Amid tight rental market, 29 downtown apartments to be converted to condos

Despite a tight rental market, Hamilton city planners recommend approving the proposed conversion of 29 apartments in the core to condos Tuesday.

That conversion,at the corner of King Street West and Hess Street in downtown Hamilton, won't be subject to the city's moratorium on condo conversions.

The moratorium came into effect earlier this year in response to a critically low vacancy rate for apartments in the city.

The city's threshold for not approving condo conversions is a 2-per cent vacancy rate, as reported in Hamilton-specific numbers generated for the city by the Canada Housing and MortgageCorp.

Vacancy rate below 2 per cent

The most recent data published by the city show that only 1.6 per cent of the two-bedroom apartments in the city of Hamilton were vacant last year. So any conversions of buildings that have many two-bedroom units will "not be permitted for2015andthe next 24 months," according to city housing services staff.

But the moratorium only affects two-bedroom apartments, so the one-bedroom and bachelor apartments at 275 King Street West are not subject to it.

"The 29 units that are currently in the application process are not subject to the moratorium because the vacancy rate for bachelor and 1 bedroom apartment units has been above 2.0% for the last 24 months as reported byCMHC," said city spokeswoman AnnLamanes.

Another 700 units won't be subject to the moratorium because they were grandfathered in before the vacancy rate got so low.

King and Hess

The projectin question has some history. It sat derelict for years after a suspected arson in the early 2000s. Then after DenisVranich bought it, construction spilled out on to King Street West,closing a lane of the major artery with construction hoarding while little progressappeared to be made.

Finally in 2012,the city granted and loanedmore than $1 million inincentives to the Hess Village Real Estate Corporation, owned byVranich.

The incentives included a $333,000 grant and a loan for more than $900,000 at 0 per cent interest because the project was mostly residential, according to a Hamilton Spectator article written at the time.

That proved controversial because Vranichhad pleaded guilty to sexual assault in 2007 and owed close to $300,000 in damages to a former female employee at a Hess Village club he owned.

A subsequent city committee made "honesty and integrity" a criterion for giving out downtown development loans.