Landlord converting more than 120 Halifax apartments into condos

Two apartment buildings in Halifax's north end with more than 120 units between them are being converted into condominiums, and the owners say it's because operating the properties as rentals has become financially impracticable.

Many tenants of the two four-storey buildings on Mont Blanc Terrace started to hear rumblings about the conversion last fall. Some have already moved out or are making arrangements to leave. Others, like Andrew Macdonald, aren't ready to go.

"This puts me into a bit of a conundrum 'cause I don't know what's gonna happen next," said Macdonald in an interview.

He said he's been in unstable housing for years, and just prior moving into his current apartment, he was living in his car. The news that he will have to move again is a blow.

"Part of me wants to throw my arms up in exasperation and actually get on an airplane and go to someplace like Thailand or the Philippines where I can live off of what savings I've got and maybe teach English," he said.

Following Nova Scotia law, the owners of the two buildings have given tenants until the end of September to stake a claim on buying their own unit. Otherwise, they have to move out by Aug. 29, 2026.

Macdonald said he's not in a financial position to buy.

One of his neighbours, Jon Frost, said he's simply not interested in buying. He doesn't think the units are as valuable as the owners do.

Frost accepted a letter from his landlord earlier this month, sent by registered mail, confirming the rumours that began swirling months ago. It explains the rationale for the conversion and what rights the tenants have, including the right to buy.

The letter doesn't provide exact prices, but it says listings will "reflect normal market conditions." It says average condo prices in the neighbourhood are $400 to $600 per square foot, putting the buildings' units — which range from about 1,000 to about 1,500 square feet — anywhere from about $400,000 to about $900,000.

"We're just going to ride it out and see what happens," Frost said in an interview outside the building he, his wife and son have called home for close to 20 years.

He said he isn't worried for his own family, but some of his neighbours are in a panic and he understands why. Rental vacancy improved in Halifax last year — it rose from one per cent to two per cent — but experts say a healthy vacancy rate is in the range of three to five per cent. The market is still tight for renters.

'There is no way we can pay,' say landlords

However, the owners of the Mont Blanc apartments say the situation isn't favourable for them, either.

The buildings are owned by GBRF Properties, whose directors are Peter Polley, the president of development group Polycorp, and Robert Richardson, the executive vice-president of rental giant Killam Apartment REIT.

GBRF Properties built the apartments about 20 years ago. According to the notice sent to tenants, the company had intended to keep the buildings and operate them as rentals "forever." But, the letter continues, operating costs have ballooned in the intervening decades, while rent increases — which have been capped since 2020 — have failed to keep pace.

CBC News asked Polley and Richardson for interviews. Polley responded with a written statement, which includes the same rationale that's outlined in the letter that tenants received.

Heating oil, garbage removal, water, insurance and property taxes have all gotten more expensive, Polley said. He highlighted that rental apartments are not covered by the province's capped assessment program for property taxes.

"With rent control in place in Nova Scotia, and with no help to deal with property taxes, there is no way we can pay for the skyrocketing costs of running Mont Blanc," the statement said.

The letter to tenants singles out water rates and Halifax Water's proposed increases as a significant concern.

Polly said the buildings' mortgages are up for renewal for the first time in 10 years, and current interest rates are higher, adding to the "significant cost pressures" that are motivating the conversion to condos.

Condo conversions 'rare' but more may be on the horizon

Converting rental apartments to condos is not without precedent in Nova Scotia, though it is not common.

Provincial law dictates that any time a property owner wants to convert rental housing into something else, it has to notify the director of residential tenancies.

CBC News asked Service Nova Scotia for details of past conversions, but the department did not share them by deadline. A spokesperson said conversions are "rare" and the last one happened in 2018.

Neil Lovitt, a vice-president at real estate consulting firm Turner Drake, said this case might be a sign of a new trend.

"I think it may be, perhaps, something that will become more common in the near-term future," Lovitt said.

He said other property owners could be feeling the same cost pressures as the owners at Mont Blanc. Some, Lovitt said, are probably also thinking about selling.

He noted that parcelling off and selling individual units involves more work than selling a building as a whole, but the condo approach also stands to bring in more profit.

"If you're trying to sell a 64-unit building, there's a fairly small number of people that would have the resources and interest of buying that type of property," Lovitt said. "But if you're selling individual units that are much more accessible price-wise … that's a much larger potential pool of buyers, and so supply and demand kicks in."

Province to monitor for more conversions

Service Nova Scotia Minister Jill Balser said her department will monitor to see if this case kicks off a trend, or if it remains one among a rare few examples.

Provincial law makes room for cabinet to limit or prohibit property owners from converting rental housing into anything else, but the government would have to introduce new regulations to use that power. Balser said that isn't in the works, but isn't off the table.

"It is important to make sure that we are watching if any trends are to change," she told reporters after a cabinet meeting Thursday in Halifax.

Balser noted that the property owners have been following the rules, informing tenants and the province as required, and that they are entitled to make the conversion as a "business decision."

In other Canadian cities — namely Toronto and Vancouver — the condo market has been slowing down, but Lovitt said comparisons can't be drawn between those markets and Halifax. He said there's been significantly less condo construction in Halifax than in larger centres, where condo markets are flooded.

GBRF Properties said it plans to start listing condo units for sale in the next couple of months.