Despite the battles with mice and bedbugs, the dilapidated Thorncliffe Park towers overlooking Toronto’s Don Valley have been a haven to Khalil Aldroubi and his wife Samr Chehab Abdulkarim.

They came as refugees to Canada in 2015 from Homs, Syria, one of the cities hardest hit during the Syrian civil war. The couple had witnessed unspeakable atrocities, lived under constant fear of death and fled with nothing. They found housing and, perhaps more importantly, community within the aging highrises at 71, 75 and 79 Thorncliffe Park Rd., an apartment complex home to many new immigrants and refugees. Today, they fear they could soon be priced out of their apartment.

For two years running, their landlord has applied for above-guideline rent increases (AGI) that exceed Ontario’s prescribed yearly guidelines of 1.2 per cent in 2022 and 2.5 per cent in 2023. These requests can be granted for various capital improvements.

The hikes represent a rent increase of 4.2 per cent in 2022 and about five per cent in 2023 (every building at Thorncliffe received a slightly different increase). The increases, which are compounding, are still in limbo, awaiting a decision from the province's Landlord and Tenant Board.

If they are OK’d, tenants will have seen their rents go up by almost 10 per cent in two years and owe back rent due to the increases. For Aldroubi and Abdulkarim, this means their monthly rent could climb from just shy of $1,600 to almost $1,750.

For two years running, Canada's biggest landlord has applied for rent increases that make Khalil Aldroubi and his wife Samr Chehab Abdulkarim worry they will be forced out of their Toronto apartment.

A rent increase notice for a tenant at 79 Thorncliffe Park Dr.

The Thorncliffe Park Drive apartment complex is owned by PSP Investments, a Crown corporation that manages pension fund money for federal employees. PSP invests with Starlight Investments, a massive corporation and Canada’s largest landlord with more than 60,000 units nationwide. According to an internal memo, sent from Starlight to PSP and obtained by Canada’s National Observer, approximately 45 per cent of PSP’s buildings had active AGI applications across Canada in 2022.

Starlight is a private equity company known as a financialized landlord — real estate companies that commodify housing by using it as a “vehicle for wealth and investment,” according to the Office of the United Nations High Commissioner for Human Rights. Instead of managing mutual funds, financialized landlords manage portfolios made up of large numbers of apartment buildings across varied geographical regions.

Starlight and PSP have a very deep and important business relationship. The private equity giant’s connection to PSP goes back to 2007 when the former was called Transglobe. In 2012, Transglobe became Starlight, shortly after a spate of negative media reports decrying horrendous living conditions in some of its buildings. Starlight has celebrated PSP as its “longest standing partner.”

The private equity firm acts on behalf of numerous ownership groups made up of institutional investors, said Danny Roth, a real estate public relations agent acting for Starlight. PSP is one of them and owns a large portfolio of apartment buildings with Starlight. A 2020 list of PSP-owned properties, obtained through a freedom-of-information request, shows how many buildings the Crown corporation controls in the Greater Toronto Area, including those associated with Starlight. Cross-referencing this information with data from RentSafeTO — the city's bylaw enforcement program for apartment buildings, which lists the number of units in each rental property — reveals PSP owns roughly 9,000 units in the area. Overall, Starlight manages more than $25 billion of property assets and real estate investment securities.

A slide from a Starlight presentation for investors that references upticks in immigration, one-person households and unaffordability as drivers of rental demand.

In a 2021 presentation, Starlight told investors its value proposition is based on “high growth” in rents as well as “deteriorating home ownership affordability.” A 2021 report by Policy Options discussing financialized landlords states: “Rents can be increased in a few ways — by charging annual increases to sitting tenants or applying for ‘above guideline’ increases, in which the costs of certain repairs are passed along to residents.” Roth responded by saying Starlight gives careful consideration to all AGI applications within a highly regulated framework.

To Aldroubi, the rent increases seem like greed. “This community is just looking for the end of the month to cover food and everything and that’s it,” he said. Aldroubi believes the building’s owners are looking to profit from the community’s position as a vulnerable population of low-income newcomers who face language barriers. “They try to build their money from our weakness.”

