New Brunswick needs rent control, and it needs it now - NB Media Co-op (2023)

The debate about the housing crisis has taken a new turn in the Telegraph-Journal, as one of its editors finally echoes housing activists’ calls for rent control.

No doubt, it is hard to ignore the dozens of stories in the last few weeks of people receiving 50 per cent or more in rent increases.

But this has not stopped the province’s propertied classes (and their promoters at the Telegraph-Journal) from making suggestions that would harm the public. Because they frame the question incessantly in terms of market supply, they fail to see how the institutions of the market are failing renters and homeowners alike.

That means their policy proposals are good for them, but detrimental to almost everyone else.

A supply problem?

The assumption that there is a lack of supply conveniently deflects from the lack of construction of new affordable housing, and calls for proposals that will facilitate development. If we don’t do what the developers want, as economist Herb Emery recently claimed, we will make the housing shortage worse!

But is there a supply problem, and if so, when and how did it emerge? More importantly, a supply problem for whom?

Between the first quarter of 2017 and the fourth quarter of 2021, 11,203 new housing units were completed in New Brunswick, many of them rentals.

Over the same period (excluding the fourth quarter of 2021 as that data is not yet available), New Brunswick’s population estimates have risen from 765,000 to 794,000. In short, about 29,000 people have been added to the population—5,000 in the most recent quarter of 2021 alone (the third quarter).

The average household size in 2016 was 2.3 persons per household, meaning that the addition of 11,203 units would house approximately 25,767 people. That leaves a small deficit of about 1,500 housing units needed to fully house our growing population—a deficit that only emerged in the second half of 2021, well after the housing crisis was underway.

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This is the “supply problem.”

To put the deficit into proper perspective, housing starts in five of the last six quarters surpassed 1,000 units in New Brunswick. Any two quarters back-to-back since the start of 2018 likewise tally more than 1,000 units of completed homes being added to the market.

The number of apartments currently under construction in each of the last two quarters tops 3,000: plenty of projects already underway that can handle increased demand in the medium term and even increase overall supply.

The market is tight (as it is all across the country), but it has responded to the increase in demand and we are producing enough housing — despite taxes, labour shortages, increased materials costs, municipal by-laws, development regulations, and so on.

The bigger question is for whom are we building homes?

Beyond supply

New apartment buildings are going up all over the province. But with rents starting above $1500 a month, they are not affordable for most people.

The market is responding to new demand for apartment rentals from higher-income groups, especially economically secure, older adults, who are making new types of housing decisions, and have the most choice about where to live.

The market logic is that if you build enough new units at or above $1,500 a month, other units will come available at $600 or $1,000, and the market will settle itself out.

Except this is not happening. There is no added supply of affordable apartments coming from anywhere. Instead, investors are buying up older, more affordable apartment units and increasing the rents 50 to 60 per cent, simply because they can.

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Once these affordable rental options are gone, they are not replaced. This is the real supply issue, but it is not going to be addressed by the market, which has no interest in building affordable housing. They are building only for the top of the market, and they are going full-steam ahead.

This is why advocacy groups like the NB Coalition for Tenants Rights and ACORN NB have called for rent control. As the recent Brunswick News editorial correctly concedes, rent control is urgently needed now. It is also past time for the Higgs government to recognize this as a crisis and act.

Cutting taxes will further benefit investors

The Irving papers have consistently echoed apartment owners’ proposals to address the affordability crisis by cutting the so-called “double tax” (which is actually not a double tax), and do so regularly, sometimes publishing as many as two editorials a week on the topic.

Their attempt to manufacture consent for a tax cut that would benefit wealthier landlords ignores the serious consequences that would likely have on regular homeowners and workers.

Cutting taxes will not decrease rents. But it will increase profits for landlords, which may have some undesirable effects on homeowners and the housing market.

This is because investors are buying single family homes to rent.

