Posted September 9, 2021
A real estate firm will not pocket a $170,000 city grant for its renovations at a King Street East apartment building amid complaints of displaced tenants and jacked rents.
City politicians rejected Malleum’s application in a 6-4 vote late Wednesday after tenant advocates urged them to not approve the tax-based grant under a program meant to encourage redevelopment.
It’s time to “cut the purse strings,” Paula Grove, a tenant who lives in a different building once owned by Malleum, advised in recorded video delegation. “They don’t need the money. They just want the money.”
The decision to deny the grant for work at 540 King St. E. coincides with an effort by economic development staff to prevent developers from receiving city support for projects that displace tenants into a skyrocketed rental market.
The new criteria for programs designed to spur redevelopment downtown and around Barton Street and Kenilworth Avenue would rule out projects involving the renovation of existing residential units.
But exceptions are to be made, including for projects that don’t involve tenant displacement, affordable housing backed by government funding, buildings that have been vacant for two years and non-profit groups.
The shift, expected to be discussed further later this month, comes after council told staff to conduct a review in the wake of tenants urging council in July not to approve the Malleum grant.
A staff report noted the cost of the developer’s renovations at 540 King St. E. — which has 36 units between two buildings — was about $2.78 million. The work was expected to increase the assessed value to about $4.64 million from $2.5 million.
But in a letter to the city, Hamilton ACORN said displacement of tenants through renovations to hike rents and reap profits — renovictions — is fuelling a local housing crisis.
“Displaced tenants cannot afford the high rents if they need to re-enter the market,” wrote the tenant union that has pushed the city to strengthen renter protections.
Elizabeth Ellis, another former Malleum tenant, recalled in a video delegation Wednesday how she felt pressured to accept a buyout to leave 160 Sherman Ave. N. in 2018 amid deteriorating conditions.
The ACORN member said it was “shocking” to her that the city was considering giving the firm a grant.
“We shouldn’t be rewarding developers who are doing this,” Ellis said.
In a written submission to the city, Malleum said 160 Sherman Ave. N. was in “significant disrepair” when it took over the building and disputed the “characterization” that tenants “were misled or pressured.”
Similarly, the firm said when it started managing 540 King St. E., the “property was in complete disrepair, unsafe, and unfit for habitation.”
Moreover, “there were six active tenancies and 30 units without valid leases” and, of the six, four tenants had given the previous owner notice to end tenancies, the firm wrote.
To end tenancies, Malleum says it operates within provincial regulations.
“In any case where a landlord unilaterally ends a tenancy in order to renovate and re-rent a unit to a new tenant, this is wrong and there should be harsh consequences,” the firm added.
Economic development staff had recommended approving the $170,000 grant, saying they were “not in a position to independently verify any of the disputing claims.”
That would demand the “exploration of historical claims and facts, and ultimately require determinations of right or wrong,” which should be left to the Landlord and Tenant Board.
Article by Teviah Moro for the Hamilton Spectator