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N.B. rental review recommends increasing housing supply, reviewing tenancy act

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WATCH: A 90-day review of the rental situation in New Brunswick was released three days ahead of schedule and includes recommendations on how to increase housing stock and better protect tenants. Silas Brown has more. – May 7, 2021

A 90-day review of the rental situation in New Brunswick was released three days ahead of schedule and includes recommendations on how to increase housing stock and better protect tenants.

The review includes 12 recommendations spread over four broad categories: strengthening existing services; increasing rental supply; a review of tenancy legislation; and increasing human resources in the construction industry.

Absent from the recommendations is rent control, a major ask of many tenant organizations in the province.

The report recommends “better protections against unreasonable rent increases,” but Cheryl Hansen, the province’s top civil servant, said that does not mean a cap on rent increases.

“We have to ensure that we have a plan for housing, not just today, but for the future, because we are experiencing growth, as well as ensuring that we are protecting our most vulnerable,” Hansen said.

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She said the province should avoid immediate “knee-jerk reactions” but also look at those individuals who may need extra protection and “ensure that that’s baked into our legislation.”

Read more: Higgs says New Brunswick is not facing rental ‘crisis’ as 90-day review is launched

That is likely to come through strengthening the tribunal process, which allows tenants to dispute rental increases. Hansen said the government could be open to banning increases deemed unreasonable, in the range of 25 to 30 per cent.

It’s also recommended that access to services and information on the rights of tenants should be improved to offer further protection.

The report also recommends limiting rental increases to once per year. Right now there is no cap on the amount rent can be increased, as long as three months notice is given to tenants.

Tenant groups in the province are reacting to the report with disappointment.

“At the end of a 90-day review of the rental situation in N.B., the provincial government has failed to meaningfully address the concerns of tenant groups with no explicit recommendation for rent control or a moratorium on evictions during the pandemic,” reads a release issued by ACORN NB and the NB Tenants Rights Coalition.

Read more: Higgs resists calls for eviction freeze, rent control from opposition parties, advocates

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Aditya Rao, a spokesperson for the Tenants Rights Coalition, says the most crucial recommendation in the report is the review of the Residential Tenancies Act, something the group has been asking for since its inception.

“All of the things that we’re seeing right now — the out-of-control rent increases, the evictions for no reason, the renovictions — all of these things are happening because there is such weak protections for tenants,” said Rao in an interview.

Premier Blaine Higgs says he hopes to see possible amendments to the act ready for the fall session, which usually starts in November.

Higgs announced the review during his state of the province address in February and told reporters afterwards that he didn’t believe there is a housing crisis in New Brunswick, something he says the report bears out.

“What we’ve learned is that we’re not necessarily in a crisis, but a crisis is pending,” Higgs told reporters Friday.

“What this does is set up this whole view into how big a problem do we have. So I would say we have a situation we can’t ignore, we have a situation that’s very much been magnified, or enhanced, or expedited by what we see in renewed interest in our province.”

Read more: The affordable housing crisis in New Brunswick and the calls for action: ‘No more blame game’

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Rao disagrees with the premier and with the report’s assessment that there is no housing crisis, saying the stories included in the report suggest otherwise.

“We are disappointed by the fact that the report seems to ignore a lot of the evidence that the report itself goes on to document in saying there’s no crisis in housing,” he said.

“These are people who are living in crisis and it’s really frustrating that tenants shared their stories only to be told that there’s no crisis.”

The report included quotes from survey respondents who shared their experiences with housing in the province.

“There are several days in the month, in which I cannot eat. Regularly, I have to make decisions to forgo prescription eyewear, dental work, costly medication, clothing or food,” one respondent said.

“I feel trapped with no way out. Society has swept me under the rug so that I don’t have to remind them of what poverty looks like.”

What’s in the report

While the report notes in its opening pages that the province is “not currently in a housing crisis,” it paints a dire picture of how many are being failed by the current system. Along with a jurisdictional scan, civil servants spoke to over 4,000 tenants and 1,000 landlords and developers.

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Respondents to a survey circulated by the government raised concerns over the condition and price of rental units. Forty-seven per cent said their rental unit was in bad shape, 31 per cent said housing costs are out of budget, and 19 per cent say they don’t have enough room for their family.

Read more: N.B. housing boom sees house prices climb 30% in 2021

Over the last 10 years, there has been a 41 per cent rise in household spending on housing. For those in the lowest fifth of annual income, there’s been a 34 per cent rise in spending on housing over that same period, while incomes have only grown by 18 per cent.

The report also identified a gap in what the market is currently able to provide and what is needed by New Brunswickers. The demand is growing faster than the ability to build new units and the units being built are primarily closer to the top end of the market.

According to the report, 41 per cent of respondents with incomes between $10,000 and $20,000 a year pay between $750 to $1,000 a month to stay housed.

Even as apartment construction is at an all-time high, the report says high costs for materials are driving up final rental prices. The report also says that there “is very little to no strong business incentive to create and manage affordable housing stock.”

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The solution to most of these issues is an increase in supply, the report says.

In order to do so, the review recommends a business plan for a provincial non-profit rural workforce development corporation to address shortages in rural areas, the use of government land and building inventory to encourage developers to build affordable housing, and to promote and provide better tools for local governments to support housing development.

But a roadblock to the province’s strategies — and one familiar to many — was also identified: a lack of human resources. Developers interviewed for the review said they are having trouble recruiting and retaining skilled tradespeople and construction workers.

The report suggests that ongoing recruitment efforts be prioritized and that the province look to immigration to provide more skilled workers.

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