Tenants seek answers on how rent cap will work

When Jason Stephenson heard that the Higgs government was bringing in a rent cap for apartment dwellers and other renters, he had just one question: How will it work?

The Fredericton resident got a notice from his landlord on Feb. 1 that his rent would increase on Aug. 1 by 11.2 per cent — way beyond the 3.8 per cent permitted under the new cap, announced Tuesday.

"My first question was, what's going to happen to this increase?" Stephenson said Wednesday.

"Am I going to get a smaller rent increase? Are they going to try to keep that? I don't know."

Stephenson said his landlord blamed the increase in part on rising property taxes. But the new provincial budget released Tuesday also includes a cut to property tax rates on apartment buildings by 50 per cent over the three years.

"That sort of blows that [rationale for an increase] out of the water," Stephenson said. "And yeah, so my first question is what's going to happen to this?" 

The cap is retroactive to Jan. 1, so any rent hike on that date or since must comply.

Service New Brunswick Minister Mary Wilson did not speak to reporters Wednesday, the second straight day she was not available to comment on a major policy change from her department.

A spokesperson said in a late-afternoon emailed statement that tenants who've been charged more than the cap can deduct the overpayment from their next month's rent and then pay the amount equivalent to the 3.8 per cent increase.

Tenants with "questions and concerns" can contact the Residential Tenancies Tribunal, said spokesperson Jennifer Vienneau.

Tribunal not a 'tenant-friendly' process, resident says 

Stephenson said he dealt with the tribunal once before and it's not a very "tenant-friendly" process."

"There's a lot of bureaucracy involved and some landlords with deep pockets, they can bury a tenant in bureaucracy to a point where the tenant just throws their hands up and gives up."

New Brunswick's apartment vacancy rate plunged from 3.1 per cent to 1.7 per cent last year, according to the Canada Mortgage and Housing Corporation, the steepest drop in the country.

That has helped fuel large rent increases for many tenants.

• Rent cap for tenants, tax cut for landlords unveiled in budget 
• N.B. landlords, tenants groups pan property tax cut

Stephenson, who lives with his wife and two cats in their apartment, says he can afford the $110 rate increase but he'd rather spend the money on other needs. 

He also said he's not going to force the issue with his landlord yet because he wants to give him the benefit of the doubt regarding adjusting the August increase.

Premier Blaine Higgs said Wednesday he believes the cap won't require passing a bill in the legislature and can be implemented with a regulatory change approved by his cabinet.

But "it's in effect now, one way or the other, regardless, because it will be retroactive to Jan. 1," he said.

Higgs opens door to extending cap's end date

The province says the cap is for one year only, but Higgs opened the door Wednesday to extending it.

Under earlier changes adopted by the Higgs government, landlords must now give tenants six months' notice of a rent increase.

That means renters could start learning as early as this July of bigger rent hikes in 2023, when the one-year cap would no longer be in effect.

Higgs said if the province hears about tenants getting notices in July of large increases, "that would be a reason to look at continuing rent control, because that's what we want to avoid as we go through this supply issue." 

Service New Brunswick said the cap will apply even to apartments that have undergone large capital renovations.

The premier shrugged off complaints from a tenants' rights activist that the cap wasn't enough and from an association of landlords that the cap will wipe out any gain for owners from a cut to the property tax rate for apartment buildings.

"My first response is we must have got it right, because it's a balanced approach."