Yet another apartment building is being converted to condos, and at least one city councillor wants to know the impact such conversions have on low-income renters.
Coun. Terry Whitehead will introduce a motion at an upcoming emergency and community services committee asking how condo conversions impact the affordable apartment market. He also wants to know whether Hamilton has a healthy amount of available rental property.
“My concern is at a macro level,” said Whitehead after the planning committee approved turning 47 apartments at 54 Mohawk Rd. W. into condos.
“When we start taking rental units out of the marketplace, what impact does that have on renters?”
Housing advocates have been lamenting the city’s lack of affordable housing for years. To keep up with the demand, builders need to construct 629 rental units per year to keep up with demand.
In the last five years, city numbers show, 485 of the city’s 1,264 new units built were condos, and only 138 were apartments. The rest were for students and seniors.
Condos are also taxed lower than multi-residential apartment buildings. In recent years, for example, 125 Wellington St. N. changed from apartments to condos, which are considered residential. That property alone has resulted in a gross loss of $570,000 in taxes so far compared to if the building was still apartments.
At Tuesday's meeting, after a motion Coun. Chad Collins, councillors directed staff to come back with a report on the impact of condo conversions on local taxes.
The units converted to condos tend to be desirable higher-quality units, Whitehead said. Conversions such as the one at 54 Mohawk Rd. W. leave only lower-quality units for renters.
As of October 2012, Hamilton’s vacancy rate was 3.5 per cent, in line with other Ontario cities. When staff investigated the issue a couple of years ago, condo conversions hadn't impacted rental stock, said Joe-Anne Priel, general manager of community services.
It costs developers more to build apartments than it does condos, Mathieu Langelier, executive officer with the Hamilton Halton Home Builder’s Association, told CBC Hamilton earlier this year.
Unlike condos, where the money from the pre-sale of units can be used as collateral to fund the project, apartment developers need to find other ways to provide the cash to build the project.
When a building is converted from apartments to condos, renters by law can stay in their units and continue to rent.
The next emergency and community services meeting is Dec. 9.