‘Why do we have to pay?’
Apartment tenants face rent increase following environmentally friendly renos
Khadijah Al-Maqdisy prepared kebabs and baklava to celebrate Eid al-Fitr with her son and granddaughter, spreading the food out on a table to break the month-long daily fasts of Ramadan.
It was such a nice day, she opened her new, double-paned windows to let the warm spring breeze into her apartment.
Ever since her landlord replaced them, she no longer has to mop up the water that for years leaked through her old windows. The new, energy-efficient glass panes mean the apartment doesn’t have the drafts it used to and is warmer in the winter.
“They use less energy, they save money,” she said.
But the savings on heating bills will soon dissipate as Al-Maqdisy and more than 200 other tenants in her Scarborough building have received notice that the landlord is raising their rent to pay for the windows and other environmentally friendly upgrades.
“They have to update their property to the standards of today to respond to climate change,” said AlMaqdisy. “Why do we have to pay? It’s not our property.”
Golden Equity, which owns 28 apartment buildings in Toronto, Ottawa and Hamilton, including Al-Maqdisy’s building in Scarborough, did not respond to the Star’s questions.
Canada has committed to eliminating all carbon emissions by 2050 and will have to get a move on to retrofit almost 17 million buildings across the country so that they no longer burn fossil fuels for heating — something that accounts for 13 per cent of all emissions nationwide.
One estimate says it would require electrifying one home per minute for the next 26 years.
But who pays for this enormous undertaking? While utility bills drop after switching from a natural gas furnace to an electric heat pump, for instance, the upfront costs can be higher.
The federal government recently ended a program to subsidize individual homeowners to undergo emission-reducing retrofits and expressed concern that low-income households weren’t benefitting. There are also municipal and provincial programs to help apartment building owners and condo boards undertake green renovation work.
The Canadian Infrastructure Bank (CIB) has committed more than $1.2 billion to energy retrofits for buildings, with much of that money going to owners of multiresidential buildings in the form of below-market loans.
But there’s nothing to stop landlords from jacking up the rent after completing the renovations, even if they were already subsidized with public dollars, says Nichola Taylor, a spokesperson for ACORN, a tenants rights organization that released a report this week detailing rent increases linked to environmental retrofits.
“We’re all for energy-efficient homes and other climate initiatives, but tenants shouldn’t be paying for it,” she said.
The ACORN report focused on a real estate company in the Prairies that signed a deal with the CIB to renovate hundreds of apartment buildings. Even before the green retrofits had started, the company issued rent increases of hundreds of dollars a month, the report found.
“Taking taxpayer money to do a few retrofits and at the same time using it as an excuse to raise rents on tenants is not acceptable,” Taylor said.
The report has already had an effect.
After being alerted to the rent hikes by ACORN, CIB said from now on it will start requiring “specific assurances from rental building owners that the cost of building upgrades financed by CIB will not be used as a rationale to increase rent,” according to CIB spokesperson Ross Marowits.
While ACORN welcomed the policy shift, Taylor noted it is not an ironclad guarantee there won’t be rent hikes.
“The word ‘assurance’ in this letter does not assure tenants that their rents won’t go up,” she said.
Jonathan Hackett, head of sustainable finance at BMO, does work on both housing affordability and environmental retrofits. He said both issues involve a complex interplay of individual and collective interests and don’t have established solutions.
“It’s really hard. We’re trying to solve for lots of stakeholders, lots of balance, lots of demands,” he said. “Everyone is struggling to find a way to make a positive impact.”
When looking at ways to ensure environmental renovations don’t hurt tenants’ pocketbooks, Hackett cautions against making businesses meet additional requirements that would discourage them from pursuing a project at all.
“We don’t say, hey, just meet the bar. We’re going to force you to a higher bar than we hold the rest of the economy to. That feels like we’re fighting with one hand tied behind our back, whether it’s on affordability or on the energy efficiency side.”
There is a way to both enhance tenants’ rights and enhance the carbon performance and energy efficiency of buildings, says Brendan Haley, policy director at Efficiency Canada.
“It requires a mix of policies, not siloed policies,” he said.
The federal government has only been focusing on the climate change aspect of the problem via the infrastructure bank funding of green retrofits, he said. “But what we don’t have yet is a low-income energy efficiency program that provides the types of rules to ensure rents are affordable.”
Haley pointed to the Weatherization Assistance Program in the United States, where landlords sign agreements to limit rent increases.
“This makes sure any retrofit enhances tenant well-being,” he said.
No such guarantees were provided for Al-Maqdisy and the tenants at the apartment building on Markham Road in Scarborough.
According to its Landlord and Tenant Board application to increase rent beyond the guideline, Golden Equity spent more than $500,000 replacing windows with “units that promote energy conservation” and an old boiler with a high-efficiency model “to promote energy conservation.”
The company received authorization to raise rents 5.5 per cent, well above the provincially mandated 2.5 per cent rent increase guideline.
Al-Maqdisy, who is an ACORN member, says the costs of the retrofits in her building shouldn’t be borne by the tenants. “Our landlord is rich,” said Al-Maqdisy, who came to Canada over 30 years ago as a refugee. “Why should we pay?”