How the tight housing market is complicating the relationship between 1st-time homeowners and tenants

As desperate first-time homebuyers look for ways into the tight housing market, some find they may be the bearers of bad news for tenants paying below-market rent.

Although house sales and prices in Canada have dipped since the spring frenzy saw record prices and bidding wars, they are still well up compared to this time last year, according to the Canadian Real Estate Association

Here's what aLondon, Ont., landlord and tenant, and a city councillor haveto sayabout how the housing crunch is impacting those involved in the market:

The tenant

Last Friday, Matthew Rowe of London, Ont., on Fridaygot a letter from his new landlord. It included the dreaded N12.

"The new owner doesn't want to have anyone stay here," said Rowe who pays below-market rent at just $1,000 a month for a two-bedroom he shares in a triplex with a roommate on Baker Streetin Old South.

AnN12 is the official mechanism to remove a tenant from a property if the owner wants to move in.

It's a shocker. It feels like having the rug pulled out from underneath me.- Matthew Rowe, tenant

Rowe, an artist and personal trainer who admits he doesn't make a lot of money,has been given two options: to move out of the apartment he's called home for the last six years, or take the cash-for-keys deal.

"They offered the tenants here $2,000within 30 days to move out," Rowe said. That's not enough moneyfor first and last month's rent on a new place in the same neighbourhood, he added.

"It's a shocker. It feels like having the rug pulled out from underneath me."

"My heart goes out to Matthew and the other people in the building, but unfortunately, this is a very common issue, a very common tactic by landlords," saidSamantha Lawrence, who's with theLondon chapter of Acorn Canada, atenants advocacy group.

"They're obviously hoping that they will jump at the pittance that they've thrown at them andthey'll leave immediatelyand in this kind of a housing climate, it'sjust not feasible for anyone," she said.

The new homeowner

For the last three years, construction worker James Lyndon hadbeen trying to secure the proper financing to buy a home with his wife who works as a caretaker at Western University. They're currently renting a duplex near Victoria Hospital and have a 12-year-old son who has autism.

The couple found a solution when Lyndon's sister and brother-in-law sold their house and got in on the deal on Baker Street.

"It's taken three long years to be able to establish our credit," said Lyndon.

Getting a home when you're just working-class people is very difficult.-James Lyndon, first-time homebuyer

The triplex on Baker Streetneeded a lot of work, said Lyndon, but they liked it, and since it had been on the market for months, they got a good deal.

In addition,the listing agent had promised the tenants wouldn't be left with nowhere to go, he said.

Lyndon feels on the hook for the tenantsand has been trying to find themnew homes, even writing reference letters.

He also worries about making rent payments while simultaneously paying the mortgage.

"I'm in a real predicament here."

Increasing housing stock cited askey

London's housing crisis is really complex, says city Coun.Shawn Lewis.

While some landlords recouprenovation costs quickly after tenants are forced to leave for a so-called renoviction, Lewis said it is an owner's right to invest in their property.

"It's a multi-layered problem," he said."You don't want to see people losing the place they have. But at the same time, the property owners do have a right to occupy it for their own family members."

Plus, Lewis said, "You want properties to have investments made in them so that people areimproving their homes and improving their properties for the future."

Lewis believes both governments and the private sectorhave a role in boosting housing stock, at any price point.

"The more inventory, the less price pressure you have on existing units."