The Leveller: Squeezing Profits: Timbercreek tenants resist skyrocketing rent increases

Posted January 23, 2020

Residents of the apartment towers at 2880 and 2900 Carling Avenue rallied in frigid temperatures and blustery winds on Jan. 18 to protest deteriorating conditions and unprecedented increases to monthly rent in their buildings.
 
Landlord Timbercreek Asset Management is under scrutiny for implementing above-guideline increases to rent (commonly referred to as an AGI) while the Carling towers fall into disrepair.
 
“Rent is not affordable for lots of people, not everyone who lives in Ottawa is rich,” ACORN (Association of Community Organizations for Reform Now) member Raghad Otibashy told the crowd. “They give the right to the landlord to increase the rent when our income does not increase.”
 
Numerous cars honked their horns in support of the brave group assembled on the sidewalk on Carling Avenue. A guide dog of a rally participant shivered uncontrollably in the biting cold, before her owner decided to depart for shelter.
 
“Tenants are fed up and uniting together to demand immediate repairs to apartment units and buildings owned by Timbercreek,” Penelope Xidous told The Leveller. “Landlords like Timbercreek shouldn’t be allowed to charge tenants with above-guideline rental increases when many of their building tenants are suffering through mold, ignored maintenance repairs, pest infestations, problems with hot water, heat and safety issues.”
 
Xidous is a tenant at 2880 Carling Avenue and a member of ACORN, which organized the protest.
 
“Given [the City of Ottawa’s] major housing crisis with historically low vacancy rates and many tenants paying more than half their income on housing and utilities,” wrote ACORN in a press release, “governments should be concerned about negligent landlords passing down costs to tenants through unjust AGIs.”
 
Residents have been smacked with continuous AGIs. The Leveller obtained a copy of a December 13 letter to tenants notifying of a proposed rent increase of 5.2 percent. This includes a three percent increase above the provincially mandated maximum of 2.2 percent for 2020, and represents a $60 per month increase.
 
The proposed rent increase would come into effect on April 1, 2020, subject to approval by the Landlord and Tenant Board (LTB) at an upcoming hearing, which has not yet been scheduled.
 
In the letter, Timbercreek justified the increase to “reflect significant investments made to improve the structure, systems or common areas of the building.”
 
Despite these claims, tenants feel that aesthetic improvements are taking precedence over structural issues. 
 
Only one month prior, on Nov. 13, the Landlord and Tenant Board granted an AGI of 5.4 percent above the provincially mandated 1.8 percent maximum for 2019, despite public outcry from tenants who rallied outside the hearing.
 
Xidous spoke to the crowd gathered in front of the building on Albert Street.
 
“We don’t feel that it’s fair that we have to pay the full amount of this increase when apartment units are crumbling,” she said. “We are sick and tired of all the maintenance issues being ignored.”
 
“We’re tired of all the power, the water, the elevator shutdowns, the heating problems, the major structural damages in the building,” continued Xidous. “We have found possible health violations, fire and safety violations.”
 
Tenants at both rallies held signs and spoke of a building – their home – experiencing systematic neglect.
 
“In 2016, Keller Engineering did a report on the structure of the building and found major issues and concluded that those structural repairs needed to be done immediately because they put people’s safety at risk,” Xidous said at the earlier rally, on Nov. 13. 
 
Despite the cold, rally participants were enthusiastic chanting “fight, fight, fight – housing is a right,” and “hey hey, ho ho – this rent increase has got to go.”
 
“Those structural damages have not been repaired yet,” said Xidous. “But they have taken the time to do renovations to the common areas and lobby, things that beautify the building cosmetically so that they can attract new tenants so they can make more money, while at the same time ignoring all the major issues in the building.”
 
INSIDE THE LANDLORD AND TENANT BOARD – UNPACKING THE AGI
 
According to the Notice of Hearing prepared by the LTB and obtained by The Leveller, Timbercreek applied for an above guideline increase to offset costs associated with “extraordinary” increases in municipal taxes and charges as well as “capital expenditure work.” 
 
Timbercreek claimed municipal tax amounts of $187,080 in 2016 and $201,902 in 2017 to pass on to tenants. According to Community Legal Education Ontario (CLEO), AGI maximums are set at three percent for capital expenditure work but municipal tax claims carry no maximum. From the LTB application it is unclear where the “extraordinary” increase took place, but what is clear is that Timbercreek – a multinational corporation that manages over $10 billion in assets – intends to offset obligations to pay taxes by shifting the burden to already-strapped tenants.
 
The AGI is part of a larger trend of neoliberal deregulation of the rental housing sector, initiated in Ontario by the Mike Harris Progressive Conservatives with the 1997 TPA (Tenant Protection Act, an Orwellian name if there ever was one). In addition to the AGI, the TPA implemented vacancy decontrol which enabled landlords to increase the rent of a vacant unit by an unlimited amount.
 
Xidous, who has been a tenant at 2880 Carling Avenue since 2009, noted that new tenants pay higher utility costs, referred to by landlords as “sub-metering utilities,” one of many tactics to squeeze more profits.
 
Timbercreek also claimed $656,821 in capital expenditure work according to the LTB form, including garage repairs, exterior wall repair and caulking, handicap door operations, relining of hot water tanks, temperature monitoring and control system, common area renovations, and garbage chute repairs. According to CLEO, capital expenses are major repairs, renovations, replacements, or additions that are not part of normal ongoing maintenance.
 
