Report: Real Estate Giant to Raise Highland Ave. Rents

SOMERVILLE, MA—Highland Avenue residents could be feeling a corporate squeeze on their wallets as rents increase all across the city.

The Somerville Journal reports that Swedish real estate giant Akelius bought 101 units in three Highland Avenue buildings this month. Akelius has $8 billion in international holdings and has come under fire for drastically raising rents in the past. Akelius plans to increase rents by two-to-three percent.

Danielle McLean of the Journal reports:

A dozen of the tenants at those buildings are financially insecure, receiving federal housing vouchers.

Jordan Milewicz, the company’s U.S. CEO, said the company would likely raise rents by two or three percent per year at the buildings, and work with its struggling tenants unable to afford the increased rents. Somerville Homeless Coalition Executive Director Mark Alston-Follansbee said such an increase would be reasonable, but much more would make it difficult for the coalition to keep their tenants at the buildings.

“To think about the struggle for people living here and wanting to stay here, when people want to work with us to help ensure that people can stay here is a real opportunity,” he said. “We are grateful for anybody who understand that housing is difficult for poor people and they will work with us to make sure they can stay in their apartments.”

But in general, large investors and corporations have caused a sea change in the availability of Somerville’s housing stock, Alton-Follansbee told the Journal.

“It’s really changed over the last 10 years,” he said. “This is a very new trend in Somerville, where these buildings owned by individuals are being bought out by corporations.”

The Journal’s report also mentioned that Toronto’s WOW magazine called Akelius a “rent monster.”

WOW magazine’s report suggested that the company ignores basic repairs in favor of major upgrades:

“Tenants all over the city tell the same story: the company moves in, embarks on major upgrades to some parts of the building but neglects basic repairs in their units. Superintendents who live on site are replaced by a phone number that’s little more than a black hole for residents’ complaints.

Soon enough people start moving out, and Akelius renovates their vacated units to rent them out at a higher price.

“Their profit model is based on putting out long-term tenants, renovating units and jacking rents,” says Cole Webber of Parkdale Community Legal Services (PCLS). While most corporate landlords who buy properties are happy to simply accept rent from the existing residents, “Akelius has come in with a plan to bring in a more affluent type of tenant.”

Akelius Canada was also taken to the Ontario Landlord and Tenant Board, according to a report by The Star. Tenants complained that their quality of life had been negatively swung due to Akelius removing their building superintendents

The Star reports:

“Nearly 40 tenants in four of Akelius’ Parkdale properties are asking the board to force the Swedish company to either reinstate live-in superintendents or reduce the rent for each tenant. They also want Akelius to compensate them for out-of-pocket expenses allegedly incurred due to the loss of the superintendents, and for the board to fine Akelius “an amount at the board’s discretion.”

Akelius’ U.S. CEO Jordan Milewicz told the journal that rents would increase at a two-to-three percent average each year, and that individual rents would be reviewed on a case-by case basis.

Could the Somerville area suffer the same fate? Check with Somerville Patch for more as this story develops.

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