In the midst of a housing crisis, Quebec will provide $30 million in aid to a controversial short-term rental company that operates 389 apartments in Montreal, including many on Airbnb.
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Quebec in recent months has allocated a down payment of $6 million to the American giant Sonder. The rest will follow over the next four years.
The company offers dozens of Airbnb accommodations in Sud-Ouest, Ville-Marie and Plateau Mont-Royal, where the housing crisis has emerged.
“It is a company that has caused a net loss in conventional housing and a monopoly on rental shares,” denounced Cedric Dassault, spokesperson for Regroupement des Comités Logements et Association de Tenants du Québec (RCLALQ).
Accommodations in Montreal are also available on the Sonder platform and in particular on Booking.com and Hotels.com.
Many apartments are located in areas where short-term rent is now prohibited, according to municipal regulations, but where the company benefits from a “grandfather” or exemption.
The Company and its partners use the terms hotel, hotel apartment or tourist residence, but in all cases, these are full accommodations.
For example, in Plateau Mont-Royal, a former publishing house has been converted into a “hotel” with 54 apartments.
Sonder also runs accommodations in a building on Rue Saint-Denis where a medical clinic was to be located, but operates as a “hotel” (See other text below).
In Ville-Marie, a project in which Sonder is active, Penny Lane obtained a special permit in 2017 to allow him to rent 58 apartments short-term. Valerie Plante voiced her opposition, but the decision was adopted by the former Coderre administration.
The company defends itself by saying that it respects the regulations.
“Sonder works with its Montreal real estate partners, often to renovate properties in need of repair and help bring commercial properties back to market,” said company spokeswoman Fiona Storey.
Image is from Sonder.com
The Quebec loan, announced in 2020, aims, among other things, to create a growth center and 700 jobs in Montreal. However, the first installment of the loan has yet to be drawn down, according to the company.
However, a visit by our Bureau of Investigation to the planned site of the Center allowed us to see many empty spaces. Sonder says it employs more than 160 people in Montreal, but has not yet reopened its offices in the wake of the pandemic.
Montreal housing chief Benoit Doris has not commented on Sonder, but he wants stricter regulations.
For its part, the Quebec government believes Sonder is “operating within a legal framework where zoning allows.”
“The accommodations offered by Sonder, like hotels, are not the result of the transformation of rental buildings into accommodation establishments,” said Mathieu Saint-Amand, press officer for the Minister of Economy, Pierre Fitzgibbon.
What is a probe?
– Co-founded in 2014 by Montrealer Francis Davidson
– Davidson subcontracts on Airbnb by offering wine and valet parking to its guests
– In 2017, Sonder moved its headquarters from Montreal to San Francisco
In 2019, the company was valued at more than $1 billion, according to Forbes
Listed on Nasdaq in January 2022, the stock has since lost nearly 80% of its value
It manages 6,300 homes around the world
Present in 35 cities in ten countries
How it works ?
The company signs long-term lease contracts with real estate owners.
She takes care of decorating and subletting rental accommodation on various platforms, including Airbnb.
Sonder communicates with customers almost exclusively via the Internet or mobile phone.
With Nicholas Brewer
Sonder has already found itself in a hot seat in the past for its ways of doing things in the city.
In 2017, Radio Canada’s La Facture revealed that Sonder had been illegally renting, without the slightest license, a hundred homes in the capital. The company’s CEO, Francis Davidson, then admitted to operating “in the gray” and not having any licence, even though it was clearly required by law at the time.
He boasted of owning one of the largest short-term rental companies in the world.
A report from Metro newspaper three years ago also revealed that the company was still renting an Airbnb apartment until late 2019 without obtaining a permit.
In addition, in 2019 and 2020, a project to convert a building to the court ended up. Then the tenants claimed that they had been evicted from a six-unit building in Little Burgundy to make way for a short-term rental project that Sonder would manage.
A judge in the Administrative Housing Court rejected the building’s owner’s request, because she considered the city was preparing to legislate against the planned use.
The owner appealed the ruling, but later withdrew. The project with Sonder never saw the light of day, according to one of the tenants involved at the time, Charlotte Jacob Maguire. However, she says she still feels bitter about the experience.