Do New Brunswick Cities Like Saint John Need Rent Control?
SAINT JOHN – Jill Farrar was living in her two-bedroom Princess Street apartment in uptown Saint John for three years when she and her neighbours received notice that their building had been purchased earlier this month.
“The building was for sale for a while,” says Farrar. “When it sold, [the new owners] sent me a little letter saying, ‘welcome, we’re going to be your new owner’ and that they were going to update us further information.”
Not long after, tenants received their required two months notice, as per their lease, that their rent would be increasing by 16 percent, and they would be charged an additional fee for their parking spots.
For Farrar, this meant her rent would be going up from $730 a month (heat included), to $850, plus an additional $40 parking. Since moving into the building in 2017, the only increase she’s had was in 2018, when the previous owner increased rent by $15 to make laundry free to tenants.
Farrar said the new landlords haven’t yet communicated to them about any work or renovations that will happen to the building, but there have been some minor repairs made.
“For instance, the lights in the hallway in the building have been burnt out forever, so they fixed it. But that’s something that has to happen because it’s an emergency exit,” says Farrar.
“Potentially, they might have something planned, but they kind of just indicated that they were raising it to be more in-line with market value. The concern, of course, is that there are no actual limits on market value anywhere in New Brunswick.”
In New Brunswick, there is no limit on how much, or how often, a landlord can increase your rent, as long as three months notice is given.
Though Farrar will now be spending 50 percent of her income on rent, she will be able to manage. But she’s worried about others living uptown who may not be so lucky if put in a similar situation. With the minimum wage in the province being $11.70, she fears people could eventually be priced out of the city centre.
“If they’re allowed to raise it to what they think market value is, my concern is that the market value within the uptown area is going to be too high for anybody to afford on the wages that we get living in New Brunswick,” she says.
A look at the numbers
Rent prices in uptown Saint John have become a hot topic lately, with recent news of known high-end developers Historica purchasing the uptown portfolio of Hazen Investments, which offered apartments on the more affordable side.
Though Historica president and CEO Keith Brideau has said he intends to keep those units in the middle-market price range, tenants and residents alike have expressed concerns on what this will mean for overall rents uptown.
RELATED: Historica Enters Mid-Level Rental Market With Purchase Of Hazen’s Uptown Properties
Rent prices have gone up in the uptown over the last five years. According to latest data from the Canadian Mortgage and Housing Corporation CMHC, the average rent of a one-bedroom apartment in uptown Saint John was $619 in October 2015. Fast forward to October 2019, and the average rent is $682. For two-bedrooms, the average rent in October 2015 was $740. In October 2019 it was $816.
The CMHC considers the “uptown” and the “south end” (south of Duke Street) as separate neighbourhoods, though most locals consider it all to be “uptown.” In October 2015, the average rent for a one-bedroom in the south end was $585. In October 2019 the average rent was $629. For two-bedroom units, the average rent in October 2015 was $666. In October 2019 it was $723.
It should be noted that this data is only a snapshot for that specific point in time, and rents often increase or decrease based on the area’s vacancy rate. When the vacancy rate is high, rents tend to go down. When it’s low, prices tend to go up.
According to CMHC data, the vacancy rate for one-bedroom apartments uptown in October 2015 was around 10.9 percent. In October 2019 it was around 3.2 percent. The vacancy rate for two-bedroom apartments uptown in October 2015 was around 12.2 percent and 0.7 percent in October 2019. They did not have any reliable data for vacancy rates for the south end for those two years.
Though there is no CMHC data yet for 2020, a look through Kijiji and property management websites in late October and early November reflects higher prices for available apartments. There are listings for one-bedroom apartments in uptown Saint John for $675, $750, $795, $800, $1,150, $1,250, no utilities included. In the south end (south of Duke Street) there was a listing for one-bedroom with no utilities for $650.
Looking at two-bedroom listings uptown, no utilities included, there are listings for units at $1,300, $1150, $1,495, $1,195, $995 and $925.
For one-bedroom listings uptown that had at least heat included, rents were $1,095 and $1,100. For 2-bedroom listings that had heat included, rents were $1495, $1850 $995, and $950.
In the South End, there was a one-bedroom apartment listed for $850, heated and a two-bedroom listed for $1050, heated.
The “Ripple Effect”
Saint John Human Development Council executive director Randy Hatfield is also a Princess Street resident in uptown Saint John. Over the last 10 years, he’s seen a change in the city’s rental landscape.
