Globe & Mail: In the Maritimes, tenants are getting hit with steep rent increases

Posted March 21, 2022

For the first 15 months of the pandemic, Mike Nantau lived at a motel in Stratford, Prince Edward Island, one of the few places that was affordable and accepted dogs.

The price was right – $710 a month – but not much else. There were cockroaches. The bar fridge could only fit a couple days’ worth of food. The motel was sullied by drug use and violence. And with lockdowns in effect, the 67-year-old would go weeks without seeing anyone.

Eager to get out, he leased a second-floor apartment in nearby Charlottetown last year, sight unseen. At $900, the monthly rent was more expensive, but thanks to a provincial benefit for low-income seniors, Mr. Nantau could manage the increase.

The trouble now is that his mobility is getting worse, the journey up the stairs more arduous. He’s looking for a new home, but with his trifecta of requirements – ease of access, pet-friendly and affordable – there isn’t much that fits the bill.

“It used to be very easy to find a place to live here in Charlottetown,” he said. “Six or seven years ago, you could get an apartment for $800 that’s costing you $1,200 or $1,300 now.

“There’s just nothing out there.”

His frustration is shared by many across the Maritimes, where tenants are getting hit with steep rent increases, particularly over the pandemic.

In PEI, rent has soared 16.4 per cent over the past two years, as measured by Statistics Canada’s Consumer Price Index. Rents are up 8.4 per cent in New Brunswick and 6.2 per cent in Nova Scotia, compared with a 4-per-cent increase at a national level.

The surge is not only a burden to household finances, but also emboldens landlords to jack up rents further in a region that’s teeming with newcomers, but struggling to absorb them.

It’s also emblematic of an unfortunate dichotomy: Homeowners have seen their wealth explode over the pandemic, while tenant households are getting squeezed.

“For a lot of people, rent has been unaffordable for a while,” said Sarah Lunney, chair of the New Brunswick chapter of the Association of Community Organizations for Reform Now, which advocates for low- and moderate-income earners. “Now, it’s to a point where even places that would be considered, in our opinion, slum-like housing, are incredibly expensive.”

In many ways, what’s happening is the dark side of a boom period that’s brought new blood to rapidly aging provinces. From 2016 to 2021, the population of the Maritimes grew at a faster rate than the Prairies, a first since the 1940s, according to recent census results.

Lately, those migrants include a flood of remote workers seeking cheaper homes, leading to price acceleration that resembles Toronto or Vancouver. In the Moncton area, the benchmark home price has jumped 37 per cent over the past year, while in PEI, it’s up 27 per cent. In the Halifax area, the average home price has risen 30 per cent over a year to about $560,000.

That’s putting more strain on the rental market. Vacancy rates for purpose-built apartments in the Maritime provinces were under 2 per cent in October, or well below the national rate of 3.1 per cent, Canada Mortgage and Housing Corp. said in a recent report.

Rents are rising quickly, too. According to CMHC, the average rent for an apartment in Charlottetown or Moncton ran about $1,000 a month – increases of 9.8 per cent and 10.6 per cent, respectively, in just the past year. Condominiums are far more expensive. In Halifax, the average condo rent was roughly $1,700 a month, up 10.9 per cent in a year.

The pandemic was hardly the cause of rental problems, housing advocates say, but it did inflame them. Leading up to the population boom, very few apartments were built in the region. More projects are breaking ground now, though it takes years for them to reach completion.

Those advocates point to another problem: weak tenancy laws that allow landlords to ram through large rent hikes or get rid of tenants.

New Brunswick is a prime example. It doesn’t have rent control – that is, mandated limits on rent increases – resulting in some outsized hikes of late.

Diane found out the hard way. The Globe and Mail has agreed not to use her full name to protect her tenancy. Shortly after ownership of her Fredericton building changed last year, she was given notice of a $200 rent hike. Lacking options to fight the increase, she decided to stay put and pay the full $1,000 a month.

“One more increase like this, or even slightly up from this, and I’ll have to be back in the market for another place,” she said.

Throughout the pandemic, Conservative governments in New Brunswick and Nova Scotia have maintained that rent control inhibits construction of much-needed housing supply. Despite that, Nova Scotia opted in October to extend pandemic rent controls until the end of 2023, which limit residential rent increases to 2 per cent annually.

In PEI, rent control is tied to the unit, rather than the occupant. (In many jurisdictions, landlords can reset rents at whatever they like, but only after a unit is vacated.) The maximum rent increase for 2022 is 1 per cent, the same as in 2021.

Rental inflation in PEI is running a lot higher than 1 per cent. That’s because new rental supply is often priced at lofty rates. Landlords can also apply for above-guideline increases. And the province does not maintain a registry of rental fees, which makes it tough for tenants to find out what the prior occupant actually paid – and if their increase was lawful.

“It’s very hard, the way the law is set up, for a tenant to actually prove that their landlord has illegally raised the rent,” said Connor Kelly, tenant network co-ordinator for PEI Fight for Affordable Housing, an advocacy group.

As the crisis drags on, legislation is changing. Charlottetown City Council approved new regulations last month on short-term rentals, such as Airbnb, restricting their use to primary residences and banning apartments from those platforms. The rules take effect in March, 2023.

New Brunswick, meanwhile, brought in a host of changes in mid-December. Among them, all tenants will now be allowed to dispute rent increases – not just long-term tenants who had occupied their units for at least five consecutive years, as the law was previously designed.

Under provincial rules, landlords are obligated to increase rents “for each unit in the same building by the same percentage or increase the rent in relation to what is charged for comparable units in the same geographic area,” the Service New Brunswick website reads.

“This is not rent control,” said Matthew Hayes, a founding member of the NB Coalition for Tenants Rights.

The language around rent hikes is flimsy and open to interpretation, housing advocates say, compared to provinces that set an annual percentage increase, often tied to inflation and other factors. Tenants have 30 days to request a review of their rent increase upon receiving notice.

“It’s still putting the onus on tenants to have to dispute the rent increase,” Ms. Lunney said. “For people who are low to moderate income, who don’t have a lot of time on their hands, it can be very time-intensive and resource-intensive” to go through the process.

Still, there’s another option for landlords: renovictions, or evictions to renovate a unit, which are often used to set rents markedly higher after removing low-paying tenants.

Nichola Taylor and her family, also of Fredericton, were served with an eviction notice last month, giving them until the end of March to vacate their unit so the landlord could renovate. The building’s ownership recently changed, leading to a flurry of renovictions at the property, she said.

Fortunately, she’s already found a new apartment. But at $1,050 a month, her rent has risen by $300 – or $3,600 over the course of a year. Ms. Taylor said they can afford the increase, but it will curb how much they’re able to save for an eventual home purchase.

“The way my husband sees it – and I agree with him – is if we’re going to pay this much money, it should be on our own mortgage rather than someone else’s,” she said.

Ms. Taylor is concerned with how others in her situation – minimum wage earners, single people, immigrants and seniors on fixed incomes – will manage the upheaval.

“It’s frightening, it’s really frightening,” she said. “Too many vulnerable people are at risk.”

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Article by Matt Lundy for The Globe & Mail

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