The executive director of Nova Scotia’s property owners association is calling on landlords to stop sending out notices of massive rent increases to tenants.
Ever since Tim Houston’s PC party was elected, some tenants have reported getting notices that their rent will increase by hundreds of dollars (sometimes more). The increases, however, are contingent on if/when Nova Scotia’s temporary rent control measures are lifted.
Premier-elect Tim Houston has stated multiple times he doesn’t believe rent control works.
Kevin Russell, the executive director of the Investment Property Owners Association of Nova Scotia, wrote an open letter addressed to landlords on August 25, saying such notices must stop. Russell, however, didn’t write the letter because he believes in rent control. He is worried such massive rent increases may persuade Tim Houston’s new government of keeping rent control in place.
“Rent control will continue to dog the industry as long as a small percentage of Nova Scotia’s 6,000 landlords keep serving tenants with egregious rent increase renewals with caveats. If left unchecked, there is a high probability the new government will extend the 2 percent Rent Cap,” wrote Russell.
“…aggrieved tenants have directly emailed IPOANS copies of their February 2022 renewal notices. Some of these renewals include rent increases of up to 130 percent, with a caveat that if the 2 percent Rent Cap remains in place, the proposed rent increase won’t go through.”
Russell told Huddle he wanted to write the letter because the vast majority of landlords in Nova Scotia are reasonable with rent increases. He felt recent reports of huge increase notices have painted all landlords in the province with the same brush.
“The letter was written to let people in the industry know that we don’t condone what is going on in the marketplace,” said Russell.
“We are not in favour of unfair rental increases, and it’s not reflective of how the entire industry operates.
“A part of long-term tenancies is having reasonable rent increases. So, it was important to get that message out.”
Russell believes part of the problem lies with new landlords who don’t understand the province’s residential tenancies laws. He said many of the older landlords are retiring and selling off their properties.
According to Russell, the hot real estate market has caused many to sell their rental properties. Some landlords were also motivated to sell because they didn’t want to operate under the current rent control regulations.
This has led to a big increase in new and inexperienced landlords in Nova Scotia who need to learn the right way to do business
“There’s been a surge in new landlords entering the market and they don’t have an understanding of the residential tenancies act. They’re not aware of the rules and regulations that are in place,” said Russell.
IPOANS doesn’t believe rent control works. This year, it commissioned Gardner Pinfold to do an independent examination into Nova Scotia’s housing crunch. The consultants came back with a report saying the rental stock needs to increase, and rent control often deters new construction.
Russell says IPOANS will not support rent control on a permanent or temporary basis, because the Nova Scotia markets need more stock asap, and any form of rent control will slow down development. He also notes that the two percent rent cap doesn’t match the increased cost of building maintenance, which reached 4.5 percent in 2020.
“Rent control, whether temporary or permanent will demotivate investment in the industry, at a time when we need it,” says Russell.
“(When vacancy rates go up) the market would take care of those who are increasing rent because the market won’t allow it.”
Huddle will have a report on the Gardner Pinfold report on housing affordability in the coming days.
But even the Gardner Pinfold report states rent control works for the lucky tenants able to get it, and those tenants often stay in their rent-controlled units long term. Although the report does question if rent control measures always benefit the socioeconomic group it targets.
And there’s no doubt that rent control would help those renters who are facing potentially massive rent increases if and when the governing PC’s lift the two percent cap.
So, what should be done with the rogue landlords who still plan on doubling someone’s rent if there are no controls in place?
“This is a complex issue that needs solutions,” says Russell. “The increase in rental stock is a priority, and it must be done quickly, and there must be programs in place to be able to build new purpose-built rental stock and affordable rental stock.”
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