For Xidous and the tenants opposing the AGI, most of the claimed capital expenditures fall under general maintenance, and the structural issues and systems-related problems remain. Tenants say hot water is still difficult to obtain and that the “handicap door operators” don’t work properly, for example, despite Timbercreek’s expense claims. With Timbercreek’s focus on cosmetic patches at the expense of major issues, the tenants charge that the landlord’s goal is to attract new tenants and earn greater profits.
 
In addition to ongoing battles with the landlord, the tenants feel that their dealings with provincial and municipal bodies over these matters have been lopsided and unfair, including with the Landlord and Tenant Board and City of Ottawa.
 
Xidous claims that numerous calls to the City’s Bylaw department regarding maintenance issues went unanswered. They therefore had no official evidence (the LTB dismissed tenant photos and videos) of ongoing maintenance issues and Xidous feels that this really hurt their case.
 
“I just kinda wish that things were a little bit fairer for everyone,” she said. “Even though they’re a big corporate company with lots of money and lots of power, the law should technically be the same for everyone, whether you’re rich or poor.”
 
Further, Timbercreek’s lawyer is a regular at AGI hearings with the Landlord and Tenant Board.
 
“He knows the system and he knows how to manipulate it in their favor,” said Xidous. “Even though we had good points [they were] thrown out, like they didn’t matter.”
 
THE AFFORDABILITY CRISIS AND THE AGI
 
Ultimately, the LTB granted Timbercreek the 5.4 percent rent increase. With the going rate for a one bedroom apartment in the building, starting from $1,109, the total 7.2 percent increase would raise the rent by almost $80 per month. Adding insult to injury is the almost immediate application for another AGI, which would further increase rent by $60 per month. 
 
The seeming increasing trend of AGI applications, brought by landlords such as Timbercreek, will continue to impact the affordability crisis plaguing the city.
 
“With these rental increases, many people are worried how they’re going to afford it,” said Xidous. “There are many others in the building who are going to have issues, because some people are on disability. And disability only provides so much money and now with [Ford’s] cutbacks, they’re not getting as much as they were before. So of course when the rent goes up and their disability doesn’t, it makes it difficult to afford to live here and now they’re worried because nobody knows where they can afford to go.”
 
THE HERONGATE CONNECTION
 
ACORN member Mavis Finnamore spoke at both rallies, where she likened the fight against AGI increases at 2880 Carling Avenue to the ongoing struggle in the Herongate neighbourhood in Ottawa South. Self-describing as a “former victim of Timbercreek,” Finnamore lived in Herongate for 30 years before being forced out of her home in the first wave of demolition-driven evictions (or demovictions) in 2016. 
 
Owner and property manager Timbercreek has become increasingly active in Ottawa’s rental market in recent years, having purchased a 21-hectare plot of Herongate (which they rebranded Heron Gate) as well as the towers at 2880 and 2900 Carling, among others.
 
Finnamore described how Timbercreek allowed townhomes to fall into disrepair to justify two rounds of demovictions. The current plot where Finnamore once lived is now home to three six-storey towers offering “resort-style living.”
 
“When Timbercreek buys a property they fix up the outside,” said Finnamore on Jan. 18. “Then they cut back on tenant maintenance so they can have bigger profits for their investors.”
 
Finnamore described this as a strategy, a regular pattern of behaviour. “As in Herongate, their neglect is causing safety issues,” she said.
 
Finnamore wants the AGI portion of the law repealed, which risks exacerbating the homelessness crisis in the city.
 
“By giving landlords such high rent increases without making sure basic maintenance is done, the Landlord and Tenant Board is not protecting the tenants,” she said. “And it’s also contributing to rent increases being higher than inflation and wage increases [which] are making life miserable for low-income people.”
 
Xidous also links the struggle at Herongate with opposition to the AGI at the Carling towers.
 
“They’re allowing the buildings to deteriorate to squeeze the profits out of tenants and then what they plan on doing is evicting everyone,” said Xidous.
 
TARGETING TIMBERCREEK
 
Tenants’ experiences with Timbercreek’s Building Manager at the Carling towers are testament to the looming possibility of eviction.
 
Xidous describes threats of eviction directed at tenants who complain or speak out. 
 
“So I don’t know what’s going to happen to me,” she said. “I’ve been a tenant here for 10 years. I’ve been a good tenant. I’ve always paid my rent on time, my bills on time. I’ve never caused any issues or problems. But now I don’t know if Timbercreek is going to consider me an issue or a problem because I wanted to defend myself and others, and we technically have a legal right to do that.”
 
At the Jan. 18 rally, tenants and their supporters dropped a banner on the wall overlooking Carling Avenue at the foot of 2880 and entered the lobby at 2900 to deliver a list of demands to the building manager. 
 
After the building manager refused to open the door to the office, a tenant read aloud a list of demands, including immediate repairs, a meeting with tenants, and to cease all further AGI applications.
 
After the crowd dispersed, CBC News reported that in response to the protest, Timbercreek announced an Open House event to discuss tenant concerns on Jan. 29.
 
 
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Article by Andy Crosby for The Leveller

 

 

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