The Coast: Rent Control+Alt+Delete
Posted November 28, 2014
Is it time for Nova Scotia to reboot tenancy rights?
Posted November 28, 2014
Kirk McKenna swings open the door to his Fairview apartment. Water trickles in the background. The sound is coming from a windowsill where several electric fountains with spinning, flashing lights circulate. In his 15 years of living here, McKenna has accumulated quite a few possessions—paintings, stacks of paper, boxes and bins, a six-foot-long fish tank that sits empty in the living room. He plans to fill it with African cichlids, popular aquarium fish that come in all sorts of colours.
McKenna, a baby boomer with dark bushy eyebrows under the brim of his black Philly Eagles cap (he’s not a fan, he just likes the hat), gives me the grand tour of his one-bedroom apartment.
“Everything is just frustrating here,” he says. Kato, a curious kitty with a soft black coat, follows us into the galley kitchen and mews for supper.
Kato’s owner points to the kitchen counter, which is missing large chunks. The fume hood over the stove is broken, too. He hears birds chirping in there. The bathroom is clean, but he says it has issues with water leakage and mold. He pulls the door of the bathroom cabinet and it comes off in his hand. In the bedroom, there are unpatched cracks in the ceiling where he says leaks drove him to sleep on the couch. The sliding doors on both closets have fallen off their tracks. McKenna shows me photos of deep cuts in his scalp—marks left by chunks of brick he says plummeted from the side of the building and hit him, knocking him down and spraining his neck.
McKenna says it’s “like pulling teeth” to get repairs done. His apartment continues to deteriorate, with the odd fix-up here and there, and yet the rent keeps rising.
When he moved in back in 1999, he was paying $495 a month. In October, the landlord gave him notice his rent will jump to $750.
The largest increase was in 2011. A few months after McKenna filed a formal complaint to the tenancy board, his landlord hiked the rent by a whopping $125—a move McKenna says was designed to bully him out.
But the residential tenancy officer—not a judge, but a low-level bureaucrat—who heard his case found no evidence of retaliation.
“There is currently no rent control in Nova Scotia and therefore, the landlord may charge any rent that they believe the market can bear,” the officer wrote, concluding the increase was valid.
It’s true Nova Scotia doesn’t have rent control now—but we did. The Rent Review Commission set a maximum allowable increase each year, and landlords could apply to go over that cap if, for example, they had splurged on repairs. But in a controversial move, the province wiped out the program in 1993.
Over the last couple years, especially following the big shipbuilding announcement in the fall of 2011, rent control has poked its nose out again in Halifax like an uncertain groundhog. Sue Uteck and Dawn Sloane, former city councillors for the south end and north end districts, brought up rent control in summer 2012 when their constituents complained of rental hikes as high as $400 a month. Uteck told The Chronicle-Herald at the time: “I don’t know if rent control is the answer, but how do you prevent these massive increases?”
In north end Halifax, Clayton Park and Dartmouth, rents have increased in recent years alongside housing prices. Residents in these neighbourhoods are worrying aloud about gentrification and so-called “renovictions.” As a solution, tenants’ rights advocates like to serve rent control up on a silver platter. But Halifax’s housing market has softened recently, and the vacancy rate has increased since 2012, leading critics of rent control to ask if it’s really necessary. One thing is for sure: there is no system in place to smooth rent increases, and landlords are able to set the rate at whatever they think is reasonable.
For McKenna, the answer to whether we need rent control is a wholehearted yes. The renter flicks the plastic ACORN badge on the right side of his bomber jacket. He’s a member of the Association of Community Organizations for Reform Now, which advocates for tenants’ rights.
His argument goes like this: It’s true retaliatory increases aren’t allowed, but it’s tough to prove that a landlord intends to push a tenant out of their apartment. Rent control, on the other hand, is a clear, concrete number.
“It would help somewhat, because say rent control was three percent per year, then they wouldn’t have been able to raise my rent,” he explains. “Yes, they would have been able to still get me a little way, but they wouldn’t have been able to raise it $125 in one shot.”
It’s not far-fetched to think management wanted McKenna out of the building. They certainly weren’t fond of him. He once called the fire department about the leaky roof—a move a small claims court adjudicator would later call “ill-advised.” The tenant says he was worried the ceiling would cave in.
Harold Marryatt, property manager for the building, says he’s always in his office at 8am and McKenna has never put in a work order for his apartment.
