N.B. invests $3M in rent bank, but lack of rent control lessens effectiveness: expert

Assistant professor Tobin LeBlanc Haley says the implementation of a rent bank is a good step in a dire housing situation facing New Brunswick, but without a rent control regime, it’s going to be less effective.

“It does interrupt that housing loss,” she said. “Because we don’t have rent control, it will allow people to pay off arrears … but without rent control, the full benefit to that tenant won’t be realized.”

What’s a rent bank?

A rent bank is a resource to allow for grants, forgivable loans or no-interest loans to be given to tenants to pay for upfront costs for housing or to catch up on arrears that could lead to eviction.

LeBlanc Haley researches rent banks in depth in her work at the University of New Brunswick. It is a tool widely used in British Columbia, Ontario and Manitoba.

The rent bank was included in a housing strategy launched by the New Brunswick government – that fell short of placing any rent controls on landlords. It was modelled after the one in Manitoba, according to Social Development Minister and Minister Responsible for Housing Jill Green.

Manitoba allows for interest-free loans, which can be paid over a maximum of two years.

But all three provinces with established rent banks have something New Brunswick doesn’t — a cap on rent. In Manitoba, it is at zero per cent for 2022 and 2023. Ontario caps rent increases at 2.5 per cent and British Columbia at two per cent.

“The urgency of the situation in New Brunswick wasn’t matched by the strategies,” LeBlanc Haley said.

LeBlanc Haley explained there are about 25,000 renter households in the province that earn under $30,000 per year, and 62 per cent of those are unaffordably housed.

“That’s a huge number of people,” she said. “So if we’re truly modelling the rent bank after Manitoba, we should also be looking at that rent control.”

It also has a mechanism, she explained, to have more moderate increases in times of very high inflation.

“Without rent control, all the mechanisms the government has announced to support tenants are going to be less effective,” she said.

She also has questions about who will handle the rent bank.

“It should be a non-profit organization,” she said. “It’s best served by a non-profit who is in the community that knows all the services, has contacts to all the services, and that’s just capacity the government doesn’t have.”

She said the government is also the province’s largest landlord, and to operate it would be a conflict of interest.

LeBlanc Haley explained that a rent bank isn’t simply a cash exchange, it also helps to connect people to housing subsidies and credit counselling, and with applying to social assistance and getting on housing lists, among others.

The implementation

LeBlanc Haley said she was left with a lot of questions about the housing strategy in general and also whether interest will be applied.

“What will the policy implementation look like? We still don’t know. Interest cannot happen,” she said, explaining there are no other rent banks in the country that charge interest.

Global News has reached out to the Department of Social Development and is awaiting a response.

“My biggest concern is that there is no rent control and so the impact of the new programs that have been announced will be significantly reduced, the impact of those programs could be augmented, protected and deepened with rent control,” LeBlanc Haley said.

It’s not yet clear who will be handling the rent bank.

In British Columbia, a rent bank was established in 2019 and runs through the Vancity Community Foundation and is funded by the B.C. government.

Melissa Giles with the BC Rent Bank said she was pleased to see New Brunswick was adopting the model.

“The rent bank was really designed to work with the low-to-moderate-income earners who faces that temporary crisis,” she said.

Giles said they did a survey of people who had accessed the rent bank, with 94 per cent showing they’d maintained their housing or improved it. The rent bank also assists with upfront costs for housing.

Another 64 per cent of respondents said without it, they would have experienced homelessness. She said it is important to ensure there are equitable access points throughout the province for people with different housing needs.

“That ensures that not only can they get timely services but they also get services that are relevant to their area,” she said.

New Brunswick has invested $3 million over the two years to help 750 renter households, but no date has been set for the rollout of the rent bank.