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.
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.
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.
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.
Information Morning – Saint John21:25Housing issues in N.B.
Soaring rents. Property tax hikes. Low vacancy. The housing picture in New Brunswick isn’t pretty. So, what do the parties have planned to improve the situation? Rachel Cave speaks with folks in the housing sector about the promises and what policies they want to see to make housing more affordable.
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.
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