Halifax tenants facing rising living costs worry about looming end to rent control

The Liberals introduced a two per cent rent increase cap during the pandemic as a way help residents who were in financial trouble

HALIFAXtoday \  Canadian Press

HALIFAX — For Halifax residents like Matt Whalen, the looming end of pandemic-era rent control in Nova Scotia signals that even middle-class people will struggle to find affordable accommodation in the months to come.

“I make a good salary, but rent is half of my gross income and it’s only going up,” the digital marketing specialist said in a recent interview.

“We’re very quickly becoming a city that caters only to the wealthy.”

For the 33-year-old, the bad news came in December, in the form of a two-page letter from the property manager of his unit. His landlord said that once the two per cent cap on rent hikes is lifted, his rent would rise by about $100 a month.

Former Liberal premier Stephen McNeil set a two per cent cap on rent increases in November 2020. The cap was retroactive to September of that year and is set to expire in February 2022 or when the COVID-19 state of emergency in the province is lifted — whichever comes first.

Whalen is one of many Nova Scotians raising concerns about the quick inflation of rent. Global News reported last week that one Halifax resident was informed the day after the Aug. 17 provincial election that rent on his two-bedroom would rise from $790 to $1,650 — a 109 per cent hike — once the rent increase cap is lifted.

Whalen, meanwhile, was told by his landlord, POLYCORP, that the company had canvassed comparable buildings on the peninsula and found its units were “well below market rates.” Effective May 1, his rent would rise to $1,565 from $1,465, but in light of the rent cap, the increase would temporarily be about $30 a month.

“They sent that during the height of the pandemic,” Whalen said. “One thing was just the callousness of the message and the timing was quite unfortunate, but then the other part was the clear disregard for the spirit of the legislation.”

POLYCORP was not immediately available for comment.

Rent control and housing have quickly become an issue during premier-designate Tim Houston’s first week in office. The day after he was voted into power last week, protests broke out in Halifax against a police operation tasked with removing a series of homeless encampments. Halifax police said 24 people were arrested in connection with the protest.

Houston told reporters earlier this week he didn’t believe in rent control as an answer to the larger housing issue in Nova Scotia. “The solution to a housing crisis is more housing,” Houston said. “I think there’s lots of ramifications of rent control that are actually not productive to adding housing stock.”

Houston mentioned the Nova Scotia Affordable Housing Commission, which in its most recent report was also hesitant to call rent control a key strategy to address the housing crisis. The Commission said the cap on rent increases should be lifted in the time outlined by the province. It also recommended that when rent control ends, the government should offer temporary assistance to some low-income households.

Tris Winfield, CEO of local real estate investment firm KKT Investments, echoed Houston’s point in a recent interview.

“It’s easy,” Winfield said, “you build more, you raise the supply, you move the restrictions on supply. And as a result of more supply, well, you have more units being built.”

“Guess what prices will be? Guess what rent will do? It will fall.”

Rent control as a public policy has proven to be flawed, he added, causing enormous growth in demand but stifling growth in supply.

“Because the landlord is going to have a greater selection, there’s a much more competitive tenant situation with rent control, where the landlord has more choice,” Winfield said, adding that the policy negatively impacts lower-income tenants.

There’s also the matter of the increased cost of property maintenance, said Kevin Russell, executive director of the Investment Property Owners Association of Nova Scotia. Property investors, he said in a recent interview, may be facing expense issues when it comes to maintenance.

“Currently, the two per cent rent cap is in place. However, expenses are running at about four, four and a half per cent on an ongoing basis,” Russell said. “There’s a lot of landlords struggling with the rent control in place as it is, so they’re making decisions to put off capital investments into the property to upgrade the property.”

Lisa Roberts, the federal NDP candidate for Halifax, said in an interview Thursday rent control is well-suited to address the city’s housing woes.

“Investing in real estate doesn’t necessarily result in more stock,” Roberts said about property owners who buy old buildings, renovate them and increase rents.

“I feel sometimes that we’re cutting off our nose to spite our face in protecting the interest of owners, not recognizing that there are costs to the economy.”

Whalen said he has doubts whether more housing will solve the problem of unaffordable rent hikes for ordinary citizens. He said he suspects property managers may take the opportunity to charge “as much as the market will bear.”

And he said he’s not sure if he will remain in the apartment he currently lives in but hopes to stay on the peninsula if he can.

“That’s where my friends and my life is,” he said. “I don’t think I can stay even at a $100 (increase). It’s not ideal, but there’s there’s no place to go right now.”

This report by The Canadian Press was first published Aug. 26, 2021.

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This story was produced with the financial assistance of the Facebook and Canadian Press News Fellowship.

Danielle Edwards, The Canadian Press