Hamilton Spectator: Hamilton council thinks twice about grant for developer after tenant outcry

Posted July 6, 2021

Posted July 6, 2021

Jackson Gates remembers how his mom reacted when she was asked to leave her Hamilton apartment so the new owner could do renovations.

“She didn’t want to leave, and rightfully so. It was the place that she called home.”

That was November 2018.

But eventually, after continued pressure from the landlord, his mom, Tracie, who got by on a disability pension, accepted a buyout and left 540 King St. E.

“She stood her ground as long as she could,” her son recalls.

Tracie’s move to an apartment at Barton Street East and Emerald Street North meant a jump in rent to $1,200 from $800.

It also shook the relative stability she’d achieved in managing her addiction, moving her farther away from health services, Gates says.

On July 2020, her life ended at age 55.

“She had a fentanyl overdose and died alone at home on her couch.”

On Monday, city politicians heard from tenants who urged them not to approve a roughly $170,000 tax-based grant over five years to real estate firm Malleum for its work at 540 King St. E. under a municipal program that aims to encourage redevelopment.

A city staff report noted the cost of Malleum’s renovations on the two buildings with 36 units between them is estimated at about $2.78 million and expected to increase the assessed value to roughly $4.64 million from $2.5 million, which means more tax revenue for the municipality.

But tenant advocates told councillors such breaks for developers who push residents out for renovations and hike rents — often called renovictions — amid a housing crisis aren’t in Hamilton’s interest.

“Development shouldn’t be at the expense of low-income tenants. We need the city to put the community first,” said Darlene Wesley, a member of Hamilton ACORN, a local organization that advocate for renters’ rights.

Gates, who is a paralegal, agreed.

“I am more than confident that they know exactly how to recoup their costs without using public tax dollars,” he told The Spectator about Malleum. “They don’t need more people’s money.”

In an email, Gregory Clewer, co-founder of Malleum, said he and his colleagues “strongly support” ACORN’s “initiatives to end renovictions and all other landlord actions that contradict Ontario and municipal laws.”

Clewer added: “We have previously recommended that the City of Hamilton increase scrutiny of all city grant applicants and believe that any applicant that has not complied with the law be denied the right to participate in city-run grant programs.”

In 2019, ACORN urged council not to support a grant for Malleum worth $35,000 over nine years for renovations at a building on Barton Street East.

At the time, Clewer told The Spectator the building was “in complete disrepair” and had been vacant. “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.”

Elected officials backed that subsidy. But on Monday, they opted to direct staff to meet with ACORN and Malleum before reporting back with policy revisions for the program as well as a legal analysis.

Coun. Nrinder Nann said the tax-increment grants were initially meant to breathe life back into commercial areas in the lower city after a slump in the 1990s.

But recently, property developers have employed “aggressive buyout tactics” to clear out buildings for renovations and hike rents “astronomically” before applying for hundreds of thousands in city grants, she said.

“On principle, I simply can’t approve this grant, nor the practice to continue — our city being used in this way during an affordable housing crisis by those kinds of private equity firms.”

Nann’s motion to refer the grant back to staff passed on a 10-2 vote.

Coun. Brad Clark said he wanted a “fulsome report” back to ensure staff can “respond to any potential issues around procedural fairness.”

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Article by Teviah Moro for the Hamilton Spectator