New Brunswicker renters only have a few days left before a long-awaited rent cap comes into effect across the province.
Starting Saturday, a three per cent rent cap will take effect. The Liberals promised it during the campaign last fall and was one of the first changes they made as the new government.
“Over the past four years we’ve seen an increase in renters by almost 40 per cent,” says Housing Minister David Hickey. “That’s why we felt it was important to react in a quick way in enacting this legislation as fast as we could to make sure that it had the most impact it could for the more than 40,000 New Brunswickers that rent.”
Under the new cap, landlords must give tenants a six-month notice ahead of any three per cent rent increase, which can only be done once every 12 months.
ACORN New Brunswick, a tenant advocacy group, says before the rent cap there were multiple reports of landlords raising rent by 60-to-70 per cent throughout the year.
Nichola Taylor, chair for the New Brunswick branch, says it has been a long fight to get a rent cap in place for the province. She adds renters she has spoken with are feeling relief but claims there are still ways landlords can raise the rent.
“For example they can switch leases to fixed term leases, or they can use things like cash for keys, which is like a bribe, giving tenant cash to get back the keys so they can get somebody else in there,” says Taylor. “We’ve seen (examples) across the country as ACORN members happen in other provinces and we want to avoid happening here, because we know that it will happen here now that there’s a cap in place. We need the Residential Tenancies Act to be overhauled, really, and to be amended to make sure that these loopholes are closed for tenants.”
To celebrate the return of the rent cap, ACORN will be holding rallies in Fredericton and Moncton on Friday.
Will Scholten, president for The New Brunswick Apartment Owners Association, disagrees with the decision and is trying to work with the government on the new legislation so it does not affect the rental housing market.
He says landlords primarily disagree with the decision due to the lack of cost control on their side.
“If our costs are controlled at three per cent and controlling rents at three per cent, it’s perfectly acceptable,” Scholten says. “But when the major costs that we have, the costs that the government controls, are flowing through at 10 per cent and we’re being asked to accept three per cent control on the revenue side, then there’s an imbalance there. That’s a balance that the government needs to look at.”
If the issues are not addressed, Scholten says he can see some apartment owners getting out of owning buildings or running into financial problems with their properties.
The government has eliminated the provincial tax on new multi-unit buildings to help address these concerns, but Scholten says it does not even the scales.
“If we have a situation where we have rent control at three per cent and we have costs that they control will be going up 10 per cent on a tax rate that is already 1.47 times higher than the rest of Atlantic Canada, it will absolutely affect development,” he says.
Scholten says a letter signed by around 60 New Brunswick developers has been sent to the province in hopes of arranging a meeting to further discuss their concerns, but they have yet to hear back.
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