ANALYSIS: Conservatives went sideways on housing as tenants got organized in 2022

Up until 2022, public debate about housing in New Brunswick was dominated by landlords. While tenants made only modest gains on the legal front this past year, they took the conversation back, and began a more constructive debate about how we are going to climb out of the deep affordable housing crisis we have inherited from successive Liberal and Conservative governments.

This is not to say landlords didn’t have a great year. After all, they won a huge 50 per cent provincial property tax cut, worth in total at least $45 million in public funds every year. This whopping tax cut benefited the largest landowners most —  the ones who have done the most to game local property markets for investors — and it pairs poorly with the other major housing announcement of 2022: the temporary rent cap which was ostensibly supposed to protect tenants.

The result of this mismatch may be a pyrrhic victory for the landlords. No other policy issue has contributed more to the collapse of support in the Higgs government. On housing, one poll put his disapproval rating at 92 per cent — richly deserved for a government apparently unable to even appear to be doing anything that might go against its landowning donor base.

This was a government that asked its top civil servant, Cheryl Hansen, to conduct a “review” of the rental market situation in the province in February 2021. Its report, released in May that year, said that there was no affordable housing crisis — exactly the result the Premier had called for. And then the rest of the year was a series of bad headlines about tenants losing their homes to double-digit rent increases.

And so 2022 kicked off with a government behind the eight ball on the housing situation, having bet the issue would go away, as it had in the past, and underestimating the extent of the challenge developing below its feet — despite solid advice from civil society groups of the need to act.

A year of half-measures

The New Year brought new half-measures that had been announced at the end of 2021, which threw a few crumbs at tenants to try to make the crisis go away. Rents could only be increased once per year and notices of rent increases were extended from three to six months.

That latter provision makes New Brunswick the jurisdiction with the longest notice time in Canada, but it provides tenants with very little additional protection against rising rents.

March was budget month, and the Conservatives used it to demonstrate they were trying to do more than nothing to counter an increasingly visible, full-blown affordable housing crisis.

Backtracking on their position from late 2021, the government finally admitted they needed to bring in rent control. But they refused to make it permanent. They announced a retroactive (to January 1), one-year “rent cap” of 3.8 per cent, the rate of inflation for 2021. By March, some people who had already been served large rent increases had already lost their homes.

But worse, the government botched the announcement. The rent cap measure required new legislation that would not be introduced and debated in the legislature until June. By the time it passed, inflation in Canada was above eight per cent, and landlords had resorted to informal mechanisms to get higher rents.

Some simply increased rents by more than the 3.8 per cent cap and dared their tenants to take a complaint to the Residential Tenancies Tribunal. Tenants understood if they did, and they won, they might face the same fate as the Trambles from Shore Street in Fredericton, who lost their home of 33 years when they were renovicted in September, following a Tribunal ruling in their favour in late 2021.

But this was not the only thing some landlords did. Others simply told their tenants the rent cap failed to pass in the legislature, or that it was not the law. Vulnerable tenants with little access to or contact with local media sometimes fell for the trick, costing them hundreds or even thousands of dollars in additional rents.

Perhaps the most frequent mechanism for getting around the rent cap was renoviction. Landlords actively and openly sought to evict tenants so they could find new ones who were not covered by the rent cap, and who would be forced to pay higher rents.

This led to a wave of renovictions through the spring and summer, the actual number of which will never be known, because the Tribunal keeps no statistics on this type of tenancy termination.

Many tenants lost their homes waiting for the June law to come into effect, being non-renewed on their leases, or evicted for short-term rentals in addition to renovictions. Until June of last year, tenants who had rented their homes for less than five years could simply have their leases non-renewed, effectively ending their tenancies. This was another route to informal eviction.

If there is one bright note to all the non-action from the Higgs government in 2022, this is it. The June reforms, while paltry and insufficient, nonetheless and for the first time gave tenants who had lived in their apartments for a year the same tenuous right to their homes that they used to have to wait five years to acquire.

Many New Brunswick landlords would get around those protections by non-renewing tenants before the five-year period came up. This gave landlords more control over what they see as their private property. Normally, it would take the form of an exorbitant rent increase.

But since 2015, some New Brunswick landlords also began posting their vacated apartments on Airbnb. There are still practically no local or provincial restrictions to Airbnb use in New Brunswick, despite its continued growth. How many more homes will move to the short-term market before municipal and provincial governments act?

To cap rents or not to cap rents?

