Apartment vacancy rates fall to nearly zero in some N.B. communities

Help for New Brunswick renters is being considered as part of next month's provincial budget, with even rent control of some kind coming up in deliberations, according to Social Development Minister Bruce Fitch.

"The last chapter is not written on this whole file," said Fitch in an interview Wednesday

Asked if the province might reconsider its opposition to rent control, given a new national survey that shows apartment rents rising faster in New Brunswick than in any other province and vacancy rates shrinking to almost nothing in some communities, Fitch did not dismiss the idea.

Instead, he acknowledged government "staffers" had met with landlord and tenant groups "to see if there's a way forward on something like this."

He would not say whether a consensus was reached or change will be coming as part of the budget.

"I'm not going to give anything away that could be there," he said

"It's a subject that's very, very important to this government and the last chapter is not written."

The plight of New Brunswick tenants has surfaced again following the release of a comprehensive national survey about apartments by the Canada Mortgage and Housing Corporation.

In a good news-bad news snapshot of New Brunswick rental markets taken in October, the report found the average cost of a two-bedroom apartment in the province had risen to $969 per month.

The good news is that's $198 below the Canadian average for a two-bedroom apartment. The bad news is it is 15 per cent higher than the average in New Brunswick two years ago – the largest increase recorded among provinces over that period.

More startling is a rapid drop in New Brunswick apartment vacancy rates, which the survey found dropped from 3.1 per cent in 2020 to just 1.7 per cent in 2021.

Included in those numbers are Miramichi and Campbelllton, where the number of vacant apartments dwindled to a barely detectable 0.3 per cent in each community.

In the case of Miramichi, only three of the city's 1,026 apartments were unoccupied and available to rent at the time of the survey. That's down from 41 available units last year.  

Gail MacDonald, who has been looking for a place in Miramichi for most of the winter, believes those numbers are accurate.

MacDonald received notice of a $200 rent increase on her Miramichi apartment in early December, but has been unable to find anything else to even look at and is preparing to pay the increase come March.

"It is true," she said of the study's findings.  

"There's nothing in Miramichi. The only thing I see are rooms." 

Housing demand in New Brunswick increased during pandemic

New Brunswick rental markets have been chaotic for more than a year.   

Demand for housing has increased significantly as more and more people moved to the province during the pandemic.

That has led to apartment buildings being bought and sold in large numbers by investors, who in some cases have attempted to raise rents on even long-term tenants by 40 per cent or more.
  
Kelvin Ndoro, an economist with the CMHC, said an influx of people into New Brunswick during the pandemic raised demand for apartments generally.

It also increased the cost of buying a house in the province and made it harder for people to leave rental units for home ownership.

Listen to how one New Brunswick community is planning to increase its housing vacancy.

Ndoro said both events have driven vacancy rates down and put upward pressure on rents.

"We have some of the lowest vacancy rates in the country in Atlantic Canada and that translates into higher average rent increases and more demand for these apartments," said Ndoro.

According to the CMHC, average provincial rent increases for a two-bedroom apartment in 2021 were the largest in New Brunswick and Nova Scotia, at 4.6 per cent.

In New Brunswick, average rents were up 6.4 per cent in Saint John and  8 per cent in Miramichi. That's even without including many significant rent increases, such as the one MacDonald received, which wasn't included in the October study because it doesn't take effect until March. 

Matthew Hayes, who is with the New Brunswick coalition for tenants rights, said the migration of people into New Brunswick is a positive development.

However, he said the low vacancy rates and higher rents chain reaction it helped trigger should be managed by the province, with some controls on rent increases.

"There would be low vacancy," Hayes said, "but it wouldn't be the crisis that it is."

Fitch is not committing to that, but in a change of tone from earlier interviews, he is not entirely dismissing the idea either.

"It's no secret that people are finding the market very, very tight," he said, and government has taken note of "all these announcements of landlords increasing their rents."

"(We're) trying to find the pathway forward that helps the most people here," said Fitch. 

"As the budget approaches, we'll have to finalize some decisions on some very big files such as this."