non-profit and co-op housing directors seek clarity on quebec law lowering valuations
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"i would like to be able to shout it loud and clear that it's such good news and spread it on social media," says patrick préville, executive director of the fédération de l'habitation coopérative du québec (fhcq). "but we can't make an announcement with this because we have too many questions still."
photo: fhcq
a new bill passed by the national assembly might provide some desperately needed property tax relief to non-profit housing boards and housing co-operatives across quebec. they’re just not sure yet if the legislation is the answer to their hopes because its wording is unclear.
“i would like to be able to shout it loud and clear that it’s such good news and spread it on social media,” patrick préville, executive director of the fédération de l’habitation coopérative du québec (fhcq), said of bill 104, which was passed in november.
préville’s federation, which has been asking for tax relief for a decade, represents 480 non-profit housing co-operatives in the province, most of them in montreal.
“but we can’t make an announcement with this because we have too many questions still.”
bill 104 is an omnibus bill that includes a new method municipalities can start to use in 2027 to assess the value of buildings that contain low-rent and affordable housing. municipal tax bills are charged on assessed property values.
the new method in bill 104 factors a building’s low rents into its assessment. it represents a big change for housing co-ops and non-profit housing buildings because they’re currently assessed according to market rents in the speculative real estate market surrounding them, even though they can’t be sold for profit or have their rents jacked up, and many of them have an explicit mission to serve a low-income clientele. so the new assessment method taking into account actual rents in non-profit buildings would presumably lead to lower assessments and lower municipal property tax bills.
however, the hiccup is over the wording in the legislation. bill 104 says the new method applies to buildings charging subsidized rents or “modest” rents. the term “modest” isn’t defined and it’s unclear whether it would encompass all non-profit housing co-operatives and non-profit housing buildings, which typically charge below-market rents.
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a co-operative is governed by the building’s tenants, who collectively own the building. a non-profit housing building is owned by a non-profit corporation and managed by a board of directors that may include tenants and members of the community.
the introduction to bill 104 refers to social and “affordable” housing, which are also ambiguous terms, préville said.
“we need clarifications,” he said, adding that his federation is waiting for answers from the quebec municipal affairs department. what one municipality defines as “modest” rent might differ from another municipality’s definition, préville said.
the wording of bill 104 also appears to make it optional for municipalities to adopt the new assessment method for non-profit housing, rather than obligatory — but it’s not clear, he said.
the stakes are high, préville said, because as much as 30 per cent of a housing co-op’s operating budget goes to pay municipal property taxes.
“big amounts of money could be saved to spend on other things, like maintaining buildings, building improvements and developing more units,” he said, if non-profits’ property tax bills were to decrease because of the new assessment method.
the municipalities themselves seem to be unclear about the application of bill 104.
the city of montreal is waiting for the municipal affairs department to produce a reference guide on establishing the value of buildings containing social or affordable housing according to the new method in bill 104, city spokesperson gonzalo nunez said.
montreal can’t confirm yet whether it will apply the new assessment method on its territory, he said.
“until the reference guide on establishing the value of buildings containing social or affordable housing from the ministry of municipal affairs and housing is available, we cannot answer this question,” nunez said.
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the municipal affairs department hadn’t responded to the gazette’s questions as of thursday.
montreal’s current three-year assessment roll took effect on jan. 1. so the new assessment method prescribed in bill 104 could only be used to establish the next three-year roll, which takes effect on jan. 1, 2029.
in the meantime, montreal is continuing a legal battle against a non-profit housing organization in plateau-mont-royal that won a partial victory in quebec court in 2024 to lower its municipal property assessment because of its social mission to house poor and vulnerable people at low rents.
the quebec court judge had agreed with the yellow door housing corp. in milton park that the private member’s bill that created the milton park community in 1987 and the co-ownership agreement between milton park’s non-profits should affect yellow door’s municipal property assessment, since they prevent property in the community from being sold for market value and require any buyer to commit to first offering units to low-income people.
the city opted to appeal the quebec court ruling rather than lower yellow door’s assessment and its property tax bill.
the case was argued in quebec superior court last week, with julius grey representing yellow door. the judge is expected to render a decision in the coming months.
“the purpose is to provide housing to people on low incomes, and there are limitations on how much you can charge,” grey said of yellow door following the hearing. “so it’s totally artificial, in my view, to argue that it doesn’t affect value.”
nunez said the city won’t comment on the case because it’s before the courts.
the city’s lawyers had argued that the private law passed by the national assembly to create milton park community should be considered as a contract created by the community, and that a building owner like yellow door cannot lower building value by its own hand.
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however, grey countered, “a law is a law is a law, whether it’s private or public, and it should be taken into account.”
as the gazette reported in the past, non-profit housing is tax-exempt in several cities in canada.
non-profits in quebec have never asked to be completely exempted, préville said, noting that municipalities are dependent on property tax as their main source of revenue.
but assessing the value of non-profit housing as though the building could be sold for profit and municipal tax increases could be passed on to low-income tenants is unfair, he said.
“it’s not a question of paying zero dollars,” préville said. “it’s a question of paying their fair share.”
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