Permanent rent cap not in the cards right now, minister says

The New Brunswick cabinet minister who oversees issues related to apartment rents says making a rent-increase cap permanent wouldn't be a "balanced approach" and isn't in the cards right now.

Service New Brunswick Minister Mary Wilson presented Bill 96 this week to amend the province's Residential Tenancies Act. The proposed amendments would limit rent increases to 3.8 per cent — but only for 2022. 

Green Party Leader David Coon proposed three amendments to the bill, to address the loopholes some landlords are using to get around the rent cap. His amendments were voted down.

Coon said tenants will suffer as a result, and also called on the government to make the rent cap permanent.

Responding to this Friday, Wilson said implementing a permanent rent cap would deter development.

"New Brunswick is experiencing a growing population, a white-hot real estate market, as we all know, low vacancy rates that we've never seen before, and increased costs," she told Information Morning Moncton. 

"We need to take a balanced approach during these extenuating times to ensure tenants are protected while increasing housing supply."

There are 38,000 plus rental units in New Brunswick, and in Fredericton alone, 40 per cent of residents rent. Before the rent cap, CBC reported on people receiving rent increases of hundreds of dollars, some with increase notices of up to 55 per cent.

A fundamental disagreement

At the centre of the rent-cap debate is the impact of such tenant protection on the economy. The province says rent caps deter development, and tenants' rights activists says it does not.

"Rent control is not going to decrease the profitability of new-build apartments, which are in demand right now," said Matthew Hayes, the New Brunswick Tenants Rights Coalition spokesperson.

He said the idea that rent control deters development is "balderdash."

"Actually what's needed here is for the government to take a more proactive approach to ensure that there's adequate construction of … new affordable housing, and that the existing stock of affordable housing is protected," he said.

Wilson said all economists think otherwise but she did not provide the source of this information.

"The one thing they can agree on is that rent caps don't solve the affordable housing and low inventory problem and actually, in many cases makes it worse," she said.

Tenants suffer

Hayes said the proposed legislation is not good enough at protecting tenants and is not balanced.

He said some tenants have already lost their homes.

"They were told, 'You are going to pay the increase, and if you don't want to, you're going to get evicted'," he said. "That's the state of the power imbalance in this province. ... It's something that really needs to shift."

Currently, the Residential Tenancies Board only gets involved in so-called renoviction cases if the tenant makes a complaint. Hayes said some tenants are afraid to challenge eviction or rent increase notices.

One of Coon's voted-down amendments was to force landlords to apply to the board if they want to evict tenants to do extensive renovations. 

Wilson said this, too, would deter developers.

She said the new legislation does add a requirement for landlords to provide "a just cause" for evicting people. She did not elaborate on what "just cause" means.

Wilson said to balance out the temporary rent cap, the province is attempting to improve affordable housing. 

The province runs a program that gives financial assistance to private entrepreneurs, private non-profit corporations and co-operatives.

The developers will get this provincial money if they prove their projects will include units that would rent at or below average market rents. 

Wilson said the province is not closing the door entirely to extending the rent cap.

"We're monitoring what's going on right now. We're going to have early indicators. Is it getting better? Is it not getting better?" she said.  "If we feel it's necessary, we will look at doing that again."