Posted October 17, 2019
A group of Hamilton tenant advocates are disappointed after city councillors supported a grant application for a developer they say pressures tenants to make way for high-end renovations.
"They don't want to ruin development in the city. That's their main concern," Mike Wood, chair of Hamilton ACORN, said of elected officials Wednesday.
Wood had asked councillors at city hall not to award a tax grant worth roughly $35,000 over nine years to Malleum Real Estate Partners III to renovate a three-storey building at 301-303 Barton St. E.
The handout is part of the city's Barton-Kenilworth Tax Increment Grant Program, which aims to encourage redevelopment. A similar program exists for downtown.
The rationale is that improving once-derelict properties will generate more tax revenue when the assessed value of the properties goes up.
However, Wood and ACORN have raised concerns over developers pressuring tenants to leave buildings targeted for renovation — a process known as renoviction.
"No matter how you look at it, the city's paying for this, too," Wood said in reference to the cost of displaced tenants winding up on the street or in shelters. "The city should get it, but I don't think they do."
The advocates have focused on Malleum, a firm that has purchased and renovated residential and commercial properties mostly east of downtown, including along King Street and Barton Street East.
Elizabeth Ellis, an ACORN member, said the firm pressured her to take a $2,000 buyout to leave 160 Sherman Ave. N. "Financially, what they gave us was not enough for first and last month's (rent) and to move our stuff."
Another tenant, who didn't want to be named because she feared repercussions, said she has been pressured to leave her apartment of 11 years at 41-43 Albert St. "I'm staying put. I can't afford to move."
The woman said tenants in five apartments in the low-rise, 13-unit building still pay under $700 a month but renovated units go for $1,325 a month.
Malleum has put the property up for sale with a listed price of $2.4 million. The advertisement notes the buyer can renovate the remaining five units and "re-rent at $1,295 (or higher)."
When the firm bought 301-303 Barton St. E. in 2017, it was vacant — possibly for many years, partner Gregory Clewer said in an email to The Spectator.
"The building was in complete disrepair and it was home to illicit activity at the time of our purchase. We have taken meaningful risk and invested considerable capital in order to repair the building in order to create four new homes for local families."
Clewer added: "We strictly adhere to, and go beyond, our obligations with respect to repair and upkeep of buildings as well as our obligation to operate within Ontario's laws. We are in strong support of the city introducing harsh consequences for any landlord who illegally 'renovicts' tenants or in any case where a landlord neglects their obligations related to repairs and upkeep."
During Wednesday's general issues committee meeting, some councillors praised Malleum's work and the tax increment program.
"I applaud what they have done," said Coun. Sam Merulla said, adding "20 years ago, we were begging for it."
But Coun. Terry Whitehead expressed discomfort over not knowing the tactics developers use to empty buildings before they apply for grants.
"Ultimately, we're allowing developers to push out vulnerable and high-risk tenants in our community. That's not acceptable."
Jason Thorne, head of economic development, said when the application was submitted for 301-303 Barton St. E., staff understood the building to be vacant. Thorne added investigating how buildings become vacant would be a challenge due to limited staff resources and "potentially very complicated."
Staff shouldn't be expected to be "super-sleuths," said Coun. Chad Collins, arguing the city can rely on evidence from the provincial Landlord and Tenant Board to decide whether to support grant applications.
"In the absence of having that information in front of us, then these projects go forward."
Two weeks ago, councillors backed a revamped approach to the tax increment program that places emphasis on providing tenants with education packages outlining their rights, market conditions and resources to help them.
Coun. Nrinder Nann, who has taken up ACORN's cause, said she plans to ask Malleum for a meeting to "ensure they're being a good developer."
Nann told the advocates the onus shouldn't be placed on tenants to provide the city with proof of renoviction.
Article by Teviah Moro for the Hamilton Spectator