More than 60 developers from around New Brunswick met for a summit at the Fredericton Inn Thursday to discuss the current state of the province’s rental housing.
Hosted by the New Brunswick Apartment Owners Association, the “Building NB: Multi-Family Developers for our Future” summit highlighted areas of concern in the industry.
Sustainable rental operations was one of many topics raised.
“Developers emphasize that they are operators first,” New Brunswick Apartment Owners Association president Willy Scholten told reporters. “An environment that fails to support profitable rental operations will ultimately deter new construction, regardless of incentives like the elimination of PST (provincial sales tax), which was introduced to align with the rest of Canada.”
A balanced approach to rent control measures was also a hot topic. Scholten says developers are not against a rent cap – which was introduced earlier in February at three per cent – but it must reflect and be balanced with operating costs to avoid issues for both landlords and tenants.
Provincial Property taxes are currently a 10 per cent, a seven per cent difference to the rent cap. Scholten says the discrepancy will push local developers elsewhere.
“And it will encourage national developers to stay away from New Brunswick, making it extremely hard for the province to meet its goal of adding 30,000 units in the province,” says Scholten.
Scholten says developers want to work with the province to find a solution that benefits both renters and landlords.
Fixed-term leases, regulatory stability and the need for a sunset clause, and an annual review and costs adjustments were other points raised.
“Finally, the panel urged the creation of a formal appeals process with the [Tenant and Landlord Relations Office] for situations where operating costs significantly exceed allowed revenues,” Scholten says. “This mechanism would ensure that property owners are not forced into untenable positions without recourse.”
Housing Minister David Hickey attended part of the summit. He says it served as a chance for him to not only meet with the province’s developers but also share the government’s standpoint on where they would like to see construction go in the years ahead.
“We need to make sure that New Brunswick’s development is the most competitive in Atlantic Canada,” says Hickey. “We want to be really ambitious on it. That’s why we stepped up with the removal of the HST as one of the first things we did as a government, and we want to make sure that’s balanced with making sure that we are protecting tenants.”
Hickey adds he understands developers’ standpoint on the discrepancy between property taxes and the rent cap. He says he plans to do what he can to change legislation to achieve a greater balance.
“We want to make sure that we’re achieving the targets of that 30,000 [new units] number in the next five years.” Hickey says. “That’s why we are taking the steps we are, making sure that we are listening to the concerns of the developers. We’re doing so in a way that listens to their interest, make sure New Brunswick’s competitive, make sure attracting new developers, and make sure we are getting more cranes in more municipalities across New Brunswick.”
“While developers are eager to work collaboratively with the government on establishing sensible rent regulations, a framework that fails to balance affordability with the economic realities of property operations will ultimately deter new development and the quality of housing in our Province,” Scholten says. “Ensuring that property taxation and operational costs are addressed is critical for maintaining a vibrant and sustainable rental housing market in New Brunswick.”
Chair of New Brunswick ACORN Nichola Taylor says finding available and affordable units is harder then ever.
“I see this is a big issue for this new government,” Taylor says. “They have to tackle this because we see we do see lots of buildings going up. The question is, are they affordable or not?”
Taylor says the demand for units outweighs the number available.
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