“A decade ago, the two cranes were servicing J.D. Irving’s parking lot and the international headquarters of [Irving Oil Limited],” says Hatfield. “The cranes are now for high-end market rents that fill a part of the housing continuum.”
Hatfield says though there is a market demand for the higher-end units that Historica and upcoming developments like The Telegraph and The Wentworth will provide, it’s also highlighting the need for affordable units uptown too.
The downtown population is growing and renovation is occurring within the housing stock and new construction is taking place for the high-end. That’s pretty good, that’s not something to dismiss,” he says.”But it does mean the ripple effect of that, of increase rents of otherwise affordable units.”
Hatfield says he’s recently had neighbours priced our to their apartments to due to new owners increasing rent.
“Tenants have moved out, they either moved deeper south, or east, or north, and that presents a whole host of other challenges when it comes to acquiring services and transportation,” he says. “We are just seeing the ripple effect, there are obviously unintended consequences.”
One could argue that you don’t need to live uptown. Renters can get more bang for their buck if they expand their search to other neighborhoods like the north end, lower west side and east side.
But for those already on a modest income, that can present a whole new set of challenges, particularly with transportation if you don’t have a vehicle.
“We don’t even have Sunday bus service anymore, so if you live on the lower west side and work at the mall, good luck because you’re not even near the main bus route of King’s Square to get anywhere,” says Farrar.
“I’m concerned about the people who live in the city in general. I’m concerned about the fact that there is no limit on how often they can increase rent or how much. It just feels like there is a constant anxiety.”
Not Just A Saint John Problem
The Maritimes is often boosted for its low cost of living and quality of life, but situations like Farrar’s are not just happening in Saint John.
Last week, CBC reported on a Moncton man who’s rent will be increasing by $450 a month in January with no upgrades.
Farrar says her sister in Fredericton also dealt with a similar situation.
“She got evicted because they wanted to renovate the building, and then it was too expensive for everyone to move back in afterwards,” says Farrar.
RELATED: Why A Halifax Landlord Nearly Doubled The Rent For One Of His Tenants
Rising rents have also been a problem in Halifax, where they’ve typically been higher than the rest of the region. Last week, Huddle spoke with a landlord who doubled the rent of one of his tenants to force her to move so the building can undergo renovations.
Who’s responsibility is it?
Legislation and regulations around affordable house fall under provincial jurisdiction.
In New Brunswick, rental rates are left to the market. Landlords can use the market to determine what they can charge tenants and get a return on their investment.
Though the market can sort out a lot of things, Hatfield says relying on it too much means people can get left behind. This is especially concerning in a city like Saint John that has a high rate of poverty.
“The market is going to settle some of these things, but we know that left to itself, the market is not going to tend to those of modest incomes,” says Hatfield. “We continue to have one in four families in Saint John that is a lone-parent family, which simply means there is one breadwinner or income-earner. We know that we have 80 percent of lone parents families are female-led, which presents extra challenges for childcare and transportation.”
Some jurisdictions in North America have introduced things like rent controls and inclusionary zoning, where developers are required or given incentives to include a certain amount of affordable units in their new complexes. But Hatfield says a lot of provinces and municipalities hesitate to introduce such measures.
“I think, generally speaking, there is a reluctance by local governments to introduce inclusionary zoning for fear that it will have the developer relocate or move to the suburbs or go to jurisdictions where they feel less fettered,” he says.
New Brunswick does have affordable housing and rent subsidy programs for low-income earners, however, there’s a long waitlist according to data supplied by the provincial department of Social Development. For the Saint John region (Sussex to St. Stephen) 1,125 people are on the waitlist seeking affordable housing, which could be a unit in a public housing or mixed-income complex, or a subsidized private unit.
Farrar would like to see the province introduce legislation that limits how much a landlord can increase rent. But she would also like to see legislation that will help landlords so they don’t need to charge high rents, such as scrapping double property tax.
“I don’t want to come off just blaming landlords, because I know there have been complaints about double property tax, which is often cited as a reason for have to keep rents a little bit high so they can profit and have enough money to run the building and whatnot,” she says.
“I think the problem is really ultimately a [provincial] problem. They”re doing this to the landlords, making landlords feel that they need to make up the money somehow. Then in addition to that, there’s no legislation whatsoever.”
When it comes to New Brunswick actually implementing these types of measures, Hatfield isn’t holding his breath. But he says if things do become too unaffordable, the province will eventually have to act.
“I don’t see a political willingness, but clearly if we start reaching the point that the working poor or the working cash-strapped folks can’t live in safe affordable housing, then the province will have to step in and do something,” he says.