N.S. Landlord Lobby Says Extended Rent Control Measures Hurt Small Landlords
HALIFAX—A lobby group for residential landlords in Nova Scotia says the provincial government’s extended rent control measures will hurt small landlords and could cause them to pull their units from the market.
The Investment Property Owners Association of Nova Scotia (IPOANS) represents property owners who control more than 45,000 rental apartments in the province.
The group’s executive director says the government’s new housing plan is a “disingenuous” departure from promises its leader made just weeks ago.
For months, Premier Tim Houston has been adamant that rent control isn’t the solution to the province’s housing crisis. Many took his repeated, strong assertions to mean his government wouldn’t extend rent control measures past their planned February expiration.
Russell says the government’s decision to extend the measures for two more years was a “disingenuous” move.
He says IPOANS wasn’t given any warning about Houston’s announcement and has had “very limited” communication with the government about the housing crisis.
“But I guess they consider those limited conversations as consultations,” he said.
Russell’s biggest concern is that rent control will make it tough for landlords to keep up with expenses. He argues a 2 percent rent increase won’t even cover the “skyrocketing” cost of insurance, let alone rising heat, maintenance, and other costs.
He says small landlords will feel the most pain, and many might opt to take their rentals off the market entirely.
“There are more than 5,000 small landlords [in Nova Scotia] who have put in considerable risk financially. Now their investments are in jeopardy, so it’s going to be very hard on this market,” he says.
“I can’t predict what’s going to happen, I just know that in [other] rent control jurisdictions you see a decrease in the small landlord market as they will exit the business—or they will take their units off-market until they get a clear indication what the government regulations will be in the long term.”
That hesitance might not be limited to smaller landlords.
Russell claims IPOANS has heard from out-of-province developers and property management companies that are now reassessing future investments in Nova Scotia.
He did not provide any additional details about which companies he’s had those conversations with.
RELATED: Houston Extends Rent Control, Unveils Provincial Housing Strategy
Russell believes today’s rent control reversal means there’s no guarantee the government will ever eliminate the rent cap.
“This is politics. In two years we’ll be closer to another election and quite frankly you can see the rent control being extended again,” he says. “This could be a longer-term strategy for the Progressive Conservatives.”
Rent control is popular among most voters, so it’s not hard to envision the government keeping it in place. Russell argues the government’s decision to extend the measure has a lot to do with public perception of landlords.
As the housing crisis has unfolded in Nova Scotia, there have been several reports of landlords slapping huge rent increases on their tenants.
Russell says those “anecdotal” cases are driving the narrative that landlords are all greedy and heartless and that rent control could keep them in check. It’s a narrative he argues doesn’t line up with reality.
“I think [those reports] played a significant role in the government’s decision. And that is what happens when you are dealing with populism and a populist movement, decisions are based on anecdotal evidence. But the empirical data tells a completely different story about the business the apartment rental sector operates in.”
Lots of economists argue rent control hampers development. The province’s affordable housing commission even recommended against long-term rent control as a solution to the housing crisis.
RELATED: Why Rent Control Isn’t The Answer To Rising Housing Costs In N.S.
However, there are greedy and heartless landlords out there and rent control does protect their tenants. Houston admitted as much in his Oct. 20 announcement.
Russell argues the best way to keep bad landlords in check isn’t through rent control, but a healthier market.
“If housing would have been taken seriously back in the 90s as an issue, and the rental market was robust, you wouldn’t have a small minority of landlords operating where they are, because the market would take care of them. So it definitely is a result of a lack of supply,” he says.
Trevor Nichols is a Huddle reporter in Halifax. Send him your feedback and story ideas: [email protected].
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