. Tony Irwin, head of the Federation of Rental-housing Providers of Ontario, recently proposed a rent subsidy program to “help” struggling tenants by socializing costs across those “who can afford to pay a little more.” This logic is perverse: public subsidies for landlord profits funnelled through poor tenants.
Rent subsidies should target smaller “mom-and-pop” rental owners to help cover home mortgages, bills and other costs. Large landlords can easily absorb losing some rent while still being profitable.
Politicians, when not advancing large landlord interests, appear petrified by their power. Although tenant protests pushed city council to override the city solicitor’s legal opinion and legally challenge Bill 184, Mayor John Tory and council continue to avoid an emergency moratorium on evictions.
It’s high time politicians follow the lead of tenant struggles and find the political courage to concretely champion affordable housing. Tory can begin by using emergency powers to ban COVID-19 evictions, and push landlords to collectively negotiate substantial relief, not full repayment, with tenants.
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The Crescent Town Tenants’ Union’s more than reasonable demands can offer a baseline: 50 per cent rent relief, all eviction applications withdrawn, and fair repayment plans that don’t put tenants at risk of eviction due to COVID-19.
Whatever happens, working-class communities will continue organizing to ensure that they do not pay for a crisis created by political and economic elites.
Noaman G. Ali is an assistant professor of political economy at Lahore University of Management Sciences and an associate of People’s Defence Toronto.
