Council to Vote on Ending Financial Grants to “Renoviction” Properties

Joey Coleman/The Public Record

540 King Street East, a Malleum property.

Following a public outcry, if approved, Hamilton City Council will no longer provide financial incentives for residential renovations which evict existing tenants.

However, City staff write that Council must provide grants to applications already in progress under the existing rules of the Hamilton Tax Increment Grant, including the controversial grant for Malleum properties at 540 King Street East.

The HTIG program encourages residential property owners to renovate existing housing stock to increase property values.

The City gains additional property tax revenue and waives nearly 50% of the tax increases during the five years following property tax reassessment

In July, Council delayed deciding upon the $169,801.83 for 540 King Street East.

Malleum’s business model is to purchase older buildings, conduct extensive renovations that require the removal of long-term tenants, and “reposition” buildings into higher rent units.

ACORN delegated against the grant, and called on Council to stop incentivizing renovictions.

Council directed staff to study how to prevent similar grant applications in the future, and if they could deny the $169,801.83 tax grant to Malleum.

In a report for next week’s Council GIC, city staff recommend Council approve the grant to Malleum, writing “the Application has met all applicable HTIG Program terms.” There is a separate confidential report to Council, not available to the public, explaining the recommendations.

Proposed New Rules for Tax Grants

Future grants will be contingent on tenant protections which staff recommend Council add to the HTIG terms.

Under the proposed new rules, vacant properties must be empty for two years prior to applying for a grant, or the property be receiving some form of government affordable housing funding, or the property be both owned by a non-profit and the applicant be non-profit as well.

City of Hamilton’s affordable housing funding is available for developments that charge 125% of the average market rent defined by the Canada Mortgage and Housing Corporation.

The 125% definition equals approximately $1,315 per month for a one-bedroom unit based upon most recent CMHC report.

The two-year vacancy requirement hopes to exclude companies which “flip” properties by quickly renovating and “repositioning” residential rental units.

The staff report states the City is not able to adjudicate complaints regarding renovictions and cannot directly regulate landlord-tenant dispute matters. Staff state best left to the Landlord Tenant Board.

“Staff’s assessment that these subjective matters require the exploration of claims
and facts, and ultimately determinations of right or wrong, that should occur under the
Province’s jurisdiction in a formal tribunal setting via the LTB,” the staff report reads.

Council will debate the reports on Wednesday during their General Issues Committee meeting. The meeting begins at 9:30 am.

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