Tenant Advocacy Group Says Nixing The ‘Double Tax’ Won’t Solve Rent Woes
FREDERICTON–A prominent tenant’s advocacy group isn’t buying the New Brunswick Apartment Owners Association’s claim that the province’s “double tax” will be the catalyst to a wave of rent hikes.
Kristi Allain, an associate professor of sociology at St. Thomas University and an organizer with the New Brunswick Coalition for Tenants Rights, said the solution to rising rents is rent control and strengthening tenant protections in the province.
Allain disputed the NBAOA’s contention that New Brunswick’s “double tax” will accelerate the financial stress of higher property tax bill.
RELATED: Landlord Association Says Rising Assessments And ‘Double Tax’ Will Fuel Rent Spikes
She explained that the “double tax” is a provincial homeowner’s credit for people who live in the property they buy.
“If you buy a residence you live in, you receive a tax credit. Landlords aren’t being penalized, homeowners are being incentivized,” Allain argued.
In a recent release, the NBAOA said rising property assessment values and the province’s municipal and provincial “double tax” on property not occupied by the owner will lead to untenable property tax jumps that will be passed on to tenants in the form of pricey rent spikes.
Allain argued there’s no evidence that landlords will keep rent at a certain level if the province extends them a tax credit on their rental properties.
“The landlord association is asking us to trust them to take the credit and pass it onto tenants. They’ve not shown themselves to be trustworthy over the pandemic–especially when they’ve raised rents, sometimes astronomically, on some of the poorest tenants in the province,” she said.
“We can’t set government policy on the charity of corporate landlords to provide relief for tenants.”
Stronger Protections
Allain is proposing protections like leases that automatically renew and switch to month-to-month when they expire, and rent controls similar to Ontario.
She said Ontario sets a rate, pegged to inflation, that rent can be increased every year. This protects against untenable rent surges. With no such regulation in New Brunswick, Allain said nothing protects tenants from egregious rent hikes.
She noted that far more is at stake for tenants who are already contending with rising rent.
“We can’t pretend landlords and tenants are facing the same thing. We know being homeless is not the same as having a tax increase,” she said.
Out-Of-Province
Allain told Huddle she doesn’t believe it’s local landlords driving up rent in the province.
Many of the apartments recently purchased in New Brunswick have been by corporate landlords and large real estate investment trusts (REITs) from other provinces.
“The provincial part of the tax code hasn’t been a disincentive for people to buy units,” she said.
Allain said those out-of-province landlords and REITs have been buying apartments, renovating them, and drastically increasing the rent. That pattern is troubling to her, because REITs are mandated to provide as much value as possible for their shareholders.
“They can’t have a benevolent view towards tenants because that’s not their job. Many of these people who buy into REITs aren’t even in our area so they’re not paying the same kind of taxes,” she said.
Allain said the smaller presence of REITs in jurisdictions with stronger tenant protections, like Ontario and Quebec, is evidence that those protections work, driving larger trusts out of those regions.
“In New Brunswick we have Killam, CAPREIT…et cetera, and high REIT penetration because we have such low tenant protections. One of the things that helps protect us, ironically, is the higher tax rate here,” Allain argued.
Allain thinks the homeowner’s credit should be extended to smaller landlords, and that larger corporate landlords and REITs should not have access to the same incentives that encourage people to buy and live in homes.
“If you own a duplex or triplex and are renting out apartments and you live there, that credit should be extended to you as well,” she said.
Sam Macdonald is a Huddle reporter in Moncton. Send him your feedback and story ideas: [email protected].