As the recent Telegraph-Journal editorial points out, home sales have accelerated significantly of late: over 13,000 homes were sold in the province in 2021, 60 per cent above the 10 year average. This is taken as a sign of limited supply, but it neglects the dynamics influencing supply and demand.

If 11,000 people moved to New Brunswick in 2021 alone, as Statcan data suggest, that would be less than 5,000 households if we assume that people moving to the province have households roughly the same size as the Canadian average (of 2.4 people per household). So who is making up the extra demand?

The answer is investors.

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Canada is currently awash in investors buying up new and old housing stock.

The Bank of Canada’s May financial system review noted that investors accounted for a fifth of home purchases at the start of 2021. In some markets, including small ones in Atlantic Canada, the percentage is much higher. This reflects growing wealth inequality, including between Canadian regions, and so it is urgent that we get better data to find out the extent of investor-buying in New Brunswick.

Not all housing units that are bought by investors are rented out, and many are diverted towards the short-term rental market where it is possible to make higher returns, distorting rental markets.

In Canada, 1.3 million homes currently sit empty according to a study from last fall using data from the OECD. That is 8.7 per cent of the total national housing stock.

In larger centres, housing units are simply being used as a place to store wealth. Where else can you get returns in the range of 30 per cent?

With housing prices accelerating across Canada, similar pressures are occurring in Atlantic Canada, with wealthy Canadians purchasing “second homes” in Moncton, Fredericton, and Saint John, inflating prices for local workers.

Canadian banks are tripping over themselves to provide advice on how to use the equity accrued in high market housing to buy real estate elsewhere in Canada (for instance, see here). And new firms, like Saint John’s Canada Homes for Rent (which started after the 2008 crisis), make it easier than ever to buy houses to rent.

The Bank of Canada released a report this monthshowing that in June 2021, investor-buyers had doubled the number of mortgages they originated to purchase homes over the previous year (Chart 3, here). They also note that as investor-buying has increased, the number of first-time buyers has declined, swelling the ranks of those who will rent.

Similarly, in the US, investors spent $64 billion US on homes in the third quarter of 2021 alone, an 80 per cent increase year over year.

In Canada, large corporations like Toronto-based Core Development Group, is the first major investor to target single-family homes for the rental market, however similar markets are more developed in the US, with large private equity firms ready to buy up smaller fish in the event of a housing correction.

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Cutting taxes on non-owner-occupied properties (e.g., cutting the “double tax”) increases the profit margins of investor-buyers big and small. It makes homes in New Brunswick more attractive for investors, who don’t work here.

Why are investors buying houses in New Brunswick, of all places?

Because of weak tenant protections. This reason alone makes New Brunswick particularly attractive relative to other parts of Canada, which are also seeing an influx of investor-buyers.

Better solutions

As the NB Coalition for Tenants Rights has said for the last two years, if we want to tackle the housing crisis, there are better ways of using provincial public funds than cutting taxes on landlords.

One way would be to use the proceeds of the tax to increase the supply of non-profit and cooperative rental housing.

The fastest and most important thing the province can do is bring in rent control tied to individual units (as opposed merely to tenancies, which still allow investors to increase rents on turnovers). This measure will dampen speculative investment in New Brunswick’s housing stock, without altering the dynamics that are increasing demand for rental housing, especially amongst older adults.

Municipal and federal levels also have work to do to help boost the number of affordable units, but the province is where fast action can prevent the crisis from getting worse. It is way overdue.

Matthew Hayes is a spokesperson for the New Brunswick Coalition for Tenants Rights and the Canada Research Chair in Global and Transnational Studies at St. Thomas University.

Tags: housingMatthew Hayesreal estaterent controltenants rights

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FAQs

Does New Brunswick have rent control? ›

Effective immediately, rent cannot be increased by more than 3.8% between January 1, 2022 to December 31, 2022. This includes a week-to-week, month-to-month, year-to-year, or fixed term lease. Landlords who wish to increase rents at or below this amount must provide proper notice Rent increases.

