Government response to plight of renters not matching attention homeowners received
New Brunswick undecided on whether 50 per cent rent hikes require action
Tenants who have been hit with 50 per cent or higher rent increases in the aftermath of apartment building sales have been making headlines, but they haven't triggered the same concern and $100-million fixes government once unleashed for homeowners combating much smaller housing hardships.
"I think few politicians in New Brunswick are themselves tenants," housing rights advocate Aditya Rao said of the muted government response to a spike in rents that has been costing some New Brunswick tenants their homes.
"You know, I imagine most of them are homeowners. And so issues relating to home ownership might resonate with them."
Last week, Fredericton senior Bernadette McGregor revealed she had been given notice of a 50 per cent, $400 per month increase in rent after her apartment building was sold to Ottawa investors.
"I just couldn't get over it. I was in shock," said McGregor, who has lived in the building for eight years and now must move.
McGregor said other tenants in her building got similar letters.
"It's stressful. It's very upsetting."
In a similar incident in October, William Morissette received notice of an even larger increase, 62 per cent, after the Moncton building he and his family were living in sold to Quebec investors.
"In all my years, it's a first. I never saw an increase like that. I never thought it was even legal, but apparently they can do it," he said.
Morissette could not afford the increase and moved out and McGregor said she, too will have to go.
It is a sudden burst of housing insecurity for some renters that the province has been reluctant to involve itself in, even though it did act aggressively a decade ago when calls for housing help were coming from homeowners.
In 2010, the former government of David Alward intervened when it felt rapidly rising property assessments in New Brunswick were pushing residential property taxes up quickly and threatened the affordability of housing.
"There are some people whose assessments have gone up so dramatically in the last number of years that it is difficult for them to afford to be where they live," said Bruce Fitch, when he was local government minister in December 2010.
"I was talking to one husband and wife and they were selling their house. They were selling because of the substantial increase in taxes."
Citing "fairness" to "protect homeowners from big jumps in their assessments," Fitch introduced legislation to cap assessment increases at three per cent for two years.
When that provision expired the province froze the savings in a so-called "assessment gap" that has allowed homeowners to keep artificially low valuations on their properties for the following eight years, as long as they continued to be the owner.
The Higgs government announced last month it is cancelling the assessment gap benefit in 2021 but over the past decade maintaining it has cost the province and municipal governments an estimated $110 million in lost property tax revenue.
A second protection for homeowners introduced in 2012, is a ban on property tax increases of more than ten per cent per year, even if a property assessment rises more than that. Increases in excess of ten per cent have to be phased in over multiple years.
In 2018, an assessment on a home in the regional community of Haut-Madawaska that went from $48,800 to $68,800 caused a $205 tax increase that the province required to be phased in over four years because it's a 33 per cent jump. The tax increase in the first year was limited to $64.
McGregor's rent increase is 23 times higher than that property tax increase but comes with no phasing in, or other limits.
Rao argues the province's concern for shielding homeowners from sudden cost increases should be expanded to all housing situations.
"The stories of extraordinary and exorbitant rent increases that we've been seeing for the last couple of months are absolutely evidence of of a failure in protection for renters," said Rao.
"Landlords already have a legislative framework that favours property owners over tenants and now they have market power as well. The issues that tenants have always faced in this province are becoming more and more pronounced, leading to the kinds of stories that demand the government's attention."
New Brunswick's Department of Justice did not respond to a request for comment about the lack of protection for tenants facing large rent increases, but last week Premier Blaine Higgs said he is still evaluating what the problems are and whether anything needs to be done.
"I've asked for an evaluation and I've asked the landlords as well to give me details on rent increases and evictions particularly so I have a very clear understanding if it's an issue or not," said Higgs.
"I expect landlords to do the right thing during a pandemic. And that would be that you wouldn't be, you know, making it unreasonable. You wouldn't be doing things that are totally untoward."