Minister of Housing nixes rent cap, but advocates say it's 'the only way' to resolve crisis

The provincial government’s housing strategy has been met with mixed reviews from advocates who say it doesn’t go far enough to address New Brunswick’s simmering housing crisis.

Some advocates welcomed new measures in the 32-page strategy report — optimistically titled Housing for All (PDF) — but said those efforts will accomplish little without a hard limit on rent hikes.

Advocates from groups including NB ACORN and the NB Coalition for Tenants Rights have campaigned for the province to reinstate a rent cap, a policy which the Higgs government implemented temporarily in 2022. 

“If you are looking to make a big impact in securing affordable housing, a rent cap tied to a unit is really the only way,” said Kristi Allain, a professor of sociology at St. Thomas University.

But when Jill Green, Minister of Social Development and the Minister responsible for Housing, announced the new strategy recently in Moncton, she made it clear that a rent cap wasn't part of the picture.

“I know everybody's going to ask me about it if I don't talk about it, so I'm going to talk about it," she said. "The rent cap is not in the strategy.”

In its communications about the new strategy, the provincial government has highlighted programs including a rent bank, which is expected to provide short-term loans of about $1,500 to households struggling to make ends meet. The province plans to spend $3 million over the next two years to establish the fund. 

Other measures highlighted by the provincial government include a new “direct-to-tenant benefit,” with $22 million annually going to families and seniors.

Darcy Wallace, a volunteer with NB ACORN, said the strategy has its good sides, but he suggested that millions of dollars in benefits in the absence of a rent cap could further stoke the overheated market.

“These new announcements on subsidies will have the unwanted effect of increasing rent prices by pumping more money into the market and inflating the price of rent,” he said. 

Interest-free loans

There was some confusion about the planned rent bank program in the days following the announcement, with some reports indicating that the rent bank would charge interest on those loans. Green herself referred to low-interest loans in an interview with CBC Radio. 

But scholars researching rent banks pointed out that those agencies don’t typically charge any interest. 

“They can cover one or two month's rent, and there's no interest on this,” Allain said. “In fact, the repayment schedules are often amortized over long, long periods of time at no more than $20 or $25 a month with, with no interest.” 

A government spokesperson confirmed that the province intends to make the loans interest-free following queries from the NB Media Co-op.

“Our goal is to keep more money in New Brunswickers’ pockets,” the spokesperson said in an emailed statement. “The intent is to provide short-term, interest-free loans, but as we have said, several details on the rent bank are still being finalized.” 

Subsidized housing backlog

During the June 29 media conference, Green emphasized the government’s new $22 million direct-to-tenant benefit. 

“This is the biggest game changer in the entire strategy, in my opinion,” she said. 

The benefit is meant to remove 3,000 households from the province’s waitlist for subsidized housing. 

That list has grown rapidly over the past few years, practically doubling from 6,000 in 2019 to reach 11,000 this year.

Allain, a member of the NB Coalition for Tenants Rights, said the benefit will help tenants to afford housing. But without a rent cap, she suggested it amounts to a subsidy for private landlords.

“We want to see the government helping tenants who are in unaffordable situations, but in my mind, it would just be much more logical to impose a rent cap,” she said. 

Business-friendly approach draws criticism

The provincial government said its new plan is the result of input from “hundreds of stakeholders," such as developers, non-profits, landlords and tenants, notably during a housing summit that took place in Saint John in May. 

That event, which attracted protesters, was organized by the province in cooperation with the New Brunswick Real Estate Association, a group that represents realtors.

Speakers at the summit included officials from groups such as the New Brunswick Business Council, the Greater Moncton Home Builders Association, and the Canadian Real Estate Association.

New Brunswick lost more than 8,600 units of affordable housing between 2016 and 2021, according to data from Statistics Canada. Image from NB Coalition for Tenants Rights and the Housing, Mobilization and Engagement Research Lab at UNB Saint John.[/caption]

The NB Media Co-op asked Green for her response to criticism that the consultation process was too heavily weighted towards business interests.

She said that the association had already done some groundwork for a housing summit, and “let us hijack that [event] to be able to do the work that we needed to do very, very quickly to get this strategy completed.”

Green said she believed the consultations were thorough. "I feel like I've heard all the different voices around this." 

Allain said a market-driven approach to business won’t resolve the housing crisis. “We cannot depend on capitalist developers to build us out of this housing crisis,” she said.

She noted research showing that New Brunswick lost more than 8,600 rental units costing less than $750 per month between 2016 and 2021.

David Gordon Koch is a journalist with the NB Media Co-op. This reporting has been made possible in part by the Government of Canada, administered by the Canadian Association of Community Television Stations and Users (CACTUS).