The Conservative Party’s housing plan, announced June 29, needlessly prolongs insecurity for tenants and continues the province’s quick march into unaffordability.
Couched under four pillars that do nothing to alleviate the lack of security facing tenants, the plan reads as a response to all the major demands landlords and developers have asked of the government.
There are measures that will help people. A rent bank, for instance, aims to keep 750 people housed, although by its nature, it will do little to address the unaffordability of housing. Twenty-two million dollars is announced over three years to help tenants in unaffordable housing situations, but here too, the subsidy encourages landlords to continue to jack rents, including on the most vulnerable tenants.
The measure is intended to reduce the wait list for social housing from 11,000 households to 7,500 by 2026, after the next election. One cannot have much confidence in this measure. But moreover, it is a shocking figure.
The Higgs government’s 2021 “Review of the Rental Market Landscape in New Brunswick” claimed there was no affordable housing crisis. Social service providers, however, were alarmed at the growing wait list for social housing, then numbered at 5,700. Just last fall, that wait list had ballooned to 8,700. Its continued expansion is a great example of inaction in action.
Where is the public interest in affordable housing?
Missing from the report is any mention of the province’s interest in maintaining its affordable housing stock.
Statistics Canada reported last month that 37 per cent of the province’s rental households were paying unaffordable rents in 2021 — defined as more than 30 per cent of their incomes. For households earning under $30,000 a year, the situation is even worse: 62 per cent live in unaffordable housing.
So, more affordability has to be an important goal of public policy, even if the stock of housing itself is privately owned.
New Brunswick lost on average 33 units of affordable housing every week between 2016 and 2021. This is the result of private strategies of increasing rents and using higher cash flows from rental properties to justify higher property appraisals, which are used to renegotiate mortgage loans.
Without rent control tied to units, New Brunswick will continue to lose affordable housing units at a tremendous pace, and the public will be asked to foot the bill for either emergency housing measures, or the construction of new affordable units (those 33 units we lose every week cost between $8 and $10 million to replace — a year without rent control may cost more than the entire value of Housing Minister Jill Green’s three-year housing plan). The future public liabilities for housing are daunting.
Increasing housing supply
The main emphasis in Minister Green’s plan is on increasing the number of private market housing starts to 6,000 per year over the next three years — a truly herculean target. This, we are told, will help balance supply and demand, and allow New Brunswick’s housing sector to catch up to population growth.
Commenting in the Telegraph-Journal, Colpitts CFO and chair of the NB Apartment Owners Association Willy Scholten noted the 6,000 target will be hard to meet, and that it is still short of the 8,000 unit record met in New Brunswick in the early 1970s.
That figure may seem staggering by today’s standards (2022’s record number was about double 2019’s starts, and would have to almost double again to pass 8,000).
But the difference between then and now is the role of government. In the 1970s, the federal and provincial governments financed almost half (that is right, nearly half) of new housing starts, either directly or indirectly.
For a historical perspective of government role in housing, check out the 1987 report by the Minister responsible for the Canada Mortgage and Housing Corporation (see Figure 4, page 4) or any of a plethora of histories of Canadian housing policy, including Greg Suttor’s Still Renovating: A Social History of Canadian Housing.
Governments also built far more deeply affordable, rent-geared-to-income units, including 137,000 social housing units between 1975 and 1982 — a similar period of high interest rates and inflation — tens of thousands more than what was committed by today’s federal National Housing Strategy in a country double the size of 45 years ago.
The main barrier to building more housing supply — the availability of labour — is not a small one, especially in a province that lacks affordable housing to receive more new Canadians who might help to build it.
Many new Canadians rely on more affordable housing options when they first arrive in Canada, and New Brunswick is uselessly throwing them away to wealthy investors—at the rate of 4.7 units per day. This will, obviously, reduce our ability to continue to grow our population.
A better housing plan
A better housing plan starts with legislation making rent control tied to rental units permanent. The government’s stated goal of keeping rental increases close to 2.5 per cent sounds good here. That would make subsidies for tenants in unaffordable housing situations and rent banks seem much more effective, because it would address the underlying causes of unaffordability.
Why start with rent control? Because it is the fastest, cheapest way to make sure the situation doesn’t get any worse than it already is. It is a lever that is well within our grasp.
Rent control tied to units is still not a “silver bullet” for the affordable housing crisis — it won’t build new affordable units. That takes new public investment. The NB Housing Corporation should be given a budget to acquire and build new units, to expand the stock of public and non-profit housing which can remain affordable for the long-term.
The affordable housing crisis may seem daunting and complicated, but in many ways, it is not. Over-reliance on the private sector and deregulation are its root causes. There are workable fixes ready at hand that don’t have to cost billions of dollars. But if we don’t take them up, we will be paying billions more than we have to.
Matthew Hayes is a spokesperson for 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.
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