N.B. Budget Falls Short For Both Tenants And Landlords
FREDERICTON – New Brunswick’s provincial budget has drawn criticism from advocates for tenants and landlords, alike.
Tenants’ rights advocates say the budget is a tentative step in the right direction, but not enough. Landlords, meanwhile, say the changes have cranked up expenses and will stymie the development of new housing stock.
Kristi Allain, an organizer with the New Brunswick Coalition for Tenants Rights and associate professor of sociology at St. Thomas University, told Huddle the $6.3-million in the province’s budget isn’t going to help much.
“Although we’re happy to see that money, it’s really only one project–it’s not going very far,” said Allain.
RELATED: N.B. Budget Promises Increased Spending And Tax Cuts
“We have almost 6,000 people on the waitlist for affordable housing in the province and $6.3-million is not nearly enough to help house the people who need that kind of housing,” said Allain. “We need to take that $6.3-million and compare it to the tax break that the province has given to large corporate landlords.”
Allain suggested that the province ought to have dipped into its $35.2-million surplus. She argued some of that money could have gone a long way to help rectify the increasing problems around housing and homelessness in the province.
Willy Scholten, chair of the New Brunswick Apartment Owners Association, is disappointed with the budget for another reason.
“They’re promoting this as giving savings to landlords and [then] doing a rent cap,” he said. “The reality is they’re only talking about the tax rate”
“The province is touting this as a good sign that developers will come because we have a 1.7-percent vacancy but what they’ve done is sent a message saying ‘at the snap of a finger we can be increasing taxes 21 percent,'” he added.
Tax Reduction
Allain told Huddle the 50 percent provincial property tax reduction for non-owner-occupied residential properties over three years will amount to tens of millions of dollars that could otherwise be used to bolster the province’s affordable housing stock.
RELATED: Landlord Association Says Rising Assessments And ‘Double Tax’ Will Fuel Rent Spikes
“I don’t feel it’s necessary. Although the tax rate may appear higher than the amount of tax they’re paying on their properties, it’s really in line with other properties throughout Atlantic Canada,” said Allain.
“They weren’t actually paying that much more. In fact, there’s no real reason to give a tax break to corporate landlords. The tax break belonged to homeowners and it was an incentive to help people be able to afford homes–it wasn’t designed for corporations.”
But Scholten argued the reduction isn’t much in the face of the 30 percent increase in property value assessments landlords are facing.
He said the combination of increasing assessment and a nine percent decrease in the tax rates still works out to a 21 percent tax increase for landlords this year.
“There are no savings in that,” he said.
Dropping Developments
Scholten said the reduction won’t help much with the tax burden and believes some developers will drop projects.
In the face of rising taxes and assessments, Scholten said 4,530 potential developments by association members were on hold in New Brunswick, waiting for the budget decision announced Tuesday.
“The response I’m getting from landlords and developers is that those developments are not going to happen,” Scholten said.
“I had one developer from Bathurst tell me he’s not going with plans [for] a piece of land that went through city council and got approval for a $20-million development.”
Allain said decreasing the tax burden on rental properties increases their value and attractiveness to investors.
“That will bring more investors to the province, which might intuitively seem like a good thing. But what that will do is drive up the costs of properties, including single-family homes, making it harder for working and middle-class New Brunswickers to be able to afford to own homes or rent in the province,” she said.
Rent Cap
Scholten said the province’s 3.8 percent rent cap is just another added cost to landlords.
“I think with the units themselves, the only thing the landlord controls is the maintenance. So, the existing stock we have is going to get less maintenance because we won’t have enough money to cover that,” he said.
Allain argued that while the rent cap is a small step in the right direction, the price of housing is still out of control.
RELATED: Tenant Advocacy Group Says Nixing The ‘Double Tax’ Won’t Solve Rent Woes
“We’re relieved to see a rent cap, but it should have been done earlier. There’s been a lot of heartache and distress among tenants since the start of the pandemic. Many have lost their homes, and we know there’s increasing homelessness in New Brunswick,” she said.
She added the coalition is concerned that the cap will only be in place for a year.
“Now, what we want to see is a rent cap, combined with other tenant protections–protections that help people stay in their apartments so landlords can’t simply evict them,” she noted.
Allain said the coalition wants to see sustained rent caps, and to know how much they will be, going forward.
She noted that over the course of the pandemic, landlords across the province have increased prices on units.
“Sometimes, in the neigbourhood of 10 percent, but we’ve also seen stories of landlords increasing rent 40, 50, 60, and even 100 percent for tenants,” said Allain.
“Not only that, we’ve seen landlords ‘renovict.’ When they do this, they’ve taken naturally occurring affordable housing stock and moved it up-market, by simply renovating apartments that are otherwise in good shape.”
Sam Macdonald is a Huddle reporter in Moncton. Send him your feedback and story ideas: [email protected].