How often can a landlord raise rent in New Brunswick? ›

How often can a landlord increase the rent. The landlord cannot increase rent within the first 12 months of a tenancy. The rent can only be increased once every 12 months.

Why is renting so hard at the moment? ›

Interest rates are rising, which in turn, pushes mortgage rates up for landlords. And everyone is poorer because of a cost-of-living and energy crisis. All of this has made renting in London near impossible.

Why rent is so high in Fredericton? ›

The province's population is up 14,000 since 2019 and that has put pressure on both the price and availability of places to live. In some cases it has forced those without the financial ability to keep up with sudden jumps in rent to move out of their apartments.

What is the most a landlord can raise rent? ›

The Tenant Protection Act of 2019 (AB 1482) restricts rent increases in any 12-month period to no more than 5% plus the percentage change in the cost of living (CPI), or 10%, whichever is lower. For increases that take effect on or after Aug. 1, 2022, due to inflation, all the applicable CPIs are 5% or greater.

Can a landlord evict a tenant in New Brunswick? ›

Only a Residential Tenancies Officer or a Judge of the Court of Queen's Bench of New Brunswick has the authority to issue an Eviction Order and evict a tenant from their rental property. A landlord must apply for an eviction through the Residential Tenancies Tribunal.

How much can a landlord increase rent by annually? ›

“The Landlord can increase the rent every twelve months. The increase is to be calculated according to the Retail Price Index, being a minimum of 3% and a maximum of 8%.

Can a landlord evict you in the winter New Brunswick? ›

Tenants have 15 days after receiving the notice to submit an Application for Assistance if they disagree with the Notice of Termination. A landlord or tenant may give a Notice of Termination at any time during the year, including the winter.

How much notice does a landlord have to give in NB? ›

At least 3 months' written notice before the end date of the lease, to be effective on the last day of the lease agreement. For example, for a lease that began on January 1, the last day of that lease would be December 31. You need to give notice on or before October 1 to end the lease on December 31.

Why renting is better than buying right now? ›

Renting is cheaper than buying in three-quarters of the country's 50 largest metro areas, Realtor.com found. The culprit? Rising mortgage rates, which "are increasingly tipping the housing affordability scale in favor of renting over first-time buying," according to the research company.

Will flat prices rise in 2022? ›

This could in turn push average mortgage rates upwards of 8% (while still historically low, that is more than double the 1.6% rate recorded at the end of 2021) Based on this data, Capital Economics has forecast house prices to rise throughout 2022, before falling by 5% in 2023.

Why is rent seeking a problem? ›

Rent seeking can disrupt market efficiencies and create pricing disadvantages for market participants. It has been known to cause limited competition and high barriers to entry. Those that benefit from successful rent seeking obtain added economic rents without any added obligations.

Why are so many people moving to New Brunswick? ›

During the year ended in March, Statistics Canada figures show 10,540 people from Ontario alone came to New Brunswick, in search of more space, cheaper housing or a change in their lifestyle. It was the largest influx into New Brunswick from a single province in any 12 month period since records for that began in 1952.

What is the fastest growing city in New Brunswick? ›

Saint Andrews -- the Fastest Growing Town in New Brunswick

Andrews by-the-Sea's population has grown by 14.7% in the last five years, making it the fastest growing town between 2,000 and 5,000 people in New Brunswick according to the 2021 Census Report.

Can my landlord increase my rent every year? ›

Your landlord can't increase your rent during your fixed term unless you agree or your agreement allows it. If your agreement says your rent can be increased it has to say when and how it will be done. This is known as having a 'rent review clause'.

How much can a landlord increase rent 2022? ›

Changes to your rent

This year, the rules say rents can be increased by last September's Consumer Price Index (CPI), plus an extra 1%. The CPI is a common measure of inflation and in September 2021 was 3.1%. This means that most rents will increase by 4.1% from April 2022.