By fall, it was increasingly evident that the Higgs government had no intention of extending the rent cap beyond December 31. Their major announcement to ostensibly control rental inflation was to decrease property taxes levied on landlords.

The tax cut was coupled with the paltry announcement that the Department of Social Development would receive $102 million in funding to build 380 new social housing units and renovate an existing 110 units. The new units, while welcome, won’t begin to make up for the additional 4,000 plus households who have been added to the social housing wait list since Cheryl Hansen released her report.

Moreover, with the private sector hogging all the construction resources, it was difficult to see how this social housing construction would take place in a timely enough manner to have much of an effect on the affordability crisis.

The inaction of the provincial Conservatives in 2022 has made a tight rental market into a social catastrophe affecting thousands of low-income households.

And the disaster only got worse as the fall wore on. A new minister, Jill Green, claimed, falsely, that the rent cap had reduced investment in new construction of rental housing. Inventing data that in no way reflected official statistics, she announced that on January 1, there would be no rent cap.

Landlords bent over backwards to provide political cover to Minister Green. Claiming the private sector was needed for the rental housing sector (but is it really?), NB Apartment Owners Association president Willy Scholten said record housing starts in 2022 did not reflect the long-term decision-making of firms looking to capitalize on the generational shift amongst middle-class older adults to downsize in third age into apartments. Sometimes apartment owners make excellent arguments for the socialization of housing, even when they are not trying to.

Instead of rent control, Green presented a complicated new provision in the Residential Tenancies Act that requires tenants to complain to the Residential Tenancies Tribunal in instances in which rents are increased above the inflation rate (this year, that rate will be somewhere around seven per cent — far more than what most workers saw in terms of salary increases).

In the event that the Tribunal agrees with tenants (in 2022, they only agreed in 53 of 376 cases), rent increases deemed “unreasonable” can be spread over two years or even years years. One measure of reasonableness is the rate of inflation, but the legislation remains opaque in terms of how the Tribunal might make its decisions.

The new legal provisions may provide landlords with incentives to intimidate tenants into accepting large increases, or, worse, actually game the system, betting on a large increase being postponed over three years. This incentivizes very large rent increase notices early on.

Rent Wars Episode 4: A New Hope

So given that tenants can expect big rent increases in 2023, what can they hope for?

First, if we look back a year, the obduracy of the government to adopt rent control faded in the face of large rent increases and stepped-up public pressure. The government will face intense pressure to take emergency action again this year, but this time, they will have to face the music of having cancelled the measure they had in place (based on false data).

Any tenant receiving a big rent increase this year (big is a subjective number, but certainly anything above seven per cent) should not take such an increase lying down. Talk to your neighbours, reach out to ACORN and the NB Coalition for Tenants Rights, organize, make noise. Refuse to go silently into the night — if not for yourself, then for your neighbours, or for future tenants who will live in your home in the future.

While the protest at 91 Main Street on Fredericton’s north side last February was small in terms of numbers, it made the front page of the Daily Gleaner, and it moved the political discussion. It may have single-handedly brought about the temporary rent cap announcement, because it was a level of public pressure that had not been seen before. All it took was a handful of people on the side of a road — the public supports tenants facing eviction.

Second, the next Conservative leader is likely also to emerge in 2023, and they will want to mark some distance from their predecessor. In recent polling, no other issue demonstrated the level of dissatisfaction in the government than the housing issue. While Higgs has missed the bus on at least a half dozen other major policy issues (French immersion, the pandemic and health care, to name the most obvious) it was his callous approach to housing that sunk his popularity: 87 per cent think he is doing a poor or very poor job. Only seven per cent think he is doing a good job, lower than on any other issue. Let that sink in.

Third, your landlord is sitting on a big tax cut in a year when households are being squeezed by rising inflation. Many homeowners are also facing rising bank payments (essentially rent to the bank), and help for them — and for tenants —  is going to compare in one way or another with help offered to landlords in 2022. A lot more is going to have to be done, or the “inflation crisis” is going to be read more and more through the prism of housing, where Conservatives all across the country (including the ones standing in with Liberal parties) stand to lose credibility in a big way.

Happy New Year to tenants in New Brunswick. They deserve a better year than 2022, but 2023 is going to be challenging. Hang in. We are going to win rent control and protections against renovictions. It is just going to take a bit longer than we want.

Matthew Hayes is a member of the NB Coalition for Tenants Rights and a Canada Research Chair in Global and International Studies in the Department of Sociology at St. Thomas University.