With homeless encampments springing up all over Hamilton, and the LRT project set to displace more low-income tenants along its route comes a hard lesson for Hamilton City Council. Unless its specifically written into the deal, you can’t change development incentive programs in mid-stream. Such was the case Wednesday when less than a week after the General Issues Committee voted to deny the developer Malleum $169,000 in tax increment grants, Council overturned that decision after more than an hour huddled in camera with staff and lawyers.
GIC had voted to deny the grant because of complaints that Malleum had “reno-victed” dozens of tenants from the properties it has purchased along the LRT route. Specifically Malleum had purchased a walk-up complex at 540 King Street East, where apartments had been renting in the $800 range per month, renovated the units and put them back on the market for rents in the $1600 per month range.
The original staff report recommending the payment outlined the dilemma for staff. “Staff are not in a position to independently verify any of the disputing claims made as this would require the exploration of historical claims and facts, and ultimately require determinations of right or wrong, that should be made under the Province’s jurisdiction in a formal tribunal setting via the Landlord and Tenant Board (LTB). As such, staff are recommending that the Hamilton Tax Increment Grant Application in respect of renovations undertaken at the property located at 540 King Street East, Hamilton be approved as the Application has met all applicable HTIG Program terms.”
The existing city program that provides the tax incentives was designed to encourage development in the city core which had been neglected for decades. An unintended consequence has been the displacement of low-income tenants at a time of booming housing and rental coats. The current program contains no language dealing in renovictions, but there will be pressure on staff to modify the program.
The decision to reinstate the grant comes just as council has voted to get tough on the tent encampments.