On Nov. 15, 2022, Union Co-operative announced the purchase of two apartment buildings as its first investment in creating new community-owned housing.
The apartment buildings at 475-477 Lancaster St. W. in Kitchener include 58 two-bedroom apartments.
As part of Union Co-operative’s commitment to creating sustainable, affordable housing, Sean Campbell, their executive director, said any rent increases will not exceed the provincial rent guidelines.
Union Co-operative’s mission is to create affordable housing by purchasing existing properties and converting them to a community-owned model rather than landlord-owned.
Members can invest up to $10,000 and receive dividends. The co-op has over 200 members who have contributed to the investment in the apartment buildings.
Campbell said the buildings are a much more significant investment than they envisioned when starting the co-op.
Initially, the co-op board planned on finding a building with ground-floor retail and two second-floor residential units.
“As we grew and developed as an organization, our ambitions grew along with that,” Campbell said.
The property was listed for sale in January 2022, and the co-op board worked quickly to put together their offer.
The average monthly rent is under $1,400, with a few units under $1,000 per month.
Campbell said Union Co-operative committed to keeping rent affordable as part of the mortgage application with the Canada Mortgage and Housing Corporation (CMHC). They will keep rent increases at the provincial guidelines for 60 per cent of the units below $1,425 for the next twenty years.
“Annually, that may go up by one or two per cent. The important thing is, even if a unit is vacant, we’re not going to just jack up the rent. We’re committing to maintaining that affordability,” he said.
“It does mean then that there’s also some units that we can have at a little bit higher rent to make sure that we’re bringing enough funds to take care of the property as well,” Campbell said.
Partnering with other community organizations is also a core part of Union Co-operative’s mission. Campbell said one of the existing units is set to become available soon.
They are working with Women’s Crisis Services of Waterloo Region to make it available for a family in their shelter who needs a safe and affordable long-term home.
Union Co-operative’s purchase offer was accepted in October and Campbell said the first step was to ensure the tenants understood that there were no immediate changes to the rent or the units.
The tenants will be invited to join Union Co-operative as members at no additional cost.
Campbell said joining the co-op will make them owners of the building and provide them opportunities to contribute to the decision-making process.
“Unlike a lot of big landlords, we’re not looking to push anyone out. Their home is safe. There’s no renovictions. There’s no above provincial guideline rent increases. Those are all immediate commitments to the tenants,” Campbell said.
The tenants have received a survey to identify areas of the building and its grounds that need improvement. Campbell said that the co-op and tenants will meet in January to review the survey results and discuss the next steps.
One change already in planning is the conversion of an existing parking garage in one of the buildings into two new two-bedroom units. The same apartment conversion work was previously completed in the other building on the property.
“These are the exact types of units that are being targeted by big investors because you can quickly drive up the rent. We can build as many affordable units as we’d like, but if we keep losing these existing affordable, low rent units, we will never catch up,” Campbell said.
Alex Kinsella is a freelance content marketer and writer based in Waterloo Region, Ontario. He's behind the TL;WR newsletter–Waterloo Region's weekly events newsletter. He's worked with some of Canada's most well known tech companies in roles including customer success, development, product management, PR, social media and marketing. Alex has contributed to publications including BetaKit, Grand Magazine and more.