“He’s never come to me about anything to be done in his apartment,” he says.
The property manager was aware of the leaks in the apartment when the building had a roof problem, but said McKenna didn’t want anyone in his unit.
Marryatt confirmed the rent increases, but said they weren’t retaliatory: “Oh gosh no.” One-bedroom apartments in the building have rents ranging from $750 to $850, so McKenna is on the lower end of that, he said.
“He was way, way below the market, and he’s still below the market,” says Marryatt.
According to legal documents, management saw McKenna as a difficult tenant who intimidated them and the other building residents. The renter says that’s untrue—the conflict with management had him living defensively. However tense their relationship was, McKenna says they shouldn’t be able to raise the rent on him like that.
Evan Coole, member organizer for ACORN, says McKenna was “a great advocate for himself” and he used every legal option available, but his landlord was still able to slap him with an increase. “This is something that landlords can do to retaliate against tenants who use the rights they have under the law, and there’s really no recourse.”
As for rent control, Coole believes, “It’s definitely a measure that will prevent retaliation against tenants, and it’s also a matter of justice.”
Coole believes a rent review program would fit smoothly into the bigger picture of renters’ rights, especially those who are low-income. In Fairview, north end Halifax and downtown Dartmouth, luxury apartments are going up instead of affordable housing. The tenancy board process has lots of informal biases against renters, Coole says, a group who almost by definition have less money than their landlords. Bringing back rent control, McKenna and Coole argue, will help balance the playing field in favour of tenants.
So if rent control is such a great thing, why did Nova Scotia get rid of it?
Let’s go back to 1993. On May 25 that year, the NS Liberals won an impressive 40 out of 52 seats. The Conservatives grasped only nine, and the NDP scraped together a measly three. John Savage was our triumphant premier.
A few months after the election, the Liberals passed an order in council that rendered the Rent Review Act, the policy that controlled rent increases, impotent: “Effective on, from and after the 24th day of August 1993, all classes of residential premises are exempt from the Rent Review Act.”
The order was a thing of beauty: it exempted all residential properties from an act that only applied to residential properties. It was perfectly deployed to neutralize the guts of the act without the tiresome process of debating a similar measure publicly in the Legislature.
The province argued the move would save $500,000 a year, which would be reallocated toward programs to help the working poor. The high vacancy rate of 7.1 percent on the peninsula and 12 percent in Dartmouth meant the rent review program was no longer needed, they said—the low demand for apartments would keep landlords from hiking rents.
In the days and weeks following the sketchy move, renters told reporters they would “suffer hell” and be “financially raped.”
Responding to criticism about the removal of the program, the minister responsible for the act, Guy Brown, said: “I say to all landlords in this province—if you try to rip off the people in this province, then Guy Brown will be one of the first ones to reactivate it.”
Sadly, Brown passed away in 2009, so he isn’t around to defend the Liberals’ move.
I ran the government’s argument past an economist to see if it held water.
Dalhousie University economics professor Lars Osberg didn’t need to think it over for long. If the high vacancy rate would keep rents from rising in the short-term, the Liberals must have decided there wouldn’t be much risk in abolishing rent control, he says. However, there doesn’t seem to be a huge benefit to wiping it out, either.
“Well, half a million dollars is kind of small change in the entire government picture in Nova Scotia, so,” he says. “I mean that’s not the major reason. They would be getting a lot of complaints from landlords.”
He thinks the move was at least partly political. “It’s all political, right. You couldn’t expect it to be anything other than political. Which is not to say bad. Politicians are supposed to answer to public pressure.”
Rent control as a policy is most appreciated by tenants in times of sudden shifts in demand and scarcity in the market.
“When Halifax was a port city during the Second World War, for example, there was a sudden surge of demand for housing,” says Osberg sagely. “Currently, I haven’t seen the numbers, but I wouldn’t be surprised if all those for rent signs you see around town don’t indicate some availability.”
Artist Emily Davidson is a longtime proponent of rent control, and she sees good reason to bring the program back.
As a student in 2007, she moved to the north end to take advantage of the then-lower rents. In the spring, she began living in an apartment in a beat-up three-storey building on Creighton Street. She knew student housing closer to campus was inflated, so she had “lucked out” in finding a spot for only $232 a month. In her seven years of living there, the rent inched up to only $266. It was in a state of disrepair, but it was home.
