RENT CAP A VICE-LIKE TRAP FOR LANDLORDS IN NOVA SCOTIA
Amanda Knight lives in Pictou County and continues to own rental properties in Colchester and Pictou counties, having recently sold her building in Colchester County. She is a member of the board of directors of the Investment Property Owners Association of Nova Scotia.
Earlier this year, I decided to sell one of my multi-unit properties, as I can no longer afford to cover housing costs for my tenants.
Over the last few years, I have enjoyed buying older properties in Colchester and Pictou counties. I put a lot of time and energy into them — starting my days around 5 a.m. and ending them around 8 p.m.
Fixing up run-down and abandoned homes to provide safe, clean housing options for people in rural Nova Scotia gives me a great deal of personal satisfaction.
When I chose to get into housing, my business plan was based on making enough money to cover my costs and set money aside for repairs and ongoing maintenance.
Most tenants, although not all, pay their own power. My putting aside money for improvements supported the overall energy efficiency of my units, keeping everyone’s costs lower.
It was never my intent to buy and then sell a property in such a short period of time. This is all due to the Nova Scotia government’s two per cent rent cap – first introduced by the Liberals, cheered on by the NDP (who call for it to be made permanent) and embraced by the Progressive Conservative government, even though they promised not to bring it in.
Having open communication with my tenants — and an understanding from them of the skyrocketing costs to maintain this building — provided an opportunity for me to work with my tenants on an agreeable rental increase amount.
Putting power in the tenant’s name, combined with a rent increase above the capped two per cent, but well within a manageable amount for the tenants, would have allowed me to keep this property. Instead, I got out. Not because I wanted to. Not because I wanted to take advantage of a hot real estate market. But because the rent cap has forced me out.
What choice did I really have? The price of insurance, heat, power, materials, labour and taxes are all going up. Capping a rent increase at two per cent eliminates any option for tenants and housing providers to work together to come up with an affordable housing solution.
Unfortunately, I am not alone. Many of those who are buying properties like mine are moving into them as new homes (which results in existing tenants being forced out). At the end of the day, the ultimate victim of the two per cent rent cap isn’t the small private sector housing provider. The rent cap financially hurts housing providers, but they have the choice to get out, sell their properties and move on. The person who’s really hurt the most by rent control is the tenant who ends up without a home.
Multi-year rent control is making Nova Scotia’s housing crisis worse — just as many of us warned Nova Scotia MLAs from all three political parties last fall when the rent-cap law was put into place.
Pleas like mine, delivered at the law amendments committee of the Nova Scotia legislature fell on deaf ears.
Last month, Adsum for Women and Children noted a spike in the increase of people looking for emergency housing. They indicated it was caused by property owners selling their buildings. Nova Scotia can and should do more to increase the delivery of housing by the public and not-for-profit sectors.
But no true solution to our province’s housing crisis can exist without working with those who provide — and will always provide — most of the rental housing in the province. That’s the private sector, in particular many small operators like me.
In May 2021, after a careful review of all the evidence, the independent Affordable Housing Commission of Nova Scotia recommended an end to the two per cent rent cap. That was an evidence-based recommendation.
The commission also recommended that government cooperate with private sector rental housing providers, through organizations like the Investment Property Owners Association of Nova Scotia (IPOANS). That hasn’t happened, either — on the rent cap, or any of the many laws and policies that affect our sector and make the housing crisis worse.
Last year, Premier Tim Houston was elected to provide “solutions for Nova Scotians.” Nova Scotians like me are ready to share our solutions for housing. But we need to be invited to the table.
Story by: Saltwire