Hundreds of tenants in Montreal’s East Side spared from big rent hikes in $120M deal

Tenants at a 720-unit apartment building in east Montreal will have their rents protected from excessive annual rent increases thanks to a $120 million deal.

The initiative, backed by a housing advocacy group, the city and the province, comes at a time when various levels of government are under increasing pressure to address Montreal’s growing housing crisis.

An organization in the Pointe-aux-Trembles district that specializes in affordable housing, the Mainbourg Corporationacquires the real estate complex known as The La Rousselière estateofficials announced Friday.

The complex, which is home to more than 1,500 people, is located on Sherbrooke Street East, at the corner of 52nd Avenue.

Benoit Dorais, head of housing on Montreal’s executive committee, said the deal will see 1,500 homes taken off the speculative market and placed under the management of an entity dedicated exclusively to managing affordable housing.

That speculative market has contributed to rapidly rising rents in the Montreal area, far above affordability as real estate companies seek to profit from the housing crisis.

Le Domaine La Rousselière, home to over 1,500 people, is located on Sherbrooke Street East, at the corner of 52nd Avenue. (Radio-Canada)

The deal was sealed in recent weeks with a $75 million loan from the Caisse d’économie solidaire Desjardinsa cooperative that aims to invest in the social economy by providing loans to non-profit organizations.

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, will cover the rest as it continues its efforts to invest in long-term affordable housing.

The $120 million deal includes $10.4 million for renovations.

“A project like this is really promising, because we know that if we want to maintain the affordability of our housing in the city, we have to build, build, build. But we also have to take a lot of housing off the speculative market,” Dorais said.

Mixed housing at affordable prices

Domaine Rousselièrewhere several families and individuals live, was already on the list of properties that Montreal considered for the city to purchase first.

The right of first refusal is a procedure that gives cities like Montreal the right to match a private purchase offer made to the owner.

According to data collected by Radio-Canada in June, nearly 350 owners have received an official notice from Montreal since last year stating that their building or land is subject to the city’s right to match a bid.

A group of investors from Ontario owned the Domaine Rousselière The complex has been in use for many years and the land is estimated to be worth approximately $110 million.

Francine Fortier already lives in the complex and told Radio-Canada she is happy that her rent will remain affordable for many years to come.

“Today’s seniors don’t have much income from retirement benefits and wouldn’t even be able to pay the $1,200 to $1,500 a month rent,” she said.

She has been a tenant with her husband for 45 years, and the couple pays $775 a month for their apartment, including parking and electricity, an exceptionally low rate for a two-bedroom apartment in Montreal.

Rents have increased 16.4 percent in the past year, with the average rent now exceeding $2,000 per month for the first time in the city’s history.

On Domain Rousselière‘s website, three-bedroom apartments are still advertised for $1,350 per month. On average, renters pay $990 per month in rent.

Dorais says that as rents rise, affordable housing is lost.

Managing rent increases in the complex

The buyer, Mainbourg Corporationis a non-profit organization that already owns 500 community housing units in East Montreal.

Chief Executive François Claveau said the organization’s solid foundation was needed to inspire confidence among investors, and “we needed subsidies and government support.”

The complex will still face annual rent increases, like other apartments in the city, he said. However, those increases will be significantly lower than the substantial increases endured by residents in units owned by for-profit companies that profit from the speculative market, he explained.

Quebec Housing Minister France-Élaine Duranceau and Montreal Mayor Valérie Plante both praised the initiative as a way to combat high rent increases. (Radio-Canada)

In June 2022, Quebec announced a $350 million subsidy for housing projects funded by the Solidarity Fund FTQ And Movement DesjardinsThe commitment was to make almost 3,000 affordable and social homes available over a three-year period.

This week, the province pledged to build 8,000 social and affordable homes, but the Housing Minister said projects like this one in east Montreal could speed up the process.

Taking these homes off the speculative market and keeping them affordable creates a “win-win situation,” France-Élaine Duranceau said at a press conference on Friday.

“We have to do more,” she said, adding Montreal Mayor Valérie Plante: “I absolutely agree.”