TORONTO – The city’s ombudsman is claiming city staff failed to communicate properly with non-profit groups who rented city buildings at below market rates.
In a report released Wednesday morning titled, ‘Promises Made, Promises Broken,’ ombudsman Fiona Crean detailed several problems that have resulted in business between city staff and non-profit groups in Toronto.
“These non-profit agencies were treated very badly,” Crean said in a press release. “Staff from the city’s Real Estate and Facilities divisions gave them widely varying estimates of pending rate hikes, never provided the increases in writing, failed to explain or justify the increases, and invoked harsher terms than those given to other agencies.”
City policy allows non-profit community groups to lease space from the city at below market rent in return for providing services to the community.
The policy is cost-neutral for the city as non-profit groups cover the city’s costs.
Crean’s report claims that six groups occupying the same city building were given notice of a rent hike of 550 per cent – or a change in rate from $3.20 per square foot to $17.74 per square foot.
Crean also suggests that while city staff had provided warnings about the rent hike for over a year, estimated hikes allegedly varied widely and no written notice was ever received.
Further, the non-profit group was forced into arrears of $85,758.54 after the new rate was applied retroactively.
To remedy some chronic problems with the below market rent policy, Crean is recommending increased written communication between city staff and tenants.
Crean also recommends an information package be given to all below market rent tenants detailing expected operating costs and rent hikes.
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