Squeezing Profits: Landlord and Tenant Board Grants Timbercreek 7.2 Percent Rent Increase

From The Leveller

By Andy Crosby

A couple dozen Ottawa residents braved the dipping temperatures and frigid downtown winds to rally at the Landlord and Tenant Board (LTB) on Albert Street on Nov. 13.

Tenants of Sunset Heights Apartments at 2880 Carling Avenue and their supporters with ACORN (Association of Community Organizations for Reform Now) were challenging an application filed by their landlord Timbercreek Asset Management. Timbercreek wanted an above guideline rent increase (commonly referred to as an AGI) of 5.4 percent above the provincially mandated 1.8 percent maximum.

Sunset Heights tenant Penelope Xidous spoke to the crowd gathered in front of the building, stating that they wanted the AGI request decreased to a fairer percentage.

“We don’t feel that it’s fair that we have to pay the full amount of this increase when apartment units are crumbling,” said Xidous. “We are sick and tired of all the maintenance issues being ignored.”

“We’re tired of all the power, the water, the elevator shutdowns, the heating problems, the major structural damages in the building,” continued Xidous. “We have found possible health violations, fire and safety violations.”

Tenants at the rally held signs and spoke of a building – their home – experiencing systematic neglect.

“In 2016, Keller Engineering did a report on the structure of the building and found major issues and concluded that those structural repairs needed to be done immediately because they put peoples’ safety at risk,” said Xidous.

Despite the cold, the rally beamed with enthusiasm as people chanted “fight, fight, fight – housing is a right,” and “hey hey, ho ho – this rent increase has got to go.”

“Today, it’s nearly 2020 and those structural damages have not been repaired yet,” said Xidous. “But they have taken the time to do renovations to the common areas and lobby, things that beautify the building cosmetically so that they can attract new tenants so they can make more money, while at the same time ignoring all the major issues in the building.”

In the lead up to the rally on Nov. 8, ACORN organized affected tenants in the lobby of the building to sign a petition to fight the rent increase and organize for repairs.

Ottawa ACORN is a membership-based organization of low- and moderate-income people fighting for social and economic justice, according to local head organizer Ashley Reyns. ACORN responded to Sunset Heights tenant concerns about the AGI application and helped organize the rally “to fight the unjust rental increase and to demand immediate repairs in the building,” Reyns told The Leveller. ACORN wants the Landlord and Tenant Board to dismiss Timbercreek’s application.

OVER-THE-TOP POLICING INTERVENTION

As the crowd first gathered outside 255 Albert Street, a plain-clothes security guard opened the door yelling for them to move onto the sidewalk – although his version of what constituted the sidewalk was indistinguishable from the 15 or so feet from the building doors to the street. He threatened to call the police as the small crowd moved toward the street and gathered beside a “danger” sign warning of falling ice and snow.

Around 15 minutes later five Ottawa Police Service vehicles (including a paddy wagon) arrived, greeted by gasps from the crowd who could not believe the degree of armed force summoned to counter a small and peaceful demonstration of predominantly elderly folks.

To put the cherry on top, over half a dozen police officers gathered in the space that the security guard had belligerently ordered the crowd to disperse from moments before. “Look at the police presence, unbelievable!” exclaimed one of the elderly rally-goers. “We’re a violent mob, look out,” mocked another.

INSIDE THE LANDLORD AND TENANT BOARD – UNPACKING THE AGI

According to the Notice of Hearing prepared by the LTB and obtained by The Leveller, Timbercreek applied for an Above Guideline Increase to offset costs associated with “extraordinary” increases in municipal taxes and charges as well as “capital expenditure work.”

Timbercreek claimed municipal tax amounts of $187,080 in 2016 and $201,902 in 2017 to pass on to tenants. According to Community Legal Education Ontario (CLEO), AGI maximums are set at three percent for capital expenditure work but municipal tax claims carry no maximum. From the LTB application it is unclear where the “extraordinary” increase took place, but what is clear is that Timbercreek – a multinational corporation that manages over $10 billion in assets – intends to offset obligations to pay taxes by shifting the burden to already-strapped tenants.

The AGI is part of a larger trend of neoliberal deregulation of the rental housing sector, initiated in Ontario by the Mike Harris Progressive Conservatives with the 1997 Tenant Protection Act (TPA). In addition to the AGI, the TPA implemented vacancy decontrol which enabled landlords to increase the rent of a vacant unit by an unlimited amount. Xidous, who has been a tenant at Sunset Heights since 2009, noted that new tenants pay higher rents as well as utility costs. Landlords refer to the latter as “sub-metering utilities,” one of many tactics to squeeze more profits.

Timbercreek also claimed $656,821 in capital expenditure work according to the LTB form, including garage repairs, exterior wall repair and caulking, handicap door operations, relining of hot water tanks, temperature monitoring and control system, common area renovations, and garbage chute repairs. According to CLEO, capital expenses are major repairs, renovations, replacements, or additions that are not part of normal ongoing maintenance.