A rent increase notice for a tenant at 75 Thorncliffe Park Dr.

Aldroubi, who lives with a disability and uses a wheelchair, and Abdulkarim spent their first month and a half in Toronto at a shelter at Bathurst and College streets. The medical helicopters that frequently flew overhead terrified the family, provoking flashbacks to the helicopters that used to bomb and machine-gun the populace in Homs, Aldroubi said. Thorncliffe Park has a high Muslim population, and although it wasn’t perfect, moving felt like a kind of homecoming, he explained.

It was also affordable; in 2015, the rent was $1,300 for a three-bedroom unit. Aldroubi is unable to work because of his disability, and Abdulkarim is finishing her high school equivalency. They live frugally on disability payments and child benefits for their two remaining children who still live at home.

Khalil Aldroubi and Samr Chehab Abdulkarim in their apartment. The couple began organizing with fellow residents against rent increases from their landlord and for better maintenance at the beginning of 2022. Photo by Neal Rockwell

But after PSP and Starlight bought the buildings in 2019, they began to renovate units as they were vacated. Now, some three-bedroom units are listed for nearly $3,300 a month. Aldroubi believes the buildings’ owners would like to push out longtime tenants who are paying lower rents and replace them with new people prepared to pay much higher rates.

Canada’s National Observer made multiple attempts to reach PSP and also contacted MP Mona Fortier, who is president of the Treasury Board and oversees PSP. Neither PSP nor Fortier responded to those requests.

The growth of financialized landlords in Canada has been impressive over the past three decades. They have gone from owning zero rentals in 1996 to owning nearly 20 per cent of all apartment rentals today.

The expansion was enabled by the tech industry, which designed algorithms for landlords, said Leilani Farha, former United Nations special rapporteur on adequate housing and the global director of Shift, an Ottawa-based organization working toward the decommodification of housing. By mapping and analyzing vast amounts of real estate data, landlords are able to apply precise risk management projections to guide property acquisitions, she explained.

Farha said financialized landlords buy up housing strictly “as a means of getting a good return on their investment.” This entails raising rents.

Some engage in what Farha called “demographic engineering” where landlords buy modestly priced buildings and either fix up the units and raise rents or tear them down and rebuild. When rents go up, disadvantaged groups are pushed out in favour of a more affluent, less diverse clientele. People with lower incomes are the losers when “housing as we know it, as the everyday person knows it, becomes an instrument of finance, rather than housing as home,” she said.

The exterior of 79 Thorncliffe Park Dr. Photo by Neal Rockwell

On a positive note, Farha says there is growing awareness of the issue of financialized landlords within the federal government and certain provincial governments. For instance, the Federal Housing Advocate is holding hearings into this problem, and in B.C., David Eby’s NDP government has recently announced a $500-million fund for non-profit housing organizations to buy apartment buildings where rents will remain stable. Farha believes that as a gesture, this is an important step, but it will not be adequate to solve the problem in any significant way.

Worldwide, the city that has gone the furthest to combat financialized landlords is Berlin, though with mixed results. In 2020, Berlin passed a law mandating a rent cap, which was then found unconstitutional by the Supreme Court. In September 2021, a strong majority of Berliners voted in a non-binding referendum to expropriate and socialize the properties of any landlord who owns more than 3,000 units, though the municipal government has not yet implemented this proposal.

A damaged wall in a stairwell at 75 Thorncliffe Park Dr. Photo by Neal Rockwell

Tenants fight back

In early 2022, Aldroubi and some of his neighbours organized and started to fight back, demanding their landlord retract the above-guideline rent hikes and address what they describe as ridiculously slow responses to maintenance issues. They believe the actions are a deliberate pressure tactic to push them to move.

Philip Zigman, a housing advocate who co-created a website called RenovictionsTO and works with organizers at Thorncliffe Park, said the tenants have cause for concern. “AGIs (above-guideline increases) should simply not exist because they are a way for highly profitable landlords like Starlight to offload the cost of building maintenance onto tenants.”

