The Investment Property Owners Association of Nova Scotia says the rising cost of maintaining properties and the province’s two per cent rent cap is driving landlords to sell their rental units.
Kevin Russell, the president of the association, said IPOANS conducted a survey among more than 100 rental housing owners, of whom 51 per cent said they were either selling or considering selling their properties.
“These small landlords are tired. It’s a tough business and (they’re) now being confronted with a two per cent rent cap, with expenses rising in double digits,” he said in an interview.
“They’re looking at all their options and one of them is including selling.”
All landlords who responded to the survey represented 17,000 rental units in Nova Scotia, equalling an average of about 170 properties per landlord. Those who said they were considering selling their properties represent 5,400 multi-unit residential buildings and 3,600 duplexes or single-family homes.
Russell said the association defines “small landlords” as those who own between one and 500 units who run their operation without hired staff.
The two per cent rent cap was originally put in place by the province’s former Liberal government during the COVID-19 pandemic, and in a surprise move in October, the new Progressive Conservative government announced that it will remain until the end of 2023.
The decision came after mounting public pressure amid a provincial housing crisis that’s seen unaffordable housing prices and rising rates of homelessness.
Before the extension of the rent cap was announced, some tenants reported they would face large rent increases as soon as the cap was scheduled to be lifted.
However, Russell doesn’t believe the issue was widespread enough to justify the cap.
“It’s a small percentage of landlords, and we have to find a way to deal with the small percentage of landlords that were doing this,” he said.
“It was happening, but it’s in a relatively small sector of the rental market, and it’s not reflective of the overall rental market.”
With rising prices of things like insurance, property taxes, energy and snow removal, Russell said landlords are having difficulty breaking even.
He also said the rent cap would dissuade new landlords from entering the market. That, paired with landlords looking to sell their properties, would result in fewer rental units available, said Russell.
“Having the rent cap in place is doing the opposite of what the province requires: more supply,” he said.
Tenants ‘can’t survive’ without rent cap: ACORN
Aidan Tompkins is the treasurer of the Halifax peninsula chapter of ACORN, a tenant advocacy group that is pushing for the rent cap to be made permanent.
He said he’d like to see more numbers from IPOANS on how much money the landlords are purportedly losing.
“They weren’t showing fiscal income rate versus bills they couldn’t pay,” he said. “It appears that some of them are cashing out without being willing to adapt.”
He said other provinces that have rent control measures have learned to adapt.
Tompkins said while the number of Nova Scotia landlords who indicated interest in selling was “quite high,” which could take more rental units off the market, the rent cap should remain in place to protect tenants from unaffordable rent increases.
“It appears that a lot of (landlords) don’t like the idea that their annual income is not appealing as it was,” he said. “But the tenants can’t survive and subsist without the two per cent rent cap.”
Tompkins also said the labour market has a role to play in this issue as well, noting that wages are not keeping up with the cost of living.
“Without the two per cent rent cap … you have a finite wage that tenants are bringing in, and then there’s a non-finite amount of money that’s being requested from landlords,” he said.
“The rent cap has made it a little more congruent, and it’s offered some safety and some ease of mental health to the tenants.”
Tompkins said ACORN is pushing for a landlord registry to ensure equitability and transparency from Nova Scotia landlords.