Senior citizens living at Pioneer Cottages on 10th Avenue have recently been hit with an unexpected $100 rent increase. The increase comes into effect on January 1, but many tenants have no intention of paying the additional fee.
On Sept. 29, president of the Alberni Valley Senior Citizens Homes Society, Ernie Bigelow, received a letter from city hall regarding the status of the permissive tax exemption for the two properties owned by the society. It stated that Pioneer Towers would remain exempt of taxes, but because the cottages were rebuilt five years ago after demolition of the former residences on the property, they no longer qualify for the exemption. The previous facility was covered under the provincially funded statutory exemption for non-profit seniors’ housing from 1947 to 1974.
The city discovered after a review of its permissive tax exemptions that it erred in allowing the exemption for five years after the new cottages were constructed.
Now Bigelow faces a $40,000 tax bill. His solution is to increase rent to generate funds in order to meet the payment.
“It came out of the blue,” Bigelow said. “We’ve never paid taxes. We have been totally exempt.”
He has until July 1 to pay the bill and said a rent increase was his only option.
“What alternative is there?” he asked. “There is no easy answer. We are a non-profit.”
Bigelow said the tenants agreed at a meeting on Sept. 30 to pass a motion to increase the rent to help level some of the costs.
Resident Glad Doyle was not prepared for the rate increase.
“We were told that in order to meet the $40,000 in taxes, which is partly provincial, (Bigelow) would be raising the rent by $100,” Doyle said. “We asked about the contingency fund but were told that would be spent on breakdowns and repairs that might be needed at the Towers.
“Those are ‘ifs’ and this is a definite, so the money should be used now and save for ‘ifs’ later.”
Bigelow said the contingency fund is not for rent.
It is instead to be used for capital repairs and maintenance of the facilities.
On Oct. 1, tenants received notice of the rent increase on AVSCHS letterhead. Doyle said she has two main grievances.
Legally, the notice must be given to tenants on official forms acquired by the Residential Tenancy Branch. It would then be reviewed and a date set.
“None of that has been done,” Doyle said.
Bigelow said he did not use the official forms because the motion was passed by tenants to accept the $100 increase.
Bigelow advised tenants that the rent would go up from $550 per month to $650 per month, an increase of 20 per cent. Under the provincial law, the standard allowable rent increase for residential tenancies for 2016 is 2.9 per cent.
“We are not going to pay (the extra) because it has been done illegally,” Doyle said. “Many of us would be forced to cut back if our rent went up that much.”
Patty Edwards, on behalf of MLA Scott Fraser, met with both Bigelow and the group of tenants.
“We had people calling (Fraser’s) office,” Edwards said. “Some were concerned children of the tenants, so I got involved to make sure the Residential Tenancy Act was being followed properly.”
Edwards said she offered to help Bigelow look into alternative funds or public fundraising to help with his payment.
“He hasn’t contacted me in those regards,” she said. “Maybe some large company would be willing to make a donation to the non-profit board of directors for an income tax deductible receipt.”
“(Edwards) has this pie-in-the-sky idea that the rich will pay (the tenant’s) rent,” Bigelow said.
“Some of the tenants are nervous about not paying,” Edwards said. “I told them it is not a legal notice so they don’t have to, but they are afraid they will be penalized and possibly have to look for other, substandard housing. They are confused because the board is telling them one thing and I am saying another.”
Edwards said the property needs to be protected because it is one of few quality seniors housing but passing the increase onto tenants is not fair.
“This is good housing for seniors and needs to be maintained, but not at the cost of the senior citizens,” she said.
In mid-December, tenants were invited for the first time to the board meeting on Dec. 21 when the rent increase will be discussed in detail.
“We’ll see what we can do then,” Bigelow said.