Hazelview is evicting, demolishing and redeveloping Herongate for one reason: to reposition the property and exponentially increase its value.
What is Repositioning?
Repositioning is a marketing term for reshaping an asset (which could be a property, brand, business, etc.) from something that is deemed undervalued to something the owner thinks will be more profitable and more attractive to investors. A well-known example of this is Amazon, which started as an online-bookstore and repositioned itself to dominate the online shopping sector.
Many landlords big and small follow a business model that utilizes repositioning. They reposition through upgrades once units become vacant, which is why there is an incentive for tenant turnover. Repositioning is also aided by installing new boilers, which helps with greenwashing, and replacing concrete balconies with glass ones, which is an example of “curb appeal” – something that looks attractive in investment presentations and rental advertisements. These changes mostly have consequences for tenants in the form of above-guideline rent increases, which create displacement pressure but have been fought and beaten by organized groups of tenants.
The most significant way, however, that landlords reposition their properties is by changing the demographics. Hazelview is accomplishing this by demovicting existing tenants from Heron Gate Village to make way for a different tenant base.
What kind of demographic is more profitable to landlords? Research has shown white neighbourhoods have higher property values. While obviously no landlord in Canada would ever state plainly they want whiter properties, tenants see the on-the-ground changes for themselves, landlord marketing is revealing, and statistics show the changes in numbers.
For example, with Hazelview’s new Vista Local complex, which is the first phase of the Heron Gate Village redevelopment, the landlord’s marketing showcases a completely different demographic than what exists in the neighbourhood. Their website advertises “You’ll find pubs where you’ve always got a seat,” despite the fact that the neighbourhood is largely Muslim. Their advertisements show exclusively white people, despite the fact that the neighbourhood is mostly Black and Arab. Even the name Vista Local is a brand name that reflects the adjacent white, home owning and affluent Alta Vista neighbourhood. Hazeliew’s business model quite literally involves repositioning Heron Gate Village from its current reality to mirror Alta Vista.
The statistics for how Heron Gate Village has already changed with the demovictions of 2016 and 2018 and the development of Vista Local show the hard numbers of the repositioning.
The Repositioning of Heron Gate Village in Numbers
The following statistics are specifically for the area comprising Vista Local and a section of around 85 original rowhouses that were built in the 1960s and are still standing to this day. The new Vista Local development consists of 348 units, and started renting around 2020.
The 2016 stats reflect post-demolition for the first phase of demovictions but pre-Vista Local. When the 2016 census took place on May 10, 2016, the first parcel of rowhouses (where Vista Local is now located) was already vacant and most townhouses were likely demolished. Police tactical training took place in March, 2016.
The overall population of this area increased 90% between 2016 and 2021. The prevalence of low income dropped sharply from 45.9% in 2016 to 23.0% in 2021.
The racialized population decreased from 62.2% in 2016 to 56.9% in 2021.
The Arab population saw a huge decrease, going from 32.4% in 2016 to 9.2% in 2021.
Specifically, the Iraqi population collapsed. It went from 75 people in 2016 (20.3% of the population) to 0 in 2021.
Meanwhile, the white population more than doubled, going from 9.5% of the population in 2016 to 24.2% of the population in 2021.
The Chinese population went from 0 people in 2016 to 60 people in 2021. People of Chinese origin tend to be some of the wealthiest people per capita in Canada.
The Somali population went from 90 (24.3% of the population) in 2016 to 160 (22.8% of the population) in 2021. While this is an overall decrease, it is rather small. It could be explained by bigger household sizes due to displacement and financial pressures.
The average family size in the area went from 4.9 in 2016 to 3.7 in 2021. This is very likely due to the small Vista Local apartments. However, any increase in the size of Black households may be outweighed by the sheer number of units in Vista Local.
Financialized Properties in Ottawa
One way to determine which landlords are considered financialized is by identifying which of them meet one or more of the following criteria: publicly advertise investment funds for investors to join, is a publicly listed company, or is owned by a pension fund.
Using this definition, 11 landlords with properties in Ottawa are considered financialized: InterRent, Minto (including its affiliate Ferguslea), Hazelview, Starlight, CAPREIT, Realstar, Q Residential, Killam, QuadReal, COGIR, and GWLRA. These landlords own a combined 101 properties in Ottawa.
The statistics for these financialized properties reveal they are located in much higher than average racialized neighbourhoods. The average share of the population for these areas that is racialized is 46.07%. Specifically, the Black population level is 16.42% and the Arab population level is 8.88%. These levels are much higher than the share of the population that is racialized for both Ottawa and Canada.
This indicates that financialized landlord properties are located in areas with significantly higher racialized populations.
Levels of racialization for areas in Ottawa where financialized properties are located, and for Ottawa and Canada.
| Areas in Ottawa where financialized properties are located | Ottawa | Canada | |
| Share of the population that is racialized | 46.07% | 32.47% | 26.53% |
| Share of the population that is Black | 16.42% | 8.47% | 4.26% |
| Share of the population that is Arab | 8.88% | 5.81% | 1.91% |
What is a Financialized Landlord?
Many aspects of our lives are now involved in some sort of financial scheme. Shopping malls are owned by huge pension funds, mortgages are amassed into securities, banks use our savings accounts for investment purposes. The economy relies more and more on finance, and the study of financialization has helped capture how this process occurs.
One way to look at how financialization has impacted rental housing is by contrasting the business model of a traditional landlord with one that has become financialized.
Traditional landlords generally rely on rent collection as their source of passive income. They may prefer longer-term tenants and the stability of hassle-free, reliable rent collection even if those rents are not at current market levels. Or they may push existing tenants out so they can take advantage of vacancy decontrol and raise the rent without limit on the newly vacant unit. They may cut operating costs by neglecting properties, refusing to do basic maintenance in tenants’ units. But their business model is pretty straightforward and predictable and revolves around rent collection.
Financialized landlords rely much less on rent collection. Some of these landlords publish annual financial reports which reveal that rent makes up only a small share of their total revenue. Instead, these landlords are in the business of shaping their properties into attractive investment portfolios. This is largely done through image creation. They want their property to look a certain way and to present their investors with an image of wealth, value and growth. This is done through greenwashing, modernization, technological advancements, and demographic changes. In a word, repositioning.
The world of finance has allowed landlords to capture significantly more value from properties than simple rent increases ever could.
The strategies financialized landlords employ generally require huge amounts of capital, and rely heavily on analytics and technological tools. Imagine shifting the entire demographic makeup and brand of a large apartment complex, let alone an entire neighbourhood like Heron Gate Village. The high-net-worth of these investors give landlords access to this capital. Analytics and technologies create possible future growth outlooks.
For this study, landlords are determined to be financialized if they meet either one or more of the following criteria:
- they publicly advertise private investment funds for investors to join;
- they are a publicly listed company;
- they are owned by a pension fund.