Housing in Montreal increasingly belongs to the private sector, and that worries
A recent study reveals that the increase in financial conglomerates in the Montreal rental stock is much larger than what is commonly admitted.
This first exhaustive analysis of financialized property at the rental level in North America shows that these new types of owners would have control over nearly 12% of all rental units found on the island of Montreal. In the Ville-Marie and Plateau-Mont-Royal boroughs, their spatial concentration is particularly significant, where this percentage increases to 32% and 18% respectively.
Two groups of the population would be particularly exposed to the disproportionate spatial density of financialized owners on the island. The first concentrates tenants for whom most of their low income is devoted to paying their rent. This group includes visible minorities and the student community. The second is made up of tenants who are financially better off, generally residing in condos or in new constructions, and whose rent far exceeds the average cost.
The study also highlights a “positive and significant” correlation between the percentage of units in a census tract that are owned by a financialized landlord and the percentage of tenants who are stress-stricken. costs associated with housing, which gobble up more than 30% of their income.
Rental housing as a financial product
Who are these new types of owners who consider “housing as a financial product that aims to produce a high return for the investor”?
< p>“These are real estate investment trusts, private investment companies, asset managers, pension funds or even hedge funds”, listed the main author of the study, Cloé St- Hilaire, at a press conference on Thursday.
These investment companies acquire rental housing, often high density, that they consider to be undervalued in order to renovate it and better increase the rent. The gentrification of neighborhoods induced by this financialization is usually marked by “aggressive” practices.
Among the players that are becoming more and more embedded in the Montreal rental market, the article mentions, among others, the Toronto private investment company Greyspring, which has increased its housing purchases in Montreal. She claims to want to “reposition the buildings with renovations to add value to the units”.
While Greyspring tries to veil these true financial motivations by employing “known financialized jargon”, these intentions remain relatively clear according to the trends observed by the researcher.
“What that really means is that their acquisitions and renovations will generally lead to higher rent levels in their units. We are talking here about a 4 1/2 downtown at $1,800 per month,” she said at a press conference on Thursday.
“An unprecedented assembly of data”
To draw this portrait, the authors of the research, Cloé St-Hilaire, Mikael Brunila and David Wachsmuth, had to use their ingenuity given the opacity of the information available on the owners, their companies and the shareholders. As a result, they carried out an “unprecedented assembly of data”, combining the information unearthed by a “web scraping” as well as open data.
The analysis combines information from the public census, the Montreal property assessment roll, the Quebec business register and private rental market announcements from the Craigslist and Kijiji platforms.
Although sustained research work by the researchers has enabled them, all in all, to shed light on the extent of the phenomenon of the financialization of housing in Montreal, the authors of the study do not fail to raise the flagrant asymmetry that prevails between access to tenant and landlord information. In the latter case, the authors point out that “comprehensive information on home ownership” is very rare in North America, even though it is fundamental data for the urban planning of cities.
“This study is an opportunity to reflect on the need for accessible and transparent data to understand the rental housing sector. More complete and regularly updated data would make it possible to better protect tenants and plan urban development accordingly,” concludes co-author and professor at McGill University, David Wachsmuth.