NB Power launches rebate program for landlords’ energy upgrades, prompting questions from housing rights advocates

NB Power has announced a new program that will provide rebates to landlords who invest in energy efficiency upgrades in their residential properties.

But housing rights advocates are warning that the program doesn’t guarantee benefits to renters and that landlords might use it as an opportunity to jack up the rent.

“At this stage, numerous questions remain unanswered,” said Nichola Taylor of ACORN, an anti-poverty organization with chapters across the country. “We need further clarification of the program and these questions answered.”

Landlords receive up to $2 million

Property owners can receive up to $2 million annually through the Rental Owners Rebate Program, with up to $500,000 per eligible project, according to the SaveEnergyNB website.

Non-profits are eligible for higher incentives than private owners and corporations, the Crown corporation said in a statement.

For example, participants can receive between $4,000 and $100,000 per unit for ducted air source heat pumps, depending on the capacity of the unit. Non-profits can receive between $5,200 and $130,000 for the same type of unit.

Eligible costs include not only the equipment but also costs such as external project management, disposal of materials replaced through the program, project inspections, fees for consultants, taxes, shipping and other costs.

Part of $25 million program

It’s financed by NB Power and the provincial government, NB Power spokesperson Elizabeth Fraser-McAllister said in response to queries from the NB Media Co-op.

The province provides up to $25 million annually for “a range of energy efficiency programs,” including the new rebate program, according to a spokesperson for NB Power.

“Funding for the program is determined through NB Power’s annual budget and regulatory process,” Fraser-McAllister added. “The amount spent depends on how many customers participate and the upgrades they complete.”

The program is open to property owners, including individuals, corporations, non-profits and government. Short-term rentals including “Airbnb-style accommodations” aren’t eligible.

Landlords and tenants benefit, says CEO

Lori Clark, president and CEO of the provincial Crown corporation, said the new Rental Owner’s Rebate Program “benefits both rental owners and tenants.”

“Property owners can benefit from the rebates and the increased marketability of their space that come with energy-efficient upgrades, while tenants can benefit from greater comfort and lower monthly power bills,” Clark said in a statement.

But one tenants’ rights organization expressed concern that landlords might use renovations under the program as a pretext for increased rent.

Benefits uncertain: advocates

“The program appears beneficial, provided that costs are not transferred to tenants, although this remains uncertain,” said Taylor, the advocate from ACORN.

Under rent control legislation in New Brunswick, landlords cannot raise rent by more than three per cent annually.

However, they can request permission from the Tenant and Landlord Relations Office for “above guideline increases” reaching up to nine per cent for “justified” capital expenditures for renovations of units.

“A significant concern is that if landlords utilize this program, they might impose these costs on tenants, which is unacceptable,” Taylor said.

She renewed calls for an energy rebate program targeting low-income people, an ongoing campaign for NB ACORN.

In response to queries, NB Power sent a statement.

“The Rental Owners Rebate Program is an energy efficiency program that helps offset the cost of eligible energy-saving upgrades in residential rental properties,” said Fraser-McAllister, the NB Power spokesperson.

“Decisions regarding rent increases are governed by the Province.”

No guaranteed benefits: researcher

Housing researcher and advocate Matthew Hayes also raised questions about the overall effects of the program.

“On the whole, this could be welcome news, especially as landlords increasingly offload electricity and heating charges to tenants,” Hayes said in an email. “However, there is also no guarantee this will benefit tenants.”

For example, he noted that participation in the program is voluntary — landlords who aren’t already covering tenants’ energy costs as part of lease agreements will have little or no incentive to join the program.

On the other hand, for landlords who currently assume those energy costs, he said, “this will potentially mean more revenue for them, but nothing that requires them to pass on part of the savings — paid for by the public — to tenants to help keep costs lower for them.”

He pointed to the press release announcing the program, which suggests that landlords will benefit from “increased marketability.” That could mean that landlords will be marketing their properties to higher-paying tenants, Hayes said.

“So either through energy savings or higher rents, the incentive is higher revenue for landlords, with no guaranteed benefit for tenants,” he said.

He added that more generally, increased rental revenue is likely to drive up property values, resulting in higher property taxes across the board.

“The intention is good, but the ambition is very low if we are thinking about housing affordability,” he said.

Asked to comment on criticisms from the researcher, NB Power provided the following statement: “While energy savings are one benefit, this program also helps encourage investment in upgrades that improve the overall quality, efficiency, and comfort of those homes.”

The NB Apartment Owners Association didn’t respond to requests for comment.

David Gordon Koch is a journalist with the NB Media Co-op. This reporting has been made possible in part by the Government of Canada, via the Local Journalism Initiative.