Human Resources Committee on June 9th, 2023

[The Chair, Liberal, Bobby Morrissey]

Give a short answer or a written answer, Mr. Vadivale.

[Krish Vadivale]

Very well.

[The Chair, Liberal, Bobby Morrissey]

Is it a short answer?

[Krish Vadivale]

I think contributing more rental housing units would be the first step. That would then create different avenues and different price points that would trickle down from supply, and at least edging closer to demand.

[The Chair, Liberal, Bobby Morrissey]

Go ahead, Madame Chabot.

Ms. Chabot, you have six minutes.

[Louise Chabot, Bloc, Thérèse-De Blainville, QC]

Thank you, Mr. Chair.

I want to sincerely thank the witnesses.

Mr. Laporte, I especially want to thank you. It's been a wonderful discussion. I'm very grateful to you for accepting our invitation, even if it was last minute. Also, we did, indeed, receive the brief you sent the committee, so thank you.

This past week, when we were talking about the impact of financialization, a witness from the Canadian Federation of Apartment Associations said in his remarks to the committee that only a tiny percentage of renters in Canada were renovicted. I see my colleague Ms. Ferrada just reacted to that statement. In your opinion, Mr. Laporte, how would you describe the experience of people in Rosemont with renovictions?

[Jean-Claude Laporte]

In our brief, we provided statistics on renovictions over the past two or three years, but they don't reflect the reality. Indeed, that is only the reality of renters who contacted us, so we don't know about all the renovictions.

The federation of apartment owners to which you're referring is correct to some extent: the majority of renters aren't victims of renovictions. If that were true, the situation would be even more disastrous than it already is.

The number of cases in 2021‑22 was quite low. Indeed, 168 households in 19 apartment buildings had to move following a significant increase in their rent. Most of those households had to relocate a significant distance from child care, primary schools and other services for children and parents, which is a real tragedy. Indeed, we're talking about human rights, and access to housing is one of them. We can't speak in the same way about the right to housing and the assets of companies listed on the stock exchange or elsewhere. They aren't the same. One seeks to commodify housing, which goes against the right to housing.

[Louise Chabot, Bloc, Thérèse-De Blainville, QC]

We agree with your analysis. Based on your observations, are individual property owners or big financial groups mainly responsible for renovictions ?

[Jean-Claude Laporte]

The vast majority, if not all, are investment funds or real estate investment companies. It's the property speculators who are doing the renovictions.

[Louise Chabot, Bloc, Thérèse-De Blainville, QC]

Have renovictions had an impact on renters, in terms of the cost of housing?

[Jean-Claude Laporte]

I'll give you a very specific example, one that might not mean much to people from outside Montreal. There was a case involving a renoviction on Saint-Zotique Street, in the heart of Rosemont, and we were helping those renters fight for their rights. Initially, everyone agreed to fight to stay in their units, but the new owner had more than one trick up their sleeve. Ultimately, only three of the 21 or 22 households or individuals who'd been there from the beginning are still living in their units.

You can see that there's money to be made. Initially, the new owner told renters that they would get three months' free rent or help with their moving costs. Then the owner increased the offer to $15,000 to get the renters out. You can understand that those people were really fed up and stressed by that kind of harassment. Eventually, they couldn't take it anymore, and most of them decided to move out and take the $15,000. They might have even gotten more than that, since negotiations were still under way.

Based on what a renter told us, the rent for a two-bedroom apartment went from approximately $700, which is quite unusual, to approximately $1,300 or $1,500. That might not seem like much to someone in Toronto or Vancouver, but the market in Montreal and across Quebec is different. Indeed, it's a good thing that our renters don't have to pay the kinds of rents being charged in a number of cities across Canada. That said, no matter the reason, it's inhumane to put people through that. I understand investors, but—

[Louise Chabot, Bloc, Thérèse-De Blainville, QC]

I'm sorry to interrupt you, but I think my time is up. However, I believe we'll be able to cite your comments as an example.

Thank you very much, Mr. Laporte.

[The Chair, Liberal, Bobby Morrissey]

Yes, your time is up, Ms. Chabot.

Madam Kwan, you have six minutes.

[Jenny Kwan, NDP, Vancouver East, BC]

Thank you very much, Mr. Chair.

I thank the witnesses for their presentations.

Just to pick up on what Mr. Laporte was saying, while I think that in Quebec the situation that he highlighted there is important to note, what's also interesting is that what's happening in Quebec is also happening elsewhere.

In a previous presentation by Dr. Nemoy Lewis, of the School of Urban and Regional Planning at Toronto Metropolitan University, he testified that:

A financialized landlord is a purchasing company that is privately held—an asset manager—or a publicly traded company—[i.e.] real estate investment trusts—that acquires rental properties at scale and applies financial logic, metrics and priorities to generate returns to shareholders and investors.