Can my landlord increase my rent by 15%? ›

A landlord must get a tenant's permission to increase rent by more than any amount previously agreed. Plus, the increase should be in line with average rents in the local area and relevant to the property size.

How do tenants get higher rent? ›

How Do I Tell My Tenant I Need to Raise the Rent?
  1. Remember you're a business. ...
  2. Do your research. ...
  3. Raise the rent all at once or incrementally. ...
  4. Don't negotiate or ask tenants what they think a fair rent increase would be. ...
  5. Be courteous and firm. ...
  6. Find a template you like. ...
  7. Send a formal letter by certified mail.

Can a landlord just kick you out? ›

A landlord cannot evict a tenant without going through due process of law. Assuming there is a written lease agreement in place, a breach of the conditions of the lease might lead a landlord to want to cancel the lease.

What are tenants rights in New Brunswick? ›

Your rights as a tenant

A copy of the signed lease agreement. The fulfillment of all lease agreement terms and inclusions. To receive a rental unit that is safe, clean, and fit to live in. A rental unit that is well-maintained and meets all housing and building standards.

How long does a private landlord have to evict you? ›

They have to give you at least 28 days notice, but this could be longer depending on your agreement. If you don't leave by the time your notice ends, your landlord has to go to court to get a court order to make you leave.

Can you refuse a rent increase? ›

Applying to challenge your rent increase

If you and your landlord can't agree on your rent increase you can ask a tribunal to decide for you - it's free to apply. You'll need to apply before the date your rent increase is due to start - you can find this on your section 13 notice.

How do I ask my landlord to not increase rent? ›

How to Convince Your Landlord to Lower Your Rent
  1. Prove You Deserve to Pay Less.
  2. Show You've Done Your Homework.
  3. Bring Something to the Table.
  4. Agree to Stay Put for Over a Year.
  5. Agree to Pay Before the First of the Month.
  6. Bottom Line.
9 Jul 2018

How much can a landlord increase rent 2023? ›

This year the government formula allows us to increase rents by up to 4.1%. This is equivalent to the inflation rate in September plus 1%.

What rights do long term tenants have? ›

The right to be protected from unfair rent and unfair eviction. The right to have a written agreement if you have a fixed-term tenancy of more than three years. As of 1 June 2019, to not have to pay certain fees when setting up a new tenancy under the Tenant Fees Act (commonly referred to as the Tenant Fee Ban).

How much notice does a landlord have to give a tenant to move out in Nova Scotia? ›

7 days before the date you want the tenant to move out for any reason other than failure to pay rent and breach of statutory conditions.

Can landlords evict tenants for no reason? ›

At the end of a fixed term tenancy, landlords don't need a reason to evict tenants – as long as they've given tenants the correct notice, they can apply to a court for a possession order.

Can a landlord give notice at any time? ›

Most tenancy agreements will include a break clause. This allows landlords to give a tenant notice after a certain period of time has passed. It is very rare, however, that a break clause will allow you to regain possession of your property during the first 6 months of a tenancy.

Do you legally have to give 2 weeks notice in New Brunswick? ›

Where an employee has been employed with an employer for a period of at least six months but less than five years, the employer must give the employee at least two weeks written notice of the termination or layoff.

How many weeks notice do tenants have to give? ›

If you're on a periodic tenancy, you have to give your landlord 21 days' notice if you want to leave. You can only give less notice if your landlord agrees that you can.

Is it better to rent or buy a house in Canada 2022? ›

The annual unrecoverable cost of owning a home is approximately 5% of the property value (whether you have a mortgage or not). If your rent is lower than that for a comparable home, you should keep renting. If rent is higher than that, you're probably better off buying a comparable home.

Should I buy a house in 2022 or wait? ›

Unsurprisingly, many home buyers are left wondering: Is buying a house still worth it in 2022? The short answer is yes. If you're financially ready, buying a house is still worth it — even in the current market. Experts largely agree that buying and owning a home remains a smarter financial move than renting for many.

