Given the state of homelessness in Nova Scotia and just how many Nova Scotians are without an affordable, safe and good quality place to live, there is very little provided in the Nova Scotia government’s recent Throne Speech, with a statement that a plan is forthcoming.
We hope that the government draws on the Housing for All Report in the development of its plan. We outline what the critical elements of such a plan must be.
First, an effective, permanent rent control policy must be implemented. If this government chooses to allow the rent cap to be removed in February, or when the state of emergency is lifted, when vacancy rates are still so low, it will directly contribute to large-scale evictions that may follow when people cannot pay their rent.
We propose limiting rent increases to the rate of inflation, with provision for upgrades and repairs. That would still allow developers to count on a stable income stream.
The literature quite clearly shows that rent control enables current tenants to remain in their home and to experience housing stability and economic benefits from not having to face unlimited, annual increases to their rent. Without rent control, increases in tenants’ income simply can’t keep pace with increases in shelter costs. Many Nova Scotians are engaged in precarious and part-time work, the minimum wage is far below the living wages and social assistance rates are below the poverty line.
We know that many current renters have low income and struggle with housing affordability: 24% have household income below $20,000 (versus 6% for homeowners), the median annual income of renters is $39,550 (versus $75,939 for homeowners) and 28% of renters are in core housing need.
It is also important to use an intersectional lens here: women are more likely to experience poverty and face housing unaffordability than men, and Indigenous renters have a higher rate of core housing need.
Comparative research on poverty and social policy has found that Nova Scotia has the highest rate of child and family poverty in the country and that our social assistance rates are among the lowest.
In addition, some who study rent control recommend that the government close the gap (and annual increases in the gap) between what renters should pay and what market-based landlords charge. That could be done via a renter’s assistance program in lieu of rent control. However, the province’s current program is neither universal nor large in scale.
A system of rent control would also provide the opportunity for tenants to benefit from similar policies that have been offered to others in this province and that contribute to managing increases in household expenses.
For example, although the median income of homeowners in this province is much greater than that of renters, homeowners who are not purchasing new property are provided with capped property assessments. That means increases in these assessments, which are used for property tax purposes, can only be raised as much as the consumer price index (and note the annual capped assessment rate for 2021 is less than 1%). Those living in land-lease (manufactured home) communities are also provided with rent control in the province, which is limited to 1.9% in 2021.
For renters faced with housing in need of repair, a strengthened and provincially funded system of provincial housing inspectors is needed, since this is done inconsistently by municipalities. Provisions for allowable amounts for repairs and maintenance can be incorporated into the Residential Tenancies Act, just like it is for those in land-lease communities. Provisions for the cost of repairs is a common component of rent control policies in other jurisdictions.
To address the renovictions issue, rent control should be tied to the unit, which means it remains in place even when the tenant moves and thus removes the incentive to end the tenancy agreement. Under the current temporary program, landlords can find a reason to evict and then increase the rent as much as they want for new tenants.
This also points to the need to strengthen how illegal evictions are addressed in the province by providing greater provincial investment in legal aid services and tenant organizations. Further, data need to be made publicly available on the number of evictions that occur in the province, where they are occurring, and for what causes.
Remove the profit motive
Building truly affordable rental housing for low- or even moderate-income households is not profitable for private sector developers and, thus, rents in new market builds are too expensive for the majority of renters. Addressing these supply issues will not be solved by removing rent control as is claimed by some.
A number of important strategies are available to address the supply of affordable rentals in Nova Scotia. As is outlined in the Housing for All report, one tool is to limit conversions to condominiums. A second tool is to restrict short-term rentals to owner-occupied dwellings, since these rentals remove a significant number of units from the marketplace and since many short-term rental units in places such as Halifax are supplied by commercial operators rather than homeowners renting out unused space.’
Most importantly, it is critical that the government makes a targeted and large-scale investment in affordable housing units delivered via the not-for-profit, cooperative and public sectors (33,000 units in total). Studies show that these types of providers charge lower rent compared to market-based landlords, make a commitment to housing affordability after agreements to provide affordable housing with governments expire, and embed programs and services for tenants.
Such an investment, in addition to rent control policies, would help curb the financialization of rental housing as well, whereby real estate investment trusts purchase rental units, raise rents, and introduce new fees in order to maximize profit. With such a large percentage of rental housing stock already in the private market, this is a concern that must be heeded.
What we outline here reframes this discussion from the privilege to profit off of housing to the right to access affordable, accessible housing, for all Nova Scotians. Surely, it is the role of government to ensure the latter.
Catherine Leviten-Reid, Cape Breton University and Christine Saulnier, Canadian Centre for Policy Alternatives-NS are co-leads of the Housing for All Working Group