News  Plateau property values skyrocket

Taxes and rent expected to follow suit

Montreal’s 2011 property evaluations are in, and the results are likely to leave a lump in the throat of some students. For residents of the Plateau-Mont-Royal borough, the average property value predictions tabled by the City of Montreal’s Assessment Office increased by 34.7 per cent. This is the highest increase among Montreal’s 19 boroughs.

Patricia Lowe, a representative for the Assessment Office, explained that the evaluations are based on a number of factors. Assessors examine deeds of sale and track renovation permits and major development projects in order to determine the market value of the properties. In all 23,778 commercial, residential, institutional properties were considered in the Plateau-Mont-Royal, adding up to a total value of $13.2 billion. The new assessment roll is based on 2009 tallies.

Montreal’s property value increases should not come as a surprise, according to Lowe. The city’s last assessment roll, which was released in 2007, “went up much more for residential properties compared to the 2004 roll.”

“The reason for that was because Montreal property values had fallen behind those in other cities. The prosperity started to come back to Montreal [and] the property value started to rise,” she added.

Lowe says even if tax hikes don’t accompany the leap in property values, Plateau residents and landlords will be paying more in the near future.

“The budget determines the tax rate,” Lowe said, “and the budget won’t be presented until the end of November.” But she specified that “if the value of your property goes up, then even if the tax rate stays exactly the same you will have some increase to absorb.”

Based on the property value increase, and taking into account normal inflation, residents of the Plateau will most likely witness an increase in rent and property taxes. In the residential sectors of the Plateau, values are up by 35.6 per cent compared with a 32.3 per cent increase in non-residential markets.

The spike does not put Montreal on par with other big Canadian cities just yet though, Lowe emphasized. “Property values are still lower in comparison than Toronto, Vancouver, other large metropolitan centers,” she said.

Ali Farasat owns and operates a number of residential properties in the Plateau-Mont-Royal and his principal tenants are students.

“Taxes are going to go higher so owners are going to share part of the cost,” Farasat explained. The remaining share of the burden will of course fall on the tenants of the properties.

“I don’t expect the rent to go up by exorbitant amounts,” said Farasat, “but I do expect the rent to maybe go up more than previous years. If [property tax] increases by anything more than 10-15 per cent then definitely you’re going to see an impact on the tenants and on the landlords.”

When asked whether City Hall had any concerns over forcing low-income families and students from the neighbourhood, Lowe responded, “The city worries about that yes, and that’s why they try to be as fair as they can with taxes and with programs to help people buy affordable housing and to stay in the city.”

Farasat doesn’t find the efforts by the city to be self-evident. When asked if he felt a tax increase would be justified, he replied, “I don’t think so, especially looking at the Plateau over the past three years. You see that [on] St. Laurent there is a lot less business, the streets are less clean. The Plateau is still happening, it’s probably one of the best neighbourhoods of Montreal, but you just don’t see where all this money goes.”

Farasat said students and other residents are more likely to bear the burden of rent and tax increases than abandon the neighbourhood.

“I don’t know, because it’s so close to McGill,” said Farasat. “I don’t think you find this type of atmosphere in any other area. I feel like the city knows that and they’re using it to their advantage. The city needs to do their part – if they’re going to increase taxes there has to be some benefit for the residents.”

“There’s no parks being built, there’s no [additional] parking,” he continued. “I don’t see any improvements in the Plateau.”

Lily Hassall, a U1 McGill student who lives on DuBullion near Duluth, said she would move out of the Plateau if rent went up significantly. “I love living in the Plateau,” she said. “It’s a great neighbourhood. But part of its charm is that it’s affordable.”