Climate Groups Say No to Landlord Pushing Decarbonization Costs Onto Tenants

Jul 28, 2023

Climate Groups Say No to Landlord Pushing Decarbonization Costs Onto Tenants

Climate activists joined tenants on Thursday to demand a prominent corporate landlord remove what they say are illegal above-guideline rent increases (AGIs) that the landlord says are necessary retrofitting costs incurred as part of a decarbonization effort. 

The group of more than a dozen representatives from climate organizations, tenant unions and tenants themselves tried delivering an open letter to Michael Cooper, CEO of Dream Unlimited, which owns the buildings at 33 King St. and 22 John St. But they were met by two personnel at the front doors of the corporate offices at 30 Adelaide St. E. instead, including the VP of residential operations, Hero Mohtadi. 

The letter was signed by 18 climate organizations including Climate Justice Toronto, ACORN Tenant Union, and Greenpeace Canada. 

"We must stop the greenwashing of corporate greed, especially as we know that the climate crisis is already impacting the most vulnerable in our society," said Monica Mason, from Climate Justice Toronto, as she read the letter.

“This is part of a bigger picture of the displacement and gentrification of working-class, immigrant and Black neighbourhoods in Toronto where high rates of evictions are occurring due to corporate landlords cashing in on new transit infrastructure (Eglinton Line 5) and demand for housing.”

Tenants from those two buildings, including many of the demonstrators, have been engaged in a rent strike since June 1 and July 1, respectively. They have been fighting some of the highest AGIs in the city, such as the folks at 33 King St. who have seen nearly 10 AGIs in the last five years and over 22 per cent rent increase in the same time. Tenants at 22 John have seen rent increases of 7-10 per cent every year, and sometimes as high as 20 per cent.

Despite these exorbitant rent increases, tenants of the two buildings have also been subjected to poor conditions in the buildings, including faulty elevators, repairs gone undone, and, despite the extreme hot temperatures, they have not been able to use their pool.

Now, said the demonstrators, the landlord is using climate change as an excuse to justify those rent hikes and simultaneously squeeze people out. As proof, they point to Dream's 2022 sustainability report, which states that “expected benefits to result from investing in net zero initiatives” includes  “increase in rents, GHG reductions, returns, and attraction of certain tenants.”

This would allow Dream to qualify for mortgage insurance incentives under a new program called MLI Select, which Dream developed in partnership with the Canada Mortgage and Housing Corporation (CMHC). In fact, it has already secured a $153 million insured loan through TD to help “preserve and increase the number of affordable units from 52 to 189 at the Residence at Weston apartment complex – representing 40 per cent of all units,” according to an April 2022 Businesswire press release.

Purportedly, the program incentivizes home owners and landlords to commit to certain environmental guidelines. “The more committed you are to social and environmental outcomes, the better the incentives,” according to the CMHC website. That includes 30, 50 and 100 points for a 15, 30 or 45 per cent reduction, respectively, of Greenhouse Gas emissions for existing properties.

But demonstrators are calling into question why “Canada’s largest crown corporation (is) using public funds to finance “decarbonization” retrofitting without stipulating that current tenants will not be displaced or face higher rents?” according to the letter.

CityNews reported that Dream had sent them a statement saying the decarbonization and retrofitting of 33 King "has nothing to do with the current AGI applications" and that the work was being "covered at Dream's expense." They added that the AGIs in question were "inherited from the previous owner, and Dream has not applied for any AGIs since we acquired the properties in 2021."

To be sure, the  importance of retrofitting apartments is not under question. According to the demonstrators’ open letter, “in 2020 buildings emissions made up 58 per cent of Toronto’s GHG emissions by sector, and multi-family buildings make up a quarter of total emissions in the GTHA.”

What they do want, says Aatika Moollabhai with Climate Justice Toronto, is for landlords like Dream, which makes 50 per cent profit off rents, to pay their share instead of passing the costs off to low-income tenants.

“It’s important that Dream decarbonizes, but they’re offloading those costs to the tenants,” Moollabhai told the Media Co-op before they delivered the letter.

“Instead of using that profit to put it back into the building, reinvesting, they’re saying… if we want to become 'green,' we have to increase rent. And that’s not fair.”

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