More action needed to address N.B.'s high prices and short supply of housing
Housing experts weigh in on what's missing in current policy
A rent cap, tax reform and funding for a broader spectrum of housing are three of the keys to solving New Brunswick's housing woes, according to people with close eyes on the sector.
"The crisis is continuing," said Julia Woodhall-Melnik, a housing researcher with the University of New Brunswick in Saint John.
Rents are up about 10 per cent in the last year, encampments have grown around cities and unaffordability has increased in rural areas, she said.
Woodhall-Melnik is in favour of a rent cap but said it should also apply when one tenant moves out and the next moves in. That's how a lot of the affordable housing supply is lost, she said. A tenant who was paying $700 a month moves out and the next who moves in is charged $1,100.
Julia
Woodhall-Melnik, co-director of the housing, mobilization and
engagement research lab at the University of New Brunswick, supports a
rent cap but says it needs to apply between tenancies, as well. (Aidan Cox/CBC)
More than 11,000 affordable units have been lost in the province in the past decade, she said.
Rising costs to blame, landlords say
Ongoing cost increases are the reason why rent is going up so much, said Willie Scholten, president of the New Brunswick Apartment Owners Association.
Property tax bills are going up 10 per cent a year, power rates are up 13.3 per cent this year, and water rates in Fredericton are going up five per cent next year, he said.
A rent cap would have a negative effect on the quality of housing, according to Scholten.
"I think if we put that in place, the problem is going be the only place that we can deal with that is in the maintenance of our properties. … What's going to come out of the equation is we won't be able to keep up with maintaining our properties and providing a good home for our tenants."
Scholten's group is advocating for tax reform as a way to lower building costs, and reduce uncertainty, to boost the housing supply.
Willy
Scholten, president of the New Brunswick Apartment Owners Association,
says tax reform would provide relief from rising costs that are driving
rent increases. (Submitted by Willy Scholten)
The property tax on apartment buildings is 1.47 times the Atlantic-Canadian average, he said, and neighbouring provinces don't charge provincial tax on building supplies.
Building has accelerated, Woodhall-Melnik acknowledged, but is still about 700 below the target of 6,000 units a year, set by both the Progressive Conservative government and the Liberals in the current election campaign.
A much larger supply of housing would be required in order to bring down prices, she said.
Mylène
Vincent, a housing development consultant, says non-profits and
governments need to step up to fund and operate affordable community
housing projects. (Submitted by Mylène Vincent)
A massive gap exists in the types of new housing projects getting started, according to Mylène Vincent of Pivot Housing Solutions, a New Brunswick-based development consultant.
"There's really no feasibility or business case to build housing that's affordable to households making anywhere between $35,000 and $60,000 a year, which is most people in New Brunswick," she said.
And current government funding programs only support projects for people living in deep poverty, with an income below $35,000, said Vincent.
"So, if there's no business case and no funding from the province to do that … no housing is being built in that income range."
Below-market-price housing now makes up less than three per cent of the province's housing stock, said Vincent.
That leaves 97 per cent at market rates, which most people in the province can't afford, she said.
Vincent would like to see governments start funding a broader range of projects, such as housing that is operated by non-profits.
Such developers may need help with building costs, but would be self-sufficient in the long-run through rental income, she said, and they'd be able to charge rates that are affordable to people with low to moderate incomes.
Woodhall-Melnik has called for a comprehensive assessment of housing needs in the province, which would look at the type of housing needed in various locations considering population growth and demographics.
She'd also like to see the current Residential Tenancies Act torn apart and rewritten so it represents a modern generation of renters.
"Our Residential Tenancy Act in New Brunswick is from 1973. There are discussions in there of, you know, what responsibilities you have as a landlord and a tenant when you're renting farmland to plow a field. … It's really, really old and it doesn't apply to the context of households that we have today."
One omission is that it doesn't apply to social-housing tenants, she noted.
That means they don't have the same protections even though they are paying 30 per cent of their income in rent, she said.
With files from Information Morning Saint John
13 min ago
One way to reduce the pain and angst between Landlord and Tenant is to have a standardized provincial L&T lease. This seems to work well for most difficulties here in BC. Does NB have such a document, and how well does it work?
Comment by Lorelei Stott.
20 min ago
rent caps tend to encourage and push builders in the opposite direction that we need, with caps in place higher end stock is built instead of affordable because % increase on higher rent is more lucrative to keep up with costs rather than the same % cap on lower rent which has the landlords going backward with their profits
Comment by David Amos.
33 min ago
The boomers who are selling their homes for big bucks can certainly afford the rent on an apartment
Reply by David Amos.
31 min ago
I hear even Higgy sold his house and is now living in its basement I wonder what his rent is
Reply by valmond landry.
27 min ago
a lot of boomers that sold their house before the pandemic didn't get big bucks sir.
