Charity does not decrease wealth
I’ve been managing properties in the Montreal district of Hochelaga-Maisonneuve for over fifteen years now. The district has been good both to me as an investor, and to my clients who own rental units in the area. Property values have appreciated and gentrification has raised our rents.
These changes are not without their consequences, especially for poorer residents in the area. Hochelaga has become more diverse as higher-income tenants have begun to move in, and the amount of affordable housing has decreased.
Many of Hochelaga’s low-income residents have not benefited over the same time-period. 32% of households were considered low-income by the latest Canadian census. Hochelaga-Maisonneuve is also one of the districts with the highest rate of elementary school students living in poverty.
A Complex Issue
I’ll be honest: I don’t have a magic-bullet solution to propose to these problems.
Real estate investors have done well in Hochelaga. The area is close to downtown. As rents in the downtown core have appreciated, the rental market has changed in HoMa. Foreign- and local students have moved in. So have young families and young professionals fleeing the now-expensive areas of the Plateau and Rosemont. Investors have been all to happy to accommodate them: renovating crumbling properties that were in need of some love and increasing the rent accordingly.
These profits haven’t been shared with many of the local residents. Gentrification has changed the types of stores that serve the area: fancy and expensive cafés and local fruit markets have replaced pawn- and discount shops. Low income tenants now have less places to shop. The number of affordable apartments is decreasing every year. Given the choice, landlords move out low-income residents when they can, raising their profits in the process and avoiding many social issues common with very low-income tenants.
It’s not easy to know what to do with this if you want to have a social conscience and make money in real estate.
Is the solution to somehow stop investing in Ho-Ma? To impose tighter rent control? This will discourage investors and perhaps gentrification, but it will have the same effect as rent control more generally in Quebec. The Regie’s policies for raising rent creates disincentive for property-owners to invest in maintaining their units. As a real estate professional working in Quebec, I can tell you this unintended consequence of rent-control is ubiquitous. No owner will invest to redo a unit to see a 10$ increase in rent. It makes no economic sense. The result is our buildings crumble, and low-income tenants live in ramshackle and decaying apartments that no landlord will invest to fix.
My gut instinct would be to say we need more social housing and perhaps higher municipal taxes to help finance them. This might increase the overall standard of housing available and benefit everyone – investors and lower-income families – alike. But I’m no sociologist.
Give Back to Ho-Ma’s Low-Income Families
Just because we don’t have a magic bullet doesn’t mean we should do nothing. That’s analysis-paralysis. Politics and large-scale, top-down solutions are important, but we don’t have to stand by while the politicians create them. There are simple and politically uncomplicated ways to make a difference. This holiday season, we’ve chosen to support CAP St-Barnabé, a charity organization that aims to fight poverty and increase the standard of living of theHo-Ma’s low-income residents. CAP St-Barnabé has a year-round food bank and special initiatives for the holiday season.
You can send cash donations here: https://www.canadahelps.org/fr/organismesdebienfaisance/carrefour-dalimentation-et-de-partage-st-barnabe-inc/
This holiday season we’ve set up donation-points for non-perishable food items that will go to their food bank. You can find the drop-off boxes at our two locations before December 13th :
3835, Wellington Street (Verdun) & 3965, Saint-Catherine Est (Hochelaga-Maisonneuve) during office hours.
Just find these boxes & drop off your donations.