A report from a tenant advocacy organization shows that the number of affordable units in New Brunswick declined rapidly from 2016 to 2021.
The New Brunswick Coalition for Tenants’ Rights released a report Monday showing that the number of units priced at $750 a month and below fell by at least 8,600 or 25 per cent over a five-year period. In that time the number of units renting for $1,200-$1,499 doubled and those over $1,500 tripled.
Matthew Hayes, a spokesperson for the coalition, says the numbers show that the government’s approach to housing won’t cut it.
“The numbers show that this is a systemic issue and what’s needed are rules,” he said.
The report defines affordable as 30 per cent or less of household income, a commonly used threshold. The report found that there were 25,585 renter households in New Brunswick earning below $30,000 and 62 per cent live in unaffordable housing.
Hayes says the rapid increase in rental prices is being driven by the “financialization” of the province’s housing market, where investors or retail investment firms buy up rental housing, often jacking up prices in the process.
The province has hoped that an increase in supply will help drive down rents over the long term, but Hayes says that the sorts of units being created don’t help people earning lower incomes.
“The higher end of the market, that supply is being met, the demand for additional supply is being met by the market,” he said. “It’s at the lower end where no one is building new units for $750 a month, it’s not economic to do that.”
Affordable units often take large subsidies to create, Hayes said, with the report estimating a cost of about $250,000 to $300,000 per unit. To replace the units that have graduated from an affordable level over the past five years could cost up to $2.6 billion, the report says.
With that in mind, Hayes says the province needs to protect the affordable units it already has by reinstituting the rent cap, which was echoed by ACORN protesters in Saint John on Tuesday.
“We need to keep people housed within the housing that they’re currently in. We know that there’s a shortage of affordable units in the city and across the province so rent control acts as a protective factor for tenants to stay housed,” said Sarah Lunney, a Saint John organizer with ACORN.
Late last year the minister responsible for housing Jill Green announced the province would not extend the rent cap, which was set at 3.8 per cent in 2022, citing concerns that it was deterring development. Instead, tenants can apply to the Residential Tenancies Tribunal if they believe a rent is unreasonable, which could then be spread over the course of three years.
Green told reporters in early December that building permits were down in the year of the rent cap over the year before. She said there had been 104 permits issued by that point in the year, while there were 186 issued in 2021.
That’s important, Green says, because permits are an indication of future building activity.
But data from Statistics Canada looks quite a bit different. Permits for a “multiple dwelling building” over the period of January to October 2022 were up slightly over the same period in 2021, with 401 issued compared to 395.
The total number of units covered by those permits was down slightly over that period compared to the previous year, with 2,863 issued compared to 3,021.
Building starts, which is a measure of current construction, were up last year over the previous, with more “apartment and other unit type” housing starts in the first three quarters of 2022 than in the entirety of 2021.
The province also announced last year that it will spend $100 million over the next few years to build 380 new public housing units.
While that construction is welcome, ACORN’s provincial coordinator Nicola Taylor said the province needs to do more to protect the existing units that are already affordable.
“Affordable housing starts with rent control,” she said. “So you can build all the affordable housing you want, which is great, we’re not against that, but you need rent control in order to stabilize that.”
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