Is it better to buy or rent when you are 70 years old? ›

In theory, buying a house after retirement gets you more for your money than renting. However, homeownership also entails substantial financial risks. Issues such as fluctuations in market value, unexpected maintenance expenses, and insurance deductibles can increase costs over and above those of renting.

Will the price of property go down in 2022? ›

In fact, a poll by international news agency Reuters confirms that India's real estate prices will rise by at least 7.5% in 2022, and by 6% in 2023 and 2024.

Do house prices go down in high inflation? ›

How Does Inflation Affect Property Value? In terms of the housing market, inflation causes house prices to increase over and above where the average might sit due to simple supply and demand. This often leads to many potential buyers being priced out of buying a property.

Will house prices rise in next 5 years? ›

It said house prices will have risen 6 per cent by the end of 2022 but that they will fall 5 per cent in 2023 and a further 5 per cent in 2024 as a result of the sudden spike in mortgage rates caused by the government's fiscal plans. This would take house prices back to where they were last summer.

What is the main reason to avoid renting to own? ›

A major disadvantage of renting to own is that renters lose their down payment and other non-refundable charges if they decide not to purchase the home. Some sellers may even take advantage of renters by making it difficult or unappealing to purchase the home — with the goal of keeping the down payment.

What are the top three reasons to rent? ›

Becoming a homeowner does have its perks, but here are the top 10 reasons why renting could be a better fit for you.
  • Flexibility. ...
  • Budget. ...
  • Maintenance. ...
  • Amenities. ...
  • No property taxes or HOA dues. ...
  • Different investment opportunities. ...
  • Social life. ...
  • Mortgage-free.
29 Jun 2020

What are the three disadvantages of renting? ›

WHAT ARE THE DISADVANTAGES OF RENTING A HOME?
  • Unable to enjoy tax deductions.
  • Your rent will most likely grow from year to year.
  • No equity built.
  • More difficult and expensive to have pets.

Will house prices drop in New Brunswick Canada? ›

While many regions nationwide have seen prices drop, Cathcart said New Brunswick will continue to see activity flatten out.

What is a good salary in New Brunswick? ›

Find out what the average Nb salary is

The average nb salary in Canada is $33,433 per year or $17.15 per hour. Entry-level positions start at $29,250 per year, while most experienced workers make up to $50,700 per year.

Which occupations are in demand in New Brunswick? ›

Here are the Top 10 Most In-Demand Jobs in New Brunswick.
  1. Nurses (NOC 3012) ...
  2. Delivery and Courier Service Drivers (NOC 7514) ...
  3. Physicians – Family (NOC 3112) and Specialists (3111) ...
  4. Financial and Investment Analysts (NOC 1112) ...
  5. Administrative Assistants (NOC 1241)
10 Dec 2021

Is buying property in New Brunswick A Good Investment? ›

Prices are on the rise, even as home sales are still failing to live up to 2019 expectations in terms of gross numbers. If you're looking into real estate investing in New Brunswick, the overall outlook is that the province's market is doing well to rebound from the coronavirus pandemic.

What is the nicest part of New Brunswick? ›

Saint Andrews, or St. Andrews by-the-Sea as it is often called, is one of New Brunswick's prettiest vacation towns.

What is the warmest part of New Brunswick? ›

It's pretty simple, actually. Our warmest, sandiest beaches are on the Acadian coast. This runs along New Brunswick's eastern border, from about Dalhousie to Murray Corner. The mid section of the shoreline hugs the Northumberland Strait, a shallow body of water that warms up quickly under the hot summer sun.

What's the most a landlord can increase rent? ›

The Tenant Protection Act of 2019 (AB 1482) restricts rent increases in any 12-month period to no more than 5% plus the percentage change in the cost of living (CPI), or 10%, whichever is lower. For increases that take effect on or after Aug. 1, 2022, due to inflation, all the applicable CPIs are 5% or greater.

