Rising rents and 'economic evictions' spur housing group to buy a Saint John apartment building

A Saint John housing grouphas jumped into the city's red hot market for apartment buildings to preserve some lower- cost units for renters.

But Rehabitat Inc. warns more has to be done by government to protect tenantsand keep neighbourhoods affordable for all groups.

"Diversity is absolutelyessential to a healthy community," said Kit Hickey, executive director of Rehabitat.

"There is room for all of us."

Rehabitat, a private non-profit organization, owns and manages affordable housing units in Saint John.

Two weeks ago the organization responded to an apartment building buying spree underway in the city by both local and national investors by stepping into the market itself andsnapping up a 12-unit building in the Saint John neighbourhoodof Millidgeville.

Group pays 54% above property's assessed value

The group had to pay $780,000 for the building on Lauder Court to compete with prices privatebuyers have been paying, 54 per cent above the property's assessed value.

But Hickey said it had to be done.

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"We thought that it was important that we do our absolute best to acquire the building," said Hickey

"We've become increasingly concerned about the lack of affordable housing for the modest income population.We, as others have seen in the recent headlines, [see]properties being purchased, renovated and the rents increasing exponentially."

Properties have been in high demand all over New Brunswick this year and thathas been driving up prices, especially since late spring.

According to provincial government tax records $1.28 billion worth of real-estatesold in the province inJuly, August and September this year.

That's $250 million more than the same three months last year and 36 per cent above what the province had beenprojecting.

Investors buying across Canada

Included in that shopping frenzy were more than 100 apartmentbuildings purchased by investors from across the country. Often prices thatbuyers paidwere substantially above "market value," as set by provincialgovernment property assessors.

That has not been a problem for some tenants who have experienced a seamless change in ownership so far.

But others haven't been so lucky.

Skyrocketing rent and nowhere to turn

4 years ago

Duration 1:48

When William Morissette's two-bedroom basement apartment went from $740 a month all inclusive to $1,200 plus heat, he realized too late there was nothing he could do but pay or move.

Earlier this fall, Moncton's William Morissette wasgiven notice of a61 per cent rent hikeat his apartment.

He receiveda letter on Oct. 1 letting him know his rent would be going up by $460 a month starting Jan. 1.

Others, like tenants at 332 Sherbrooke St.in Saint John, were given notice to vacate by new owners by the end of January so renovations on theirapartments could be carried out and ultimatelyrents increased.

Province wants to prevent 'ripple' in economy

The province has expressed concern about landlords forcing renters to move out during the current surge in COVID-19 cases in southern New Brunswick but has been reluctant to ban the practice and disturb the flow of investment.

"We want to make sure we don't cause any ripple within the economy or within the whole housing market," Social Development Minister Bruce Fitch said last week about why the province would not temporarilyban the eviction of tenants during the pandemic.

All three opposition parties have been pushing against that position.

But Hickey believes much more effort is needed on the larger problem of maintaining affordable housing in neighbourhoods, where real-estate prices and rents have been escalating

"Many families are facing economic evictions," said Hickey.

She said new housing unitscoming on the market are priced well-above the affordability range for modest income individuals or families.

"The options are very limited for modest income households."