So let’s unpack each of these capital expenditure items.

First, wall repair and caulking, common area renovations, and garbage chute repairs could arguably fall under cosmetic repairs and normal ongoing maintenance.

Second, despite relining hot water tanks and installing a temperature monitoring and control system, there remain systemic problems with heating and hot water in the building. Xidous told The Leveller that numerous tenants have complained that it takes a long time for hot water to reach their units. In addition, with the new temperature control system, Timbercreek controls the heating for all units in the building. The sensors for the units were installed in the living room areas and as a result, the bedrooms do not have enough heat, causing issues for families with young children.

Third, despite claiming almost $17,000 for “handicap door operations,” the new mechanism does not work. Xidous attempted to present a video at the LTB hearing of the door failing to open. “It’s jamming and then you can see me trying to open it and I’m having to use all the force of Hercules to try and, like, get the door open until it finally does,” she said. Xidous said that during the hearing the LTB refused to view the video and shrugged it off as a maintenance issue.

Finally, the largest expenditure – garage repairs at $350,009. First, Xidous referenced an assessment on the structure of the building completed by Keller Engineering in 2016 that outlined major structural damages that required immediate attention. Despite Timbercreek completing repairs in July 2019, Xidous claims that the issues outlined in the Keller report have not been addressed. Second, despite the repairs only being recently completed – and not following the AGI timeline regulations – the LTB was indifferent.

For Xidous and the tenants opposing the AGI, there are two major issues at play here. First, Timbercreek has predominantly focused on cosmetic patches at the expense of major issues; the tenants charge that the landlord’s goal is to attract new tenants and earn greater profits. Second, the entire process with the Landlord and Tenant Board has been lopsided and unfair.

And the City of Ottawa is implicated. Xidous claims that numerous calls to the City’s Bylaw department regarding maintenance issues went unanswered. They therefore had no official evidence (the LTB dismissed tenant photos and videos) of ongoing maintenance issues and Xidous feels that this really hurt their case.

“I just kinda wish that things were a little bit fairer for everyone,” she said. “Even though they’re a big corporate company with lots of money and lots of power, the law should technically be the same for everyone, whether you’re rich or poor.”

Further, Timbercreek’s lawyer is a regular at AGI hearings with the Landlord and Tenant Board.

“He knows the system and he knows how to manipulate it in their favor,” said Xidous. “Even though we had good points [they were] thrown out, like they didn’t matter.”

THE AFFORDABILITY CRISIS AND THE AGI

What all this amounts to is a decision rendered by the LTB that granted Timbercreek the 5.4 percent rent increase. With the going rate for a one bedroom apartment in the building, at $1,109, the total 7.2 percent increase would raise the rent by almost $80 per month.

The seeming increasing trend of AGI applications, brought by landlords such as Timbercreek, will continue to impact the affordability crisis plaguing the city.

“With these rental increases, many people are worried how they’re going to afford it,” said Xidous. “There are many others in the building who are going to have issues, because some people are on disability. And disability only provides so much money and now with [Ford’s] cutbacks, they’re not getting as much as they were before. So of course when the rent goes up and their disability doesn’t, it makes it difficult to afford to live here and now they’re worried because nobody knows where they can afford to go.”

THE HERONGATE CONNECTION

Outside the Landlord and Tenant Board hearing, ACORN member Mavis Finnamore likened the fight against the AGI increase at 2880 Carling Avenue to the ongoing struggle in the Herongate neighbourhood in Ottawa South. Finnamore lived in Herongate for 30 years before being forced out of her home in the first wave of demolition-driven evictions (demovictions) in 2016.

Owner and property manager Timbercreek has become increasingly active in Ottawa’s rental market in recent years, having purchased a 21-hectare plot of Herongate (which they rebranded Heron Gate) as well as the towers at 2880 and 2890 Carling, among others.

Finnamore described how Timbercreek allowed townhomes to fall into disrepair to justify two rounds of demovictions. The current plot where Finnamore once lived is now home to three six-storey towers offering “resort-style living.”

“We have to start sounding the alarm, we have to keep protesting, and we have to absolutely keep this in the public eye. This issue is not going to go away. These patterns will continue in other buildings,” said Finnamore. “They have to stop treating people like cattle that can be moved around, this is a real disservice against low-income people.”

Both Finnamore and Xidous identify a link between the struggle at Herongate and the opposition to the AGI at Sunset Heights.

“They’re allowing the buildings to deteriorate to squeeze the profits out of tenants and then what they plan on doing is evicting everyone,” said Xidous.

Sunset Heights tenants’ experiences with Timbercreek’s Building Manager are testament to that.

Xidous describes threats of eviction directed at tenants who complain or speak out.

“So I don’t know what’s going to happen to me,” she said. “I’ve been a tenant here for 10 years. I’ve been a good tenant. I’ve always paid my rent on time, my bills on time. I’ve never caused any issues or problems. But now I don’t know if Timbercreek is going to consider me an issue or a problem because I wanted to defend myself and others, and we technically have a legal right to do that.”

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