Anxious Lions Place tenants, who’ve known for weeks that their non-profit apartment complex was being sold to a Calgary real estate investment firm, got the news they’ve been dreading Wednesday.

The letters they received from MainStreet Equity did nothing to soothe nerves frayed by fears of rent increases and the spectre of finding somewhere else to live after the takeover and renovations expected to follow shortly after.

“There was an aura of anguish, excitement and concern,” said Gerald Brown, who got his letter after attending the 287-unit complex’s annual memorial service for residents lost during the past year.

MainStreet Equity invited them to a residents-only meeting Thursday morning to answer questions about how the handover from a registered charity to a for-profit company will impact them and the amenities at their home.

“We’re known for our quality and affordability, and we are looking forward to serving you,” the letter said.

MainStreet Equity and other, similar companies are known for buying distressed buildings, renovating them and jacking up rents.

Brown said residents are especially concerned after seeing what happened to the former Manitoba Housing-operated low-income apartment building at 185 Smith St.

A broken pipe that flooded the basement and damaged plumbing and elevators forced the evacuation of nearly 200 tenants in 2015. Three years later, the province sold the vacant, unrepaired building to a private company that undertook extensive renovations and began leasing Smith Street Lofts luxury units.

After initial rent “discounts” for new tenants, the owners recently applied to the Residential Tenancies Branch for a 118 per cent rent increase.

“Is that us next?” asked Brown, who chairs the Lions Place residents’ seniors action committee. The residents worry they’ll be priced out of their homes in two years, once Families Minister Rochelle Squires’ promised rent freeze for current Lions Place tenants expires.

Squires last month announced a fund to cover any increases over the next two years while a new provincial non-profit funding model is being developed.

“Everybody is asking, ‘What happens to me after two years?’” Brown said. “That’s a serious question that we won’t know the answer to for a while.”

The residents also received a letter Wednesday from Lions Housing Centres Inc. announcing the building was under new ownership without identifying MainStreet Equity.

The charity said programs that support the residents will continue “for as long as possible.”

Brown said they’ve been told 24-7 security at the 610 Portage Ave. complex will remain in place.

Lions Housing Centres decided to sell the building, which needs millions of dollars in repairs, after its funding agreement with the province expired and wasn’t renewed in 2018.

The block was built with Canada Mortgage and Housing Corp. financing to provide affordable housing to seniors. Lions Housing Centres, which had paid off the $13.5 million mortgage, put the building up for sale to help fund the charity’s other non-profit housing complexes. MainStreet reportedly paid $24,050,000.

News of the potential sale to a publicly traded company outraged affordable-housing advocates, who urged government to intervene and prevent the loss of much-needed non-profit homes.

The Canadian Centre for Policy Alternatives warned that the “financialization of housing” is wiping out affordable rental units and widening the gap in income inequality.

MainStreet Equity went public on the Toronto Stock Exchange in 2000 with just 272 units valued at $17 million. In 2022, it had 16,000 units worth more than $3 billion.

The company website says it targets buildings that are “often mismanaged and in poor condition, needing substantial renovations to bring them to market standards. The rents in these buildings are generally below market, which tends to attract tenants with weak credit… (that) can create a downward spiral effect” on the buildings.

It says it uses federal government-insured mortgages to grow its business.

“After renovation, suites are re-positioned in the market at higher rents. With the increase in rental income and reduction in vacancy and operating costs, cash flow increases significantly. That presents an opportunity for us to refinance the property with higher principal under long-term, Canada Mortgage Housing Corporation insured mortgages, typically resulting in the recovery of the entire capital expense and original equity investment. The funds raised through refinancing are used to acquire further under-performing assets, resulting in the continuous cycle of the MainStreet Value Chain.”

carol.sanders@freepress.mb.ca

Carol Sanders
Legislature reporter

After 20 years of reporting on the growing diversity of people calling Manitoba home, Carol moved to the legislature bureau in early 2020.

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