Rents skyrocket for some local geared-to-income tenants

The Sault Ste. Marie Housing Corporation recently approved an increase in market rent values for its 1,249 geared-to-income units in the Sault.

The hike is the first in more than 18 years and the amount varies based on the type of unit, says City Housing Operations Manager Jeff Barban.

The market rent value for single-family detached houses are going up from $849 a month to $1,200 a month.

Townhouses and semi-detached homes will rise to $1,100 a month and single-bedroom apartments will go to $650 a month.

But this doesn't mean tenants will be paying that much, Barban says.

Many tenants of Sault Ste. Marie Housing are confused about notices they recently received in the mail, Barban tells SooToday.com

"We've been getting a lot of calls about this but in fact very few will be affected by it," Barban said. "Only tenants who are currently paying market rent, whose income level increases or who have lost their subsidy will be affected."

Rent for all Sault Ste. Marie Housing units is calculated on a geared-to-income basis.

Tenants are charged 30 percent of their gross monthly income less some rebates for various things such as a portion of their electrical bills, dependent children living in the home and costs to heat the homes, depending on the circumstances, Barban said.

Some units are in privately owned buildings and Sault Housing tops up tenants' rent with a subsidy paid to the landlord to make up the difference between what Housing says the tenant can pay and what the landlord is charging.

Other units are owned outright by Sault Ste. Marie Housing.

The market value of a unit is only the most a tenant will ever pay to live in that unit.

In most cases, market rent also includes heat, water and at least a portion of electricity costs.

It also includes prompt, reliable support and maintenance.

Sault Ste. Marie Housing offers 24-hour emergency assistance.

So if, for example, a furnace won't work on a Sunday evening. all the tenant has to do is call the number and someone will come to fix it within hours.

"That's better service than many tenants can expect from private landlords," Barban said.

It's also more than some people who own their own homes can afford.

The new market rent values of most housing properties are more in line with what tenants would expect from private landlords.

"We did some research," Barban said.

Before going to the Sault Ste. Marie Housing board with a proposal on market value rents, housing staff checked with the local market and with their counterparts in Sudbury.

For most tenants, rent won't change at all.

But for a few it will, massively.

"We have only about 40 of our units that are at market rent right now," said Barban. "The idea is to give more flexibility to those tenants that were right at the border for market rent but weren't truly at market rent."

Some tenants have found themselves earning enough money one month to end up paying market rent, then not enough the next month.

They were bouncing above and below the threshold income for subsidy eligibility from month to month.

That threshold was not very much money in terms of poverty lines and thresholds set by social housing agencies, either.

With market rent set at $849, for example, a family would need to gross about $2,600 in a month to end up paying market rent.

That's a gross income of $31,200 a year for a family of four.

The Social Housing Reform Act provides that, if a tenant in a rent-geared-to-income unit pays market rent for 12 consecutive months, the tenant would lose subsidy and no longer be eligible for the opportunity to reduce their rent if their income is reduced, Barban said.

"At that point the housing corporation has the option, under the, Resident Tenancies Act, to seek eviction if we choose to do so," Barban said. "At the point now, where our market rents are now closer or equal to the market, it's no longer attractive to remain in our units."

For a few that were paying market rent every month, it means they will pay one-third of their gross income again, Barban said, but it means they will remain protected by a rent subsidy that allows their rent to reduce from month to month should their income be reduced.

"If, for example, someone got sick and couldn't work for a few months," Barban said. "Their rent could conceivably go from $950 a month to $89 a month the following month."

Barban said people who can afford to pay $1,200 a month for rent can generally afford to pay a mortgage on a home of their own and would rather invest their money than give it to someone else.

Raising the market rents for Sault Ste. Marie Housing Corporation units gives tenants the option to stay in the units longer if they wish, but makes it less attractive to do so, Barban said.

As for raising the rent $351 with nothing more than 90 days notice, Barban says the housing corporation can do that because it's social housing, not private housing, although that isn't really what it's doing.

"We don't fall under the Tenant Protection Act for rental increases," he said.

Barban is circumspect about the situation.

"We knew it had to be done some time and it isn't going to be good for everyone. But we're hoping it will help more people than it hurts," he said. "For those who qualify for a subsidy, it gives us more flexibility and them more options."

For anyone living in a housing unit who doesn't qualify for a subsidy, it means a very big rent increase on September 1.

People lose subsidy by failing to comply with the terms of their agreement - for example, by failing to continue to provide proof of income if they are close to market rent, Barban said, or they lose subsidy by paying market rent for 12 consecutive months.