To hear the Conservatives tell it, any form of rent control—applied in six other Canadian provinces—will dissuade development and investment here.
The latest housing minister to state as much is Jill Green, also the minister for Service New Brunswick. On November 24, Green announced that the temporary rent cap put in place last June will expire on schedule on December 31.
Green has succumbed to her government’s general inability to base decisions on empirical evidence, a condition Premier Higgs calls “data my ass.”
In the process she has helped the Conservative government to court continued disaster for the province on the affordable housing file.
First, let’s dispel the myth that rent control deters housing investment. Where is the evidence? As Blaine Higgs told the Telegraph-Journal last week, his decision would be based on “monitoring the housing situation.”
But when we monitor the situation, it looks like the rent cap had very little impact. Canada Mortgage and Housing Corporation data on housing starts show New Brunswick is experiencing an unprecedented building boom. The number of apartments started in 2022 to the end of October already surpassed the level of 2020’s record 1970 starts and surpassed 2021 months ago.
Meanwhile, the upward pressure on rents—which accelerated faster in New Brunswick than any other place in Canada between 2020 and 2021—has pushed many New Brunswickers on limited incomes to the brink of financial disaster.
Homelessness is now a crisis for smaller towns and cities with limited resources to cope. In the three main cities, there is no shortage of evidence that the homelessness crisis has reached epic proportions.
The Human Development Council’s homelessness dashboard shows that in October, the number of chronically homeless in Saint John, Fredericton, and Moncton had reached record highs (433 people), up more than a third from last October. And winter is coming.
Despite multi-million dollar investment in emergency housing in all three cities and in smaller towns beyond, the homelessness population is growing—and it will continue to cost cities substantial sums of money.
That is not the only data we can look at to measure the stress facing New Brunswick tenants. While not all people who access food banks are tenants, most are. In March, food banks in the province were already seeing a 20% increase in the number of clients. Since then, it has reportedly reached 30%, about double the increase in neighbouring Nova Scotia, where rent control is in place.
Alarmingly, more older people are accessing food banks—a group usually protected from extreme poverty by public income supports like CPP and old age security benefits. But neither of these have kept up with the rising cost of rent, which makes food inflation even more difficult to manage.
The province’s decision to let landlords set the rents at whatever rate they want will only put more pressure on households at the margins in a tight rental market.
Rather than address these problems head-on, the province has preferred to cut taxes for landlords, with no guarantee the latter will pass savings on to tenants. Moreover, developers are not building affordable housing, but market housing, and rents start well above what the majority of New Brunswickers can afford.
Green is applying the same “data my ass” approach to government as her cabinet colleagues have in health care and education. The result in housing will be more misery in a province where one in five households were food insecure in 2021 (which in the long run will also increase health care costs).
Her reforms will make the affordable housing crisis worse, since they incentivize large rent increases up front, in order to beat inflation expectations for future years. If the thought was to constrain rent increases to inflation, why not simply impose a new rent cap and link it to the CPI (a rate that is far higher than adjustments to fixed incomes and wages)?
“Because it will deter development,” we can presume is the response. Baloney! Viable alternatives that will save the public money in both the short and long runs are available.
Permanent rent control is one such mechanism. But that alone won’t build more new affordable housing.
In addition to rent control and tenant protections, the province would be wise to reinvigorate NB Housing, and acquire older apartments that are in good condition and that remain affordable to build up a larger stock of affordable housing. As Fredericton’s Affordable Housing Strategy suggested (p. 23) it is much cheaper to buy current housing than to build new affordable units.
Moreover, buying existing stock enables you to deprive speculative investors of an asset they want to use to extract profit by increasing land values. That type of profit is called accumulation by dispossession (since it is based on increasing rents, which means taking wages and savings away from people who rent). It is the type of investment in housing the province should aim to discourage.
If we want these alternatives to become part of the housing reality in New Brunswick, a reality currently dominated by the perspectives of landlords and developers, tenants and workers will have to continue to come together to fight for them. We have data on our side.
Matthew Hayes is a member of the New Brunswick Coalition for Tenants Rights and a Canada Research Chair in Global and International Studies in the Department of Sociology at St. Thomas University.