How much can a landlord increase rent per year? ›

For example, in 2020/21 rent increases of up to 2.7% were allowed, while for the current 2021/22 year, housing associations can raise rents by 1.5%.

Can my landlord increase my rent by 40%? ›

Yes, landlords have the right to charge as much as they like for their property. If you have signed a fixed term tenancy agreement, usually for a period of 6 or 12 months, your landlord cannot increase the rent during that time without your consent.

Which Canadian provinces have rent control? ›

The provinces of British Columbia, Manitoba, Ontario, and Prince Edward Island have rent control.

What is the Canada New Brunswick housing benefit? ›

The Canada-New Brunswick Housing Benefit is a shared funding initiative between the Government of Canada (CMHC) and the Province of New Brunswick. This short-term benefit of up to three years helps New Brunswick families with children who work part-time or at lower-paying jobs who are struggling to afford rent.

How much is the New Brunswick Housing Benefit? ›

The Canada – New Brunswick Housing Benefit consists of a short-term benefit averaging between $300 to $475 per month, depending on household income, composition and location. The program aims to support about 6,700 households in the province over the next seven years.

Will rental prices go down 2022 Canada? ›

The average cost to rent an apartment in Canada increased by 11.1% from August 2021 to August 2022, according to the latest national rent report from rentals.ca.

Which province in Canada has the most affordable housing? ›

The price of an average home in Saguenay, Quebec, is just $267,353—the cheapest average cost of a home on this list. That number comes from the Canadian Real Estate Association (CREA), which researched the cheapest areas to purchase a property in Canada at the moment.

Which city in Canada has the highest rent? ›

rent shows that the average rent in Greater Vancouver for an unfurnished one-bedroom apartment increased from $2,256 in October to $2,317 this November. North Vancouver rent rose by 10.4 per cent, making it the most expensive city in Canada with an average of $2,760 per month.

Is New Brunswick a low income area? ›

13.1 percent of the population of New Brunswick was considered to be in low income in 2020.
...
Percentage of New Brunswick's population in low income from 2000 to 2020.
CharacteristicPercentage of population in low income
201915.3%
201814.2%
201715.5%
201615%
9 more rows
23 Sept 2022

What is the poverty line in New Brunswick? ›

Half of New Brunswick single persons have an income of $20,200 or less. Of the 217,790 families in New Brunswick, 16,116 (7.4%) of them have an income of less than $20,000 a year. Of the 93,000 single people in New Brunswick, 46,221 (49.7%) of them have an income of less than $20,000 a year.

What is the most Housing Benefit you can get? ›

The maximum Housing Benefit you can get is the full amount of rent you have to pay.

Do pensioners get housing benefits? ›

You can claim these benefits even if you are over State Pension age as long as your income is low enough: Housing Benefit. Council Tax Support. Support for Mortgage Interest.

Is living in New Brunswick Affordable? ›

The cost of living in New Brunswick is $1504, which is 1.15 times less expensive than the average in Canada. New Brunswick ranked 11th most expensive and 8th best state to live in Canada. The average salary after taxes in New Brunswick is $3800, which is enough to cover living expenses for 2.5 months.

Will you get cost of living payment if you get Housing Benefit? ›

You will not get a Cost of Living Payment from HMRC if you have already received a low income (means tested) Cost of Living Payment from the Department for Communities / DWP. However, if you also receive a qualifying disability benefit, you may have received a Disability Cost of Living Payment in September 2022.

Can I refuse a rent increase? ›

Applying to challenge your rent increase

If you and your landlord can't agree on your rent increase you can ask a tribunal to decide for you - it's free to apply. You'll need to apply before the date your rent increase is due to start - you can find this on your section 13 notice.

Can my landlord increase my rent twice in a year? ›

For 'periodic' tenancies - rolling on a week-by-week or month-by-month basis - a landlord can't increase the rent more than once a year without getting agreement from the tenant first.

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