N.S. landlords complain they can't cover rising costs without rent increases
Nova Scotia Premier Tim Houston admits he's worried extending rent control may push small landlords out of the market.
"I'm worried about that," Houston said to reporters Thursday after Question Period.
In the election campaign, Houston wasn't in favour of rent control.
On Thursday, he said the rent cap isn't a long-term solution but a temporary measure.
"While other measures to increase housing supply have a chance to work. It was just something that we felt had to be done to protect tenants," Houston said.
As Nova Scotia extends a two per cent cap on rent increases until the end of 2023, one landlord believes language and words matter.
"The constant concept of protecting the tenant from a landlord makes the standard landlord out to be some kind of a villain. Our job is to provide good quality housing," said Adam Conter, General Manager of AR Webber Properties Ltd. The company has 10 to 14 buildings throughout the Halifax peninsula. Most tenants are students or young professionals.
"Our job is to take you into properties that we own, manage them well so that you'll stay and be happy. I think there's too much focus on some of the bad apples," Conter said.
Landlords say expenses are going up. Conter said the insurance for one of his properties will go up 19 per cent year over year.
Kevin Russell with Investment Property Owners Association of Nova Scotia said that's low compared to what he's hearing from other landlords.
"The insurance industry is saying the average price hike that they're saying is between 20 and 25 per cent, but we're getting more calls from landlords saying they're seeing 40 to 50 per cent increases," Russell said.
Mix in higher energy costs and property taxes and Russell expects small landlords will respond to the extension of the two per cent cap on rent increases by walking away.
"They'll either sell their properties or take their properties off the market because, in reality, any business can't maintain a business if they're selling a product below cost," Russell said.
Mark Pretty is struggling to find an affordable place to live now and has been looking for four or five months.
He's relieved to hear rent control will continue, but wonders about enforcement.
"My concern is whether or not landlords are held accountable when they break the rules or raise the rent more than that two per cent," Pretty said.
Conter calls the province's move misguided.
"One challenge in rent control is not understanding the true cost of managing property," he said. Many of his buildings are older and require maintenance, window replacement, repainting, heat control etc.
Factor in utilities costs and insurance costs and he said their costs are going up considerably greater than the two per cent revenue they're locked into.
"So I think what you'll find is a lot of people will pull back on scheduled improvements to existing property. Which is of no benefit to the tenant whatsoever," he said.