Residents at Pioneer Cottages have been given five days to consider another voluntary rent increase to pay their property tax bill or the cottages will be put up for sale.
The Alberni Valley Senior Citizens Home Society handed out financial packages at a meeting Wednesday for residents of the 41 cottages that are part of the Pioneer Tower and Cottages at Wallace Street and 10th Avenue. The society is asking residents to accept a voluntary $159.05 increase per month, which would raise rent to $725 per month. The society needs 100 per cent buy-in from residents in order for the increase to pass.
This is the second time residents of the cottages have been asked to pay more than $100 per month increase in rent to pay a property tax bill. In September 2015 the society was informed that the cottages no longer qualify for a permissive tax exemption after they were torn down and rebuilt in 2010 and that the society owed $40,000 for the 41 cottages.
When the cottages were originally built, they were done so with provincial funding and were called ‘assisted living’ units. When they were rebuilt, they were done with private money and qualifications changed to seniors’ housing for people 55 and older, city seniors’ advocate Denis Sauve said after the meeting. This meant the cottages were no longer eligible for the tax exemption, and that someone missed this information.
The oversight only came to light when BC Assessment asked the City of Port Alberni to conduct an audit of properties receiving tax exemptions.
After a dispute in November over the rental increase, which former society president Ernie Bigelow had done without consulting the provincial Residential Tenancy Branch, residents received a 2.9 per cent increase, or about $16 per month, which kicked in April 1, 2016.
The increase is provincially mandated each year; a landlord can apply to the Residential Tenancy Branch to ask for a larger increase. The board has not gone through residential tenancy for this latest increase, board member Leslie Walerius said, choosing to ask for a voluntary rental increase instead.
“Our sole source of revenue is the rents we receive,” society president George Rogers said Wednesday. Rogers said the board is facing three options when it comes to the cottages: receiving tax relief from the city or the provincial government, approval of the rental increase or putting the cottages up for sale.
“Selling the cottages would be a last resort,” he told residents.
Two real estate companies—ReMax and Royal LePage—have already been contacted and residents were given a notice of entry that realtors might be coming to inspect their cottages within the next 30 days.
Rogers said if residents accepted the increase then the need for realtors “would go away.”
News of the $159 per month rent increase proposal was met with skepticism from residents and their representatives at the meeting. At one point, tempers flared over an exchange with Rogers, and a couple of residents walked out of the meeting.
Rogers handed the cottages’ tax bill to city council during a meeting in June. He told residents on Wednesday the board is already behind in collecting $40,000 for the 2017 tax bill.
Accountant David Oscienny, who was asked to put together a report on the cottages’ finances and what a capital replacement reserve fund would look like, said although the board isn’t legally compelled to create a reserve fund, best practices call for it. And previous boards had not set anything up to provide for the cottages’ future upkeep, Oscienny said.
He explained the rental increase would not only pay for property taxes each year but it would start a capital replacement reserve fund for things like appliance replacement, repairs and roof replacement in the next decade.
“There is no quick fix,” board member Gay Allen said. “If we don’t get the agreement of tenants of the cottages for the increase, we will be forced to sell the cottages.”
Any grants the board could apply for cannot be used to pay property taxes, and most are one-time grants for capital projects such as roof replacement.
Residents have until July 25 to decide if they will accept the voluntary rental increase.
Resident Cecile Douglas said she was disappointed at the meeting’s outcome.
“I would pay $100 (rent increase). We just had a 2.9 per cent increase,” she said, and the board indicated they would raise rents again at the beginning of 2018, albeit only to the percentage set by the province.
Douglas said if the rent increase of $159 per month goes through, she would consider moving elsewhere.