This page takes a closer look at the landlords renovicting tenants and applying for above guideline rent increases in Toronto. It will evolve as we have more data to share about the landlords engaged in these practices, the individuals behind the companies, and any connections or other information that may be useful for tenants. For now, we’re highlighting the landlords who love to apply for AGIs.
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AGIs allow landlords to transfer the costs of certain repairs onto tenants. Landlords who allow buildings to fall into disrepair and routinely ignore tenants’ requests for maintenance may be granted AGIs for expensive work that isn’t even necessary and that tenants don’t want. The loophole allows landlords to increase their profits dramatically while squeezing tenants and displacing those unable to afford the increased rent. Corporate landlords, asset management companies, and real estate investment trusts (REITs) in particular use AGIs as part of a strategy of displacing tenants and exploiting vacancy decontrol, increasing the value of the buildings along the way with new balconies and lobbies.
Landlords can apply for AGIs regardless of their existing profits, belying the notion that tenants are being asked to make up some sort of loss incurred by the work undertaken. As revealed below, landlords applying for AGIs typically make more than enough to allow them to invest in the proper, long-term maintenance of buildings.
Although Akelius has only applied for two AGIs in Toronto since 2018, we thought they deserved some recognition for the 24 others they applied for since 2012 and because the UN Special Rapporteur on the right to housing recently called them out for abusing tenants’ human rights.
According to the Special Rapporteur, Akelius’ drive to maximize profits means they let their buildings fall into disrepair while simultaneously undertaking needless renovations to circumvent rent control and dramatically increase rents. While this isn’t news to Akelius’ tenants, what’s notable is that Akelius employs the same playbook as many other landlords, so if Akelius is violating rights they’re hardly alone in doing so.
Starlight is the runaway king of AGIs, accounting for approximately 11% of all AGIs in Toronto since 2018. A privately held real estate investment and asset management company, Starlight manages $14 billion in assets for various institutional and private investors through a variety of investment vehicles. For the most part Starlight is in the business of acquiring already built residential rental buildings, but when it does get involved in development the company benefits from generous government financial support. The investment community is familiar with their business model and raised concerns about “predatory strategies” prior to the vote on its acquisition of Northview REIT. In May 2020, Northview REIT’s owners voted to approve the acquisition of the REIT by Starlight and KingSett Capital for $36.25 per unit of the REIT; Starlight CEO and President Daniel Drimmer happens to own or control about 9 million of such units.
CAPREIT is a Canadian REIT that owns over 23,000 suites in Ontario. Not familiar with REITs? Landlords of Toronto has put together a short intro, but REITs basically allow investors to buy shares of a fund that's managed by an operator like CAPREIT, then make profits from tenant rents. REITs are key drivers of the financialization of housing and have accounted for a larger and larger percentage of rental housing stock over the past 20 years, mainly through the acquisition of existing apartment buildings. 2019 was another record year for CAPREIT, with revenues of $778 million and profits of $508 million. CAPREIT's stated objectives are to maximize earnings and provide investors with monthly returns and, as they note in their annual report, AGIs and turnover help them increase the average monthly rent of their portfolio. Meanwhile, management’s pursuit of AGIs appears to be driven by whether the increases are supported by the market rather than the actual need for capital repairs.
Find a list of CAPREIT’s buildings here
Realstar is a privately owned real estate investment and asset management company that owns and operates more than 25,000 rental units in Canada. The company is involved in joint ventures with pension funds and other institutional investors, and also operates a number of investment partnerships with Canadian pension funds. This dynamic means that older tenants on a fixed income in the form of a pension who are unable to afford an AGI could possibly be displaced by their very own pension fund.
Find a list of Realstar’s buildings here
An integrated asset and property management company, Centurion manages a private REIT with profit margins similar to CAPREIT's. Centurion's investors received profits of around 10% per year through the 2010s. As their pitch to investors highlights, REITs are a safe investment offering monthly income and a low tax burden, thanks to the favourable treatment REITs are granted by our tax code. Centurion is able to deliver such returns by closing gaps “between potential market rents and current in place rents” through turnover and displacement and by applying for AGIs “wherever possible,” as well as by charging tenants for previously included services.
Find a list of Centurion’s buildings here
Medallion is a privately owned real estate and property management company based in Toronto.
Homestead owns and manages over 27,000 apartments in Ontario. A privately owned company, Homestead has mostly grown through the acquisition of existing rental buildings.
Find a list of Homestead’s buildings here
Providing investment management for British Columbia’s public sector, bcIMC mostly manages public sector pension funds. Approximately $17 billion of the fund’s assets are in Canadian real estate, and they own and manage more than 10,000 apartments through QuadReal, which bcIMC created in 2016. bcIMC’s domestic real estate portfolio provides investors with generous yearly returns of several percentage points.
Find a list of bcIMC’s buildings here
Hollyburn is a privately owned company that owns and operates over 5,700 apartments in Vancouver, Calgary, Ottawa, and Toronto. While Hollyburn’s Director urged the city of Vancouver to reject true rent control in 2018 out of an alleged concern for the affordability of housing, seniors living in one of their Toronto buildings fear an AGI will render their homes unaffordable, leading to homelessness.
Find a list of Hollyburn’s buildings here
M&R Holdings is a privately owned development and property management company based in Toronto.
Find a list of M&R Holdings’ buildings here
Timbercreek is a real estate investment and asset management company that owns and operates more than 18,000 apartments across the country. Like many others professing expertise when it comes to the supply of rental housing, Timbercreek has grown its portfolio of apartments largely through the acquisition of already existing apartment buildings. Timbercreek offers investors a variety of funds that provide steady income streams, with returns that often eclipse 10%, a trend they expect will continue. As Martine August documents, like with other financialized landlords, “Timbercreek’s profits are linked to displacement” and the exploitation of vacancy decontrol.
Note: The above list covers the period from January 2018 to March 2020. A single AGI application can include multiple buildings, however we’ve counted the number of buildings for which a landlord has applied for an AGI. When the same building has been the subject of two AGI applications by the landlord during this period we’ve counted these separately.