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Housing for seniors | Small private residences sound the alarm

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Due to the labor shortage, cumbersome regulations and uncertain profitability, private seniors’ residences are closing their doors and the number of places no longer keeps up with the rapid growth of the elderly population. The City of Montreal believes it has found a solution by prohibiting the conversion of private residences.

“I’m tired of fighting,” drops Johanne Duhamel, who will close her retirement home (RPA) in Notre-Dame-de-Stanbridge on December 31.

The Press had made a phone appointment with the nurse by profession to discuss the issues faced by RPA owners. It was rather the closure of his establishment which accommodates 21 autonomous and semi-autonomous people that was discussed. She acquired the residence in April 2014.

Mme Duhamel lists the reasons that made him admit defeat: the overload of administrative work because of the regulations, the management of personnel and the increase in the cost of food and labor which erodes profitability.


PHOTO STÉPHANE CHAMPAGNE, ARCHIVES THE VOICE OF THE EAST

Johanne Duhamel, owner of a residence for the elderly

The last file is that of the sprinklers. We don’t have city water, we have wells. It is very expensive. We are talking about around $400,000. The government is helping us for about $200,000. The rest must come out of our pockets.

Johanne Duhamel, owner of a residence for the elderly

“I tried to put the residence up for sale,” she says. Because of the sprinkler file, it’s setting the world back. »

This example is far from unique. In the last six months, the register of RPAs certified by the provincial Ministry of Health has lost 60 residences.

The phenomenon of residences with fragile profitability that are closing has been a reality for several years. The Press reported on the phenomenon in 2019. Generally located in the regions, these residences that close very often lead to the uprooting of the elderly and their isolation. In many cases, residents have to be transferred to the public network, for lack of space in the private sector. Unlike private RPAs, the State finances 100% of the construction of places in the public network.

“The sector has fallen”


New complexes, often with more than 200 units, take over from time to time, which means that the number of places in RPA nevertheless increases. However, the growth is seriously numbed.


“Things are not going well in RPAs,” recognizes Marc Fortin, CEO of the Quebec Regrouping of Residences for Seniors (RQRA). I anticipate other closures by the end of the year. »

“The sector fell with the pandemic and has not recovered since,” corroborates Christian-Pierre Côté, of the real estate data firm Côté Mercier, which has been tracking the RPA market since 2008. Vacancy is at 12.8% housing, according to the latest report from the Canada Mortgage and Housing Corporation (CMHC), which dates from 2021; CMHC has since stopped publishing this data.

For RPA clients, Mr. Côté carries out mandates for opportunity and feasibility studies. “Construction costs are astronomical and operating costs have skyrocketed compared to customers’ ability to pay,” he says, explaining the apathy of developers that comes as the number of seniors explodes in Quebec. .


The reality is that private residences face serious challenges.

At the Résidence Le Saint-Jude d’Alma, a modern complex where there is absolutely no question of closing the doors, the RPA-certified building is now focusing on a more independent clientele (category 2, in the jargon, rather than of category 4).

“It made our job easier,” explains Daniel Beaulieu, general manager. It would have been difficult to meet the requirements such as the number of people required to enforce the surveillance threshold at night. »

On August 31, Quebec published a new version of the 17-page RPA certification regulation.

Difficult financing

Although the government has implemented modernization programs in the past to help small residences absorb part of the costs resulting from the increase in regulations, small RPPs have had difficulty obtaining financing since the CMHC no longer insures the mortgage loans of the smallest RPA, deplores the RQRA.

Result: banks are cautious.


PHOTO HUGO-SÉBASTIEN AUBERT, LA PRESSE ARCHIVES

Lyne Prud’homme, CEO of the Villa Fleurs de Lys residence, in Lanoraie

If I want to sell my residence with 28 units, I won’t find buyers because they won’t have financing. Financial institutions no longer lend below 75 or 100 units.

Lyne Prud’homme, CEO of the Villa Fleurs de Lys residence, in Lanoraie

Note that Mme Prudhomme does not want to sell his residence or close it. She agreed to speak to The Press to make readers aware of the reality of owners of small residences in the regions.

“For future transactions in the industry as a whole, I’m not sure that buildings will continue in RPA, she believes. Maybe the residences will be changed into income properties. »

In addition to the financial aspect, personnel management causes headaches. “If we arrive financially, it is because I do not pay myself a salary. I pay 40 hours a week to my spouse, who doubles that,” says Gaétan Nadeau, co-owner of L’Auberge du Louis d’Or in Danville. He too does not intend to close his residence despite the difficulties.