In spring 2013, Davidson’s landlord informed her she was selling the building. She gave the artist a year’s notice. The new owner intended to renovate the building. “It was made very clear that we weren’t going to be able to live there,” Davidson says.
He told them, “If you’re willing to pay market rent when the building is finished being renovated, by all means you can continue living there.” He described market rent as $1,800 for a three-bedroom apartment, or $600 per person.
“That’s more than double,” Davidson says.
The new owner would have had grounds to evict her and her roommates. They threatened to go to the tenancy board. Instead, she says he paid them $11,000 collectively to leave the building—a sweet deal by any measure. If the three of them had split it evenly, each would have been able to live at the place for six months at market rate following the renovations.
Instead, the roommates split the money with some of the other tenants who had lived there and decided to move out.
“It definitely was a place that felt like home, and was a place I felt uprooted from,” Davidson says.
The new owner gutted the place, transforming the derelict property into a modern building with sleek upgrades including new windows, floors and lighting—new everything, really. Eventually, Davidson’s old three-bedroom unit was listed on Kijiji for a titch below $1,700. The property recently sold again on August 5 for $1,100,000.
If some form of rent control were in place, Davidson believes it would create a disincentive against what she calls “renovictions.” She thinks this type of development is problematic because it displaces long-term renters in the north end, and landlords are able to make a large profit off of people’s basic needs. “I think that’s morally wrong,” she says.
Drastic renovations like the one she experienced mean that affordable housing stock is being transformed into market-rate apartments. “The regulations in place are not enough to have affordable housing for everyone, which is a basic human right,” she says.
As for renovictions, she argues: “That process is allowed to happen by our political leadership, and I think the best way they could slow that process is by re-introducing rent control for rental properties.”
Osberg agrees with Davidson that rent control would likely deter landlords from investing in costly renovations, but he says that too could be trouble.
“It depends on what outcome you think is desirable,” he says. “If you want housing to be renovated and the quality to improve over time, it’s going to be costly and landlords are going to want to be able to recoup that and rent it. But if the intention is for housing stock not to be renovated, and to molder and deteriorate over time, then that’s something you want to stamp out, but it means you end up with a whole bunch of slum housing.”
“Sometimes you’ve got to be careful what you ask for,” says Jeremy Jackson. The Killam Properties employee, and president of the Investment Property Owners Association of Nova Scotia, believes rent control would discourage landlords from doing both expensive renovations and regular maintenance, because both subtract from the bottom line.
“The only time I see rental increases go up significantly is when you see a landlord has done extensive renovations,” he says. “That’s fair enough if they want to spend the big bucks to do that.”
Nova Scotia doesn’t need rent control, Jackson argues, because it’s a renter’s market in urban areas right now. “I don’t think we need it, simply because we have more supply than demand.”
He’s right about that. Currently the vacancy rate in Halifax hovers around four percent. That’s why at a time of year that the city is usually overrun by students, there are still For Rent signs around town and plenty of ads for apartments online.
Jackson also points to affordable housing projects in the north end, including Imagine Bloomfield and the developments that are approved in the former MET and Diamonds bar spaces on Gottingen Street, which combine for-profit apartments with low-income units. Both projects are a long way off from beginning construction, though.
I ask Jackson if he would encourage tenants to haggle for a lower rate before getting into a lease. “You may not be successful,” he says, “but you can certainly be able to negotiate.”
When there’s high demand for apartments, as in bigger cities, or sudden upswing in demand, as Halifax experienced during WWII and, arguably, when the shipbuilding contract was announced—at those times, it would be smart for us to have rent control in place.
And if rent control were introduced tomorrow, it would certainly prevent McKenna’s landlords from bumping his rent up unreasonably. But if it were used to solve the problem of retaliatory increases, it would sidestep the issue of whether it’s possible to prove retaliation in the existing the quasi-judicial tenancy board process.
At its worst, rent control could dissuade landlords from making repairs and upgrades, although as McKenna points out, that’s already happening to him. It could also be redundant in times when the market favours tenants. At its best, rent control could provide a more comfortable level of affordable housing in the long-term. Sooner or later, the province might want to discuss bringing the policy back. After all, if we don’t like it, we can always nix it with the sneaky flick of a pen.
Article by Hilary Beaumont for The Coast