Starlight advertises a rent relief program to tenants promising to help with the strain of AGIs and other financial burdens. In an internal memo, the company states that over three years, 20 people in PSP buildings have applied for AGI relief, with all applicants granted reductions. Starlight declined to offer further clarifications to Canada’s National Observer regarding the application process or give insight into why so few people applied for this relief if the program has such a high rate of acceptance.

In March 2022, Thorncliffe Park residents delivered demand letters to Starlight’s Toronto head office. The stack of 62 maintenance letters detailed requests for repairs, some of which tenants claimed had been outstanding for years. They included complaints about chronically leaking bathroom ceilings, mould, malfunctioning kitchen ranges and constantly clogged garbage chutes overflowing with waste. Residents in the two other towers have similar complaints.

A complaint letter from a Thorncliffe Park tenant delivered to Starlight's Toronto head office.

In one letter, a tenant complained they had requested washroom repairs with no success.

“Everything is leaking and it smells very bad... We're very tired of opening many maintenance requests but not getting anything in response,” the tenant wrote.

“We have spent so much money fixing this apartment but there is major things we can't fix. We're tired and I don't think it's fair for the rent to increase when we're not living in a safe and healthy environment.”

In response, Roth told Canada’s National Observer that since purchasing the Thorncliffe properties, Starlight has “resolved nearly 15,000 maintenance requests.”

Later that spring and summer, the tenants staged a neighbourhood march, conducted a phone and email campaign directed at PSP and delivered similar demand letters to the homes of PSP board members and the CEOs of PSP and Starlight.

Tenant organizers from the Thorncliffe Park apartment complex and 130 Gowan Ave. protest outside Starlight CEO Daniel Drimmer's home in October 2022. Photo courtesy of Thorncliffe tenants

Zigman said 650 to 700 households have now signed on to organizing efforts, which in his estimation makes this the largest tenant-led organizing movement in Toronto at the moment.

A complaint letter from a Thorncliffe Park tenant delivered to Starlight's Toronto head office.

A significant issue mentioned by tenants who spoke with Canada’s National Observer was water shutoffs. For much of the past year, there have been one to two water shutoffs per month, they claim. They affect an entire building, tenants say, normally from 9 a.m. to 5 p.m., sometimes going as late as midnight. Each tower has about 300 units, and households tend to be large and include many seniors or people like Aldroubi with disabilities.

The view from Khalil Aldroubi and Samr Chehab Abulkarim's Thorncliffe Park apartment. Photo by Neal Rockwell

The property manager claims the outages are necessary for upkeep, plumbing and connecting appliances in newly renovated suites. Many tenants feel, however, that the length and frequency of water shutoffs are designed more to make life unpleasant for renters so that they will move out. After months of organizing efforts, the shutoffs have now reduced in duration and frequency.

The tenants say since they began organizing, maintenance issues have improved, but they still fear the rent increases. Aldroubi explained that since PSP and Starlight bought the building where he lives, the outside has been spruced up, but little has improved for the tenants. He drew on a Syrian saying to describe this experience: “Outside is shiny like granite, inside is garbage like charcoal.” When asked about his feelings regarding the fact that PSP is a federal corporation, he said: “It’s honestly awful. They don’t care for human beings, they only care for money.”

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New rule: people can only be evicted for non-payment of rent from buildings that are fully up to code and maintained. If you want to be able to evict tenants, keep up your responsibilities to them. It's just wrong that the law will help evict a tenant that owes money, but not help a tenant force repairs that are owed to them, because they have paid rent for a place with working infrastructure.

"Private equity" a euphamism for highway robbery, fraud andlextortion, and the now old fashioned but accurate term asset strippers cannot co-exist with an honest society that acknowledges the right to shelter.
Since our politicians mostly won't acknowledge a "right to shelter" I guess our asset strippers will continue to cause despair, injury and premature death for the majority of the population on the dirty end of the existence scale. More and more our societies begin to resemble the more lurid sci-fi literature.