Tenants, landlords give input on rental cap extension in Nova Scotia

Despite hearing arguments to both scrap and amend a plan to extend the rental cap in Nova Scotia to the end of 2025, the Houston PC government is moving ahead with its plan.

In March, the government introduced an amendment to the Residential Rental Cap Act that will see a five per cent cap come into effect Jan. 1, 2024, which will remain in effect until Dec. 31, 2025.

The province's current two per cent cap was established in November 2020 and will remain in place until Dec. 31, 2023.

At the Law Amendments Committee Monday, renters and groups representing tenants argued the Houston government needs to close what they called a loophole that allows fixed-term leases to be used to increase rent despite the rental cap.

“We are deeply concerned with the magnitude of the housing crisis in Nova Scotia,” said Caroline Scott, a renter who also spoke on behalf of Dalhousie Mutual Aid Organization.

“We, along with our classmates, our neighbours and our friends have experienced the stress of the enormous lack of affordable housing and regulation regarding fixed-term leases.”

Renter Robyn McIntosh presented her case Monday.

She said she signed a fixed-term lease for nearly six years and that year after year, it was renewed and her rent increase was reasonable. However, this year she said she was told it would not be renewed and wasn’t given any explanation.

“My small, 600 square foot, one-bedroom apartment is moving from $1,248 a month to $2,195 come September,” McIntosh said.

“This increase of $974 per month was made specifically to avoid the rent cap. And I, along with other people in the building, are being forced to leave our homes at the end of the Summer.”

McIntosh said her story and situation are not unique.

“Unfortunately this is not a case of some landlords doing this to some tenants,” McIntosh said. “Fixed-term leases are increasingly becoming the only option we have and with them, comes housing instability at a time we are seeing unprecedented numbers of people actively homeless across this province.”

Landlords and organizations representing landlords argued that the rent cap has caused rents in Nova Scotia to increase while also restricting many landlords’ ability to break even.

“Rent control hasn’t worked,” said Kevin Russell, executive director of the Investment Property Owners Association of Nova Scotia.

“It is causing rents to increase higher than they have ever in this province.”

Russell said politicians were embracing populist schemes and warned how landlords are selling their properties due to increased costs and more will sell if the cap remains in place.

Ursula Prossegger is a landlord who also manages about 500 units in The Halifax Regional Municipality.

She notes a lot of her buildings were built in the sixties and seventies and therefore cost more to maintain. During her presentation, she pointed out how Ontario has a higher rent cap in place for older buildings.

“My wish would be to go back to a free-market situation,” Prossegger said. “If we can’t abolish a rent cap then it needs to be versatile, it needs to be multi-tiered.”

In the debate over what to do about fixed-term leases, landlords pointed out their benefits.

“Fixed-term leases have always existed to give rental housing providers flexibility to decide who they can rent to and to provide disadvantaged people with opportunity to obtain housing,” said landlord Amanda Knight.

Landlord Issmat Al-Akhali argued that removing fixed-term leases would hurt new immigrants and new renters, including students.

“Without good credit, without a rental history, without solid income, nobody will want to take chances on renters when there is such high demand in the market when you can find solid renters you don’t have to worry about,” said Issmat Al-Akhali.

Joanne Hussey, a community legal worker with Dalhousie Legal Aid, said in the past seven months she and her colleague have supported 62 households facing eviction and another 40 households facing renoviction and in the same period the year before, she and her team only helped 30 households for either issue.

Hussey said the rental cap is a small band-aid for a much bigger problem.

Hussey proposed for the government to tie the cap to the unit rather than the tenant.

“The financial incentive for landlords to end tenancies is removed if the rent cap continues to apply regardless of who occupies the unit,” said Hussey, arguing that without doing so the rent cap won’t have the desired effect of keeping tenants housed.

Hussey also proposed to amend the bill to spell out exactly how much the rent will increase.

The NDP proposed similar amendments as Hussey--both to legislate the five per cent cap and to tie the cap to the unit and not the tenant--but both were voted down.

The bill now goes to the Committee of the Whole House before it goes onto its third and final reading.