An owner of RPA with care units, who does not want to be named so as not to harm his residence, complains that the government made permanent the bonuses for workers in the public network at the same time as it announced the phase-out bonuses for attendants in private RPAs starting next March. “If I lower their salaries following the withdrawal of bonuses, my employees will leave to work for the public in intermediate resources or in CHSLDs. The day I lose my employees, I empty the residence. »

The arbitrariness that reigns in the financing of the care necessary for residents with a loss of autonomy constitutes another headache, adds Gaétan Nadeau. “We don’t know the CLSC scales,” he said. It does not provide all the information to which citizens are entitled on personal care reimbursements. You always have to defend yourself against the CIUSSS [autorité régionale de santé]. We always have the impression that they are arbitrary, ”he criticizes.

Elected officials give themselves a right of veto on the fate of private RPAs in Montreal

What would you say if you had to ask permission from elected municipal officials to decide the fate of your business?

The City of Montreal announced on 1er October that most boroughs have adopted or are about to adopt a by-law to prohibit the conversion of private residences for the elderly (RPA) to another use.

The main purpose of the by-law is to prevent an RPA owner from transforming his residence into a traditional rental property.

RPA operators, who must already struggle with a series of issues that weaken their activities (see the previous tab), are furious, if we trust the reaction of the CEO of their group.

It is a monumental farce that the City is putting forward. It’s absolutely mind-boggling to not understand an industry and not talk to people who are in the industry. It’s worrying. It’s petty politics. The City makes a nice image on the backs of the big bad guys [les propriétaires de RPA].

Marc Fortin, CEO of the Quebec Regrouping of Residences for Seniors (RQRA)

The organization intends to challenge the legitimacy of the settlement in court.

According to Professor François Des Rosiers, of Laval University, the losers of the regulation are the owners of small residences who face profitability issues. “When things go wrong,” he says, “they can hope to save part of their investment by selling the building to a buyer who will change its vocation. »

As of March 31, 2022, there were 192 RPAs on the island of Montreal, including 93 with less than 100 spaces.


Typical case

With its settlement, the City seeks to avoid a repeat of the situation experienced at the Mont-Carmel residence in downtown Montreal, where the new buyer converted an RPA into a rental property without following the rules and without consideration to the regard to elderly occupants.

“We only come to give a use to a building. When we fall into the zoning aspect, the City is absolutely within its jurisdiction. There can be no conversion of use of the building into other things than health care services, unless it goes through a PPCMOI [projet particulier de construction, de modification ou d’occupation d’un immeuble] “, explains in a telephone interview Robert Beaudry, city councilor for the district of Saint-Jacques, downtown, and member of the executive committee.

Indeed, the by-law provides that the owner who wishes to convert his residence, for example because it is loss-making, will have to ask the permission of the elected officials to change the zoning, more precisely by a PPCMOI.

“It allows us to handle exceptions when it makes sense; for example, to transform a private RPA into social housing managed by an NPO [organisme à but non lucratif] “, specifies the chosen one.


PHOTO DAVID BOILY, LA PRESSE ARCHIVES

Robert Beaudry, city councilor and member of the executive committee

This type of regulation is adopted to protect the collective interest from private gain.

Robert Beaudry, city councilor and member of the executive committee

Despite its considerable impact on the fate of these businesses and their owners, the regulation was not the subject of any particular external consultation, acknowledges Mr. Beaudry. As with any zoning by-law, the population had a voice between the first and second reading of the by-law.

He invites Mr. Fortin and the RQRA to communicate with him to share their grievances.

Drive away private investment

For the spokesperson for the RPA group, the restrictive regulation will have the effect of curbing the addition of accommodation units on the territory of Montreal.

“In three to five years, there will be a shortage of housing for seniors,” says Marc Fortin, “because with regulations like that and disguised expropriations, developers will go and build elsewhere. The City bagged us and hit us with a baseball bat. »

Mr. Beaudry rejects the argument out of hand. “I would like someone to explain to me why that makes it less attractive. »

In his practice, appraiser Christian-Pierre Côté, of the real estate data firm Côté Mercier, observes that the building is worth much more as a traditional rental property than as an RPA, which can accelerate the phenomenon of conversions, points out he. He recently looked at a case in Quebec where the difference in value was around 20% in favor of a conversion into a rental apartment building.

“The rules are much too broad,” he says. In the case of small residences, this is not justified. By excluding them, it would already be less bad. »

Learn more

  • 94%
    Proportion of residents satisfied with their residence, according to the results of a survey conducted by the firm Léger among 1,200 residents in 2017

    Source: RQRA



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