Rising rents and 'economic evictions' spur housing group to buy a Saint John apartment building
Non-profit group concerned high rent costs are pushing people out of their own neighbourhoods
A Saint John housing group has jumped into the city's red hot market for apartment buildings to preserve some lower- cost units for renters.
But Rehabitat Inc. warns more has to be done by government to protect tenants and keep neighbourhoods affordable for all groups.
"Diversity is absolutely essential to a healthy community," said Kit Hickey, executive director of Rehabitat.
"There is room for all of us."
Rehabitat, a private non-profit organization, owns and manages affordable housing units in Saint John.
Two weeks ago the organization responded to an apartment building buying spree underway in the city by both local and national investors by stepping into the market itself and snapping up a 12-unit building in the Saint John neighbourhood of Millidgeville.
Group pays 54% above property's assessed value
The group had to pay $780,000 for the building on Lauder Court to compete with prices private buyers have been paying, 54 per cent above the property's assessed value.
But Hickey said it had to be done.
"We thought that it was important that we do our absolute best to acquire the building," said Hickey
"We've become increasingly concerned about the lack of affordable housing for the modest income population. We, as others have seen in the recent headlines, [see] properties being purchased, renovated and the rents increasing exponentially."
Properties have been in high demand all over New Brunswick this year and that has been driving up prices, especially since late spring.
According to provincial government tax records $1.28 billion worth of real-estate sold in the province in July, August and September this year.
That's $250 million more than the same three months last year and 36 per cent above what the province had been projecting.
Investors buying across Canada
Included in that shopping frenzy were more than 100 apartment buildings purchased by investors from across the country. Often prices that buyers paid were substantially above "market value," as set by provincial government property assessors.
That has not been a problem for some tenants who have experienced a seamless change in ownership so far.
But others haven't been so lucky.
He received a letter on Oct. 1 letting him know his rent would be going up by $460 a month starting Jan. 1.
Others, like tenants at 332 Sherbrooke St. in Saint John, were given notice to vacate by new owners by the end of January so renovations on their apartments could be carried out and ultimately rents increased.
Province wants to prevent 'ripple' in economy
The province has expressed concern about landlords forcing renters to move out during the current surge in COVID-19 cases in southern New Brunswick but has been reluctant to ban the practice and disturb the flow of investment.
"We want to make sure we don't cause any ripple within the economy or within the whole housing market," Social Development Minister Bruce Fitch said last week about why the province would not temporarily ban the eviction of tenants during the pandemic.
All three opposition parties have been pushing against that position.
But Hickey believes much more effort is needed on the larger problem of maintaining affordable housing in neighbourhoods, where real-estate prices and rents have been escalating
"Many families are facing economic evictions," said Hickey.
She said new housing units coming on the market are priced well-above the affordability range for modest income individuals or families.
"The options are very limited for modest income households."