Halifax Developer Says Rent Control Puts Freeze On His Building Upgrades
HALIFAX – Many Nova Scotians were surprised, and relieved, on Wednesday when Premier Tim Houston announced the two percent cap on rent increases would remain in place until the end of 2023. But one person who was disappointed and shocked by the news is Halifax developer Peter Polly, owner of Polycorp.
On top of being a prominent builder of rental units, Polly is a part of the province’s Affordable Housing Commission, which just this year advised against rent control.
“Rent control does not work. It’s been studied to death, and it’s shown to be a failed public policy,” says Polly.
“To see the government thumb their nose at the largest compilation of industry and experts that’s ever been compiled in this province … is highly offensive to me as a business owner.”
Polly is now warning renters, and stakeholders, that there may be unforeseen consequences to extending rent control for two more years. He has already advised his own property managers to hold off on discretionary upgrades and maintenance in light of the two percent restriction on rent increases.
“We have people working every day trying to improve our units, installing new flooring, installing new countertops; with this (rent control), I’m looking at it and saying: ‘why bother?’” Said Polly.
For context, this would not be a small sum of money that’s being withheld. Polly currently owns 500 rental units throughout the HRM and he estimates he spends close to $1-million per year on maintenance and upgrades. So that’s also less money being put into the economy.
Several studies have noted that deferred maintenance is one of the more common drawbacks of long-term rent control in other jurisdictions. One of the more recent studies that back this up was released this year by IPOANS, which paid Gardner Pinfold to do an independent study on the housing crisis in Nova Scotia.
RELATED: Why Rent Control Isn’t The Answer To Rising Housing Costs In N.S.
This shouldn’t, in theory, be a big problem in Nova Scotia if rent control only remains in place for two more years. But only time will tell if it gets extended again. There are many advocates in the province, such as ACORN and the NSNDP who are lobbying for permanent rent control.
Polly compares the public’s focus on rent control to a doctor who treats a symptom rather than the illness. High rent increases, says Polly, are the result of governments ignoring the affordable housing supply problem for decades.
The outspoken developer says he and others have been trying to convince the government for many years that there would be a huge affordable housing problem if they did nothing to increase the rental stock. He says the government treated the issue with “arrogance and indifference.”
“Especially in the last 10 years, as the government has done things to restrict supply and increase costs, we have been quite aggressive in referring to impact on housing affordability and it has been summarily dismissed time after time after time.”
“Now they’re expecting the private sector to pay for that and it’s going to come out of the hide of the general population and our renters because, as of today, I see no need to spend any more than the bare minimum on our properties.”
RELATED: ACORN Applauds Rent Control Extension, But Will Keep Lobbying To Make It Permanent
Polly is also against the province’s plan to give inclusionary zoning powers to Halifax’s municipal government. This will allow the city to force developers to set aside a certain number of affordable units for a project to get approved.
Polly said, as an example, if 10 percent of units have to be earmarked as “affordable”, the other 90 percent will pay extra to make up the costs.
“Money doesn’t drop out of the sky to make units more affordable than what they would otherwise have been,” says Polly. “For every dollar that needs to be given up to make units more affordable, somebody else needs to pay for that.”
“Nothing in life is free.
Derek Montague is a Huddle reporter in Halifax. Send him your feedback and story ideas: [email protected].