Reply by David Amos.
24 min ago
content deactivated –
You should talk to my family or Higgy before you try to argue me Sir Hell my youngest brother even sold his car dealership
Reply by David Amos.
20 min ago
During the so called "pandemic" I had to pay 3 grand for a puppy and he lives with me rent free
Reply by David Amos.
just now
Did you flag my reply because I called you Sir???
Comment by Rich Hatfield.
1 hr ago
Ongoing cost increases are the reason why rent is going up so much, said Willie Scholten
Saya the man who owns half of Fredericton.
Feel free to set up your tent on any of his properties.
Reply by David Amos.
43 min ago
I doubt Willie would let me do so
Reply by Lou Bell.
2 min ago
Mr. Scholten is absolutely correct . Funny how most of those who deny the truth love to blame others and not just look in the mirror . Many of those apartment buildings that were sold were by owners who failed to raise rents while costs kept rising , and especially in the last few years . Now let's be honest , would you invest in a business where , as costs rise by more than 10 % a year , you're mandated to not increase the rents of your tenants ? So many love to criticize others but want no part of it themselves !
Comment by Fred Sanford.
1 hr ago
This is mostly a supply and demand issue. We have too many people chasing too few housing units. This will inevitably cause prices to go up. A rent cap is a foolish move. As Scholten says, that will just cause landlords to stop maintaining their properties.
Reply by Fred Sanford.
1 hr ago
A rent cap will also disincentize the contruction of new units making the problem even worse.
Reply by David Amos.
39 min ago
The price of lumber is astounding and the sales tax on it adds insult to injury
Comment by Max Ruby.
2 hrs ago
When property taxes keep skyrocketing for landlords and homeowners rents go up too. NB has the highest property taxes in Canada. If something isn't done huge corporations will buy up everything in this place because the people are getting taxed out!
Reply by MR Cain.
1 hr ago
I don't know how the property tax is calculated, but I do know what is included differs from province to province. Aside from that, why don't people appeal it instead of just complain?
Reply by David Amos.
46 min ago
Amen
Reply by Robert Holmes.
10 min ago
Our Landlord pays the equivalent of one month's rent per unit per year. Roughly 12% Rent Revenue. Seems about right.
Reply by Robert Holmes.
9 min ago
Cranbrook, BC
Comment by Bob Smith.
2 hrs ago
I'm sure that if taxes were cut as Scholten repeatedly asks for, he'd be doing interviews immediately afterwards touting all the affordable housing that will now be built. Snicker...
Reply by David Amos.
11 min ago
Ditto
Comment by SarahRose Werner.
2 hrs ago
"Mylène Vincent, a housing development consultant, says non-profits and governments need to step up to fund and operate affordable community housing projects." - I would suggest that in particular, governments need to step up to fund and operate public housing units, as they used to. Nowadays government seems to want to offload all too many of its responsibilities onto non-profits.
Reply by MR Cain.
1 hr ago
I understand that Sheppard and Green both made commitments to upgrade existing public housing and build some new ones. I know the feds have been working with the municipal governments, but I have not heard of anything from the Higgs government, not even seen a tender.
Reply by Garry Mackay.
58 min ago
0.631933% is the tax rate for a residence in Toronto. There is no place I know of in the province that low. The NB rate is applied to the perceived unrealistic sale value of a property. It has nothing to do with the tax rate or services provided or not provided. non occupied residence are taxed at double the rate (only NB does this). That is why there are so many trailers in rural areas used as cottages because there is no permanent structure to tax.
Until the tax rate is for serviced provided it will be unfairly applied.
Tim Hortons is not a multi million dollar building nor should the regional hospital that all our taxes paid for be the highest taxed building in the province. It should be exempt because it takes income tax to pay that tax.
I could go on however I think it all falls on def ears. IMO
Reply by David Amos.
8 min ago
I have been screaming about such things in 8 elections and nobody has heard me yet
Comment by Hugh MacDonald.
2 hrs ago
"Rising costs to blame, landlords say"
And no doubt they want a bigger return on their investments.
Reply by David Amos.
2 hrs ago
They have a point about taxation
Reply by SarahRose Werner.
2 hrs ago
One thing that we're seeing now is that new investors buy rental properties and expect the rents they collect to cover not only the interest portion of their mortgage payments but also the principal portion.
Reply by Max Ruby.
2 hrs ago
And the exhorbitant property taxes, I think landlords pay double.
Reply by MR Cain.
1 hr ago
Interesting read citing myths.
https://nbmediacoop.org/2021/04/13/is-new-brunswicks-so-called-double-tax-increasing-your-rent/
Reply by Vel Oakes.
47 min ago
And, they want that mortgage fully paid in just a few years rather than over the full 25 year term of the mortgage. Investing in property requires people to take a longer term view; too many can't see beyond the current year.
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