In his study, he looked at a 27-year period in Toronto. He found that this sort of financialized landlord engaged in 40% of the transactions in terms of turning over properties. Real estate investment trusts accounted for 7%, a smaller percentage, which is noted. However, he went on to say:

REITs do apply the same acquisition and management practices, which...we know, undermine Canada's duty to fufill [the] housing rights for all Canadians.

What's interesting to note in his particular study is that he focused on where the acquisitions were made, and then he also did a comparative analysis in the demographics and found that this was concentrated in targeting the Black population. In his study, he found that “[f]inancialized landlords account for actually 72.86% of all those units that have been transacted in those particular geographies”. The most important point in here, and I'm now coming to it, is this:

...in terms of displacement problems and financialized landlords. We examined evictions in the city of Toronto over the last four years, between 2018 and 2021. There were approximately just under 63,000 evictions in the city of Toronto. Financialized landlords accounted for 42% of those evictions. In terms of evictions for non-payment of rent, financialized landlords filed just under 80% of those evictions.

He goes on to provide further data. It seems to me that this is not really matching up with some witnesses that say, “Hey, I'm a REIT, and we don't do any evictions”. Financialized landlords, some might say, are not engaging in these practices, yet the data from independent studies shows otherwise.

I guess my question to Mr. Laporte is this. You mentioned some of the challenges that you face in the city of Quebec, and that you are seeing evictions taking place. The bottom line is this: Should housing be treated as a commodity or should housing be treated as a basic human right, as a place where people can acquire a home, a place where they can actually feel safe and that they are able to afford?

[Jean-Claude Laporte]

Thank you for your question.

Indeed, the study you quoted is interesting. I'm inclined to say it's a rhetorical question, because quite simply, if we say that housing is a commodity, it's no longer a human right.

Having a roof over one's head is the foundation for a decent life, one where you can start a family and thrive. Without it, the rest disappears. People wind up with physical and mental health issues and have significant difficulties raising children, who, in turn, have trouble at school.

Stable housing is essential, no matter where in the world you live. I truly understand that investors want to make money. In the current system, they're doing great, but it shouldn't come at the expense of others.

[Jenny Kwan, NDP, Vancouver East, BC]

Thank you.

The housing advocate made a very clear point about how housing should be treated as a basic human right, and I thank you for that answer. I don't think it was a rhetorical question from this perspective, because there is a bit of a debate here. Some people believe that housing should be seen as an investment tool, so I need to hear from witnesses on where they stand with respect to that.

On the question around the private sector—

[Jean-Claude Laporte]

If I may, I'd like to clarify that I didn't intend to give a rhetorical answer to your question. I simply wanted to say that it's obvious to me. That's why I gave the answer I did. I didn't mean to offend you.

[Jenny Kwan, NDP, Vancouver East, BC]

No, no offence is taken, because I think you see housing from a human perspective, and I think that's why, perhaps, you thought my question was rhetorical. Some people don't necessarily see that; they see it as an investment tool. Thank you for that.

I want to ask a next question with respect to the private sector. Some people will say that the NDP, for example, or those who want to address housing as a basic human right, somehow don't support the private sector, which of course is not true.

In the situation where we are at the moment, with our housing crisis, some witnesses, such as ACORN, have said there should be a moratorium on the acquisition of these older apartments that come into the market, which end up being turned over.

I see a signal from the chair. Quickly, given the current crisis that we're faced with, should we be stopping the acquisition of the housing that comes onto the market from being turned over for financial purposes, at least until we can get a handle on the crisis, and should the private market do new construction?

[The Chair, Liberal, Bobby Morrissey]

Thank you, Ms. Kwan.

That answer will have to come later, or in written form. We're well overtime.

[Jenny Kwan, NDP, Vancouver East, BC]

Maybe he can give just a yes or no.

[The Chair, Liberal, Bobby Morrissey]

Okay.

Could you provide a yes or no to Ms. Kwan's question?

[Jean-Claude Laporte]

Yes, as long as I know how to provide my response.

If I can give a direct answer to that question, it's—

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Laporte.

Madam Gray, you have five minutes.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Thank you, Mr. Chair.

Thank you to all of the witnesses for being here.

I have a couple of questions for Mr. Vadivale.

First of all, we heard earlier testimony today that red tape and government costs on housing were approximately 30% of the cost. Would you agree with that percentage? Is that what you're seeing as well?

[Krish Vadivale]

I don't have the exact number, but that would ring true to me. It would be in that ballpark, yes.