By Nick Fonda
Local Journalism Initiative
The apartment blocks being constructed on Richmond’s Adam Street, on the site of what was once a French elementary school, already have their first tenants. According to a rental agent, 11 of the building’s 17 units are now rented. The two other blocks, at different phases of completion, will likely be ready to start housing their first tenants before the end of the calendar year.
Construction work on three more identical blocks is scheduled to start in 2024. These will front on Gouin Street, as St. Michael’s Catholic School once did.
When the project, undertaken by Conception Desrosier, a Magog-based developer, is complete, Richmond will have 102 new rental units.
The apartments, ranging in size from one-bedroom to three-bedroom units, can be visited virtually (www.lardoisier.ca) and can be reserved on-line. They are advertised as having superior soundproofing. Each has its own heat pump, air exchanger, and electrical entrance. Most apartments have a separate small laundry room and a balcony. Some come with two parking spaces.
The promoters point out their proximity, among other things, to the French elementary school, the arena, the bike path, and even the river—which is close as the crow flies but access to it is a little more distant. (The web site shows several appealing photos to illustrate these features, but unfortunately, they are all generic shots rather than photos taken around Richmond.)
It’s likely the units will all be occupied in relatively short order. The construction industry estimates that Quebec currently needs 100,000 units to meet the demand of a growing population. (According to Statistics Canada our population grew by 2.9 per cent between July 2022 and July 2023.) The Canada Mortgage and Housing Corporation, which keeps track of housing availability, notes that the accepted optimal rate of 3% vacancy dropped last year by almost half to 1.7 per cent.
Rents are hard to come by, and the L’Ardoisier apartments in Richmond are pristine units. However, it’s hard to say how many of the 102 apartments will do much to ease Richmond’s need for affordable housing. The new apartments range in price from $815 to $1,590/month.
If the old rule of thumb that housing shouldn’t equal more than one third of household income still holds, the family renting a three-bedroom apartment would require a monthly income of $4,770, or almost $60 000/year.
“It’s more than I could afford,” says Gilles Dancause who lives with his son and daughter in a three-bedroom apartment that costs $680/month to rent. Because of a workplace accident more than a decade ago, Gille’s rent check has to come out of a disability pension.
“In fact,” he explains, “I couldn’t afford this apartment if it weren’t for a provincial government program designed to help people, whether they are working or not, who have limited incomes. I get a subsidy of $150/month to defray the cost of my rent. The maximum subsidy is $175.”
With both children at an age when they’re not far from leaving the family nest to live on their own, Gilles has been keeping an eye on Richmond’s rental market.
“My kids are happy here at home,” he says, “but I know that sooner or later they’ll want a place of their own. Apartments in town have become expensive. They’re hard to find, and when they come available, they’re snapped up right away. I noticed a studio apartment for rent quite recently and out of curiosity, I inquired about it. The rent was $375/month, and the next day it was already rented. This was for a very modest space in an old building.”
He continues, “I’ve noticed on Facebook that there are a lot of people who are looking to rent here in Richmond. There were a lot of postings to that effect this summer, and normally there are also a lot of postings between January and March, when people are deciding whether or not to extend their lease.”
“Richmond is conveniently located,” Gilles says. “It’s half an hour’s drive from Sherbrooke, Valcourt, and Drummondville, and not that much further from Victoriaville. It’s been the case for a long time that couples will buy a house in Richmond because it provides a short commute for both of them even if one works in Sherbrooke and the other in Drummondville. What was true for homebuyers has become true for renters. For a couple with a good-paying jobs, the new apartments are definitely an attractive option.”
The new apartment blocks might also be an attractive option for investors, if their pockets are sufficiently deep. The 17-unit blocks cost about $4M each. Fully rented, a block would generate a little over $280,000 in annual income and pay for itself in about 15 years.
“It could be quite a sweet investment,” says Gilles, who invested in property in the past. “As these are new buildings, I believe they are exempt from the regular rental board guidelines on rent hikes, normally no more than a few percentage points per year. If the rental market remains tight, an ambitious landlord might raise his rent by five or six percent each of those first four years and he’ll get his investment back in just over a decade.”
It’s difficult to imagine that rents will become affordable in the immediate future. Landlords who own old buildings will, at best, hold rents at their present level. More likely, they’ll raise the rent according to Quebec’s 2023 housing tribunal recommendations of 2.3 per cent for leases that don’t include heating. That recommendation soars to 7.3 per cent for apartments heated by the landlord if the heating system is oil based.
“It can get worse,” Gilles Dancause points out. “Landlords, looking for bigger profits, undertake renovictions—they evict the tenants, often ones who have been there a long time and pay a low rent, carry out some renovations, and then lease the remodeled apartments at much higher rates.”
“The high demand for rents is also being affected by the fact that even in small towns like Richmond, the demographic is changing,” he continues. “Immigrants are not just moving into big cities. It has always been the case that every year there are a few new faces in town. Recently, some of those faces are from Africa, from the Philippines, and from Central America. One of the places you see that is at the Catholic mass on Sunday morning, where the congregation has started growing for the first time in decades.”
It’s still the case that housing—for homebuyers as for renters—is less expensive in small towns like Richmond than it is in larger centers like Sherbrooke, but the gap is not as great as it once was. L’Ardoisier will likely be an economic success for the developer and for the entrepreneurs who eventually buy the apartment blocks, but it will do little to make housing more affordable in a town which continues to be economically depressed.
