End to New Brunswick rent cap draws mixed reaction from tenants, landlords

Click to play video: 'New Brunswick says temporary rent cap won’t be extended'
New Brunswick says temporary rent cap won’t be extended
WATCH: Tenants in New Brunswick could see large rent increases soon. Following months of vague direction, the province has now confirmed the temporary rent cap will not be extended. As Robert Lothian reports, it has advocates on edge – Nov 25, 2022

A decision to not renew the temporary rent cap in New Brunswick has drawn mixed reactions from stakeholders.

On Thursday, Jill Green, the minister responsible for housing and Service New Brunswick, confirmed the rent cap would not be extended.

Two new amendments introduced to the Residential Tenancies Act ensure there is a “balanced approach,” Green said.

“Rent caps have been shown not to have the desired effect, and you look at any article by an economist, and they say rent caps don’t work,” Green told reporters.

The provincial government introduced a one-year 3.8-per cent cap on rent increases in March.

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While direction on the future of the cap has been vague in recent months, Thursday’s confirmation means it will draw to a close at the end of the year.

New amendments include giving the Residential Tenancies Tribunal the power to phase in rent increases in some scenarios, with the threshold being the Consumer Price Index.

However, advocates, who have long called for the cap to be made permanent, believe changes made Thursday leave tenants worse off.

“(We were) hopeful, okay, a temporary rent cap could become a permanent rent cap, but now they are not doing (that), and they are doing worse,” said Jael Duarte, the tenant advocate for the New Brunswick Coalition for Tenants Rights.

According to the coalition, tenants in the province have already reported receiving a rent increase above the current cap. Landlords are required to give six months’ notice for rent increases.

Duarte, who said she is not against development, questioned why a landlord would maintain small increases if they’re not legislated to do so.

“The government is making legislation for a tiny little part of New Brunswick,” she said.

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At the time the rent cap was imposed, officials pointed to rising costs and low vacancy rates as the reasoning. Duarte said many tenants remain in the same financial position they were in this time last year.

“They have to see the humanity of this, we are not talking about just one (person), we are talking about families, we are talking about elders, we are talking about people with disabilities.”

In an interview with Global News, the president of the New Brunswick Apartments Owners Association stated he was “happy” to see the rent cap will be scrapped.

“Having rent controls tells a business that’s trying to grow that you’re going to be heavily regulated,” Willy Scholten said on Friday.

Landlords have noticed a difference in their bottom line, said Scholten, adding it’s a result of price increases on labour and supplies — which has been worsened by rising interest rates.

Potential for another year under the rent cap could disincentivize development, he said.

When asked about tenants who are worried about significant increases, Scholten said most landlords tend to be fair.

“The majority of landlords in New Brunswick are very reasonable people, they give reasonable increases. The ones that are giving unreasonable increases, the legislation that is in place and was added to by the government is to take care of those.”

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Click to play video: 'Concerns raised as rent cap in New Brunswick set to expire'
Concerns raised as rent cap in New Brunswick set to expire

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