N.B. rent cap will remain at 3% for another year, minister says

Yahoo

2 days ago

New Brunswick's rent cap, introduced after the Liberals won last fall, will remain at three per cent for the 2025-2026 fiscal year, Housing Minister David Hickey announced in the legislature Wednesday.
"We've seen vacancy rates largely stay the same," Hickey said when asked by reporters why he came to his decision.
The cap means landlords cannot increase rent more than three per cent annually. Landlords are allowed to increase rent up to nine per cent if they apply to the province and prove the increases are needed because of renovations to a their units.
When the rent cap was put in place, there was no expiration date, although the percentage is reviewed every year.
Several loopholes that critics have pointed out, including that the cap isn't tied to a unit, will remain. This means landlords cannot raise rents on tenants renewing their leases, but if a tenant moves out, nothing stops a landlord from increasing the rent for the next tenant.
Landlords can also use a fixed-term lease to increase rent. When a lease ends on an agreed-upon date, the landlord can change the price in the new agreement, regardless of the cap.
When asked why this wasn't addressed, Hickey said the current rent cap has shown a "stabilization" of rent prices in the province, "and that's why we think that there's a need to continue it at its current level over the next year."
WATCH | Housing minister says rents in the province are stabilizing:
Hickey said looking into that question will be part of a larger review of the Residential Tenancies Act — the legislation that lays out rules for renters and landlords — starting in the fall.
He said the review will ensure the act "is reflective of the actual market conditions and reflective of what it actually means to be a renter in New Brunswick."
"Many landlords can be incredibly creative when it comes to getting their money," said Nichola Taylor, chair of ACORN New Brunswick, a tenants' advocacy group. "So we need to make sure that these loopholes are closed and that tenants have better protections in this province."
She said the cap has brought stability and been a "breath of fresh air" for renters, but she's also looking forward to the fall review.
When asked why the province hasn't gone ahead with promised property tax reform, Hickey said landlords would appreciate the province's proposal to freeze property tax assessments for 2026 as a move to help with stability.
But New Brunswick Apartment Owners Association president Willy Scholten said he was concerned about municipal property taxes increasing, despite the provincial assessment freeze and rent cap, because it risks "throwing everything completely out of balance."
Scholten also said he disagrees with the idea of tying the rent cap to a unit, because landlords "have a great deal of cost" associated with turning over a unit between tenants.
The association has been talking to Hickey, and Scholten said he hopes to be at the table in the fall as well.
Interim Progressive Conservative Leader Glen Savoie was quick to question the announcement.
"The government has said that they want to deal with housing" Savoie said to reporters. "Are there more people or less people unhoused now? Have the actions of this government improved the situation?"
"I would argue that they're not making the headway that they're trying to promote, and we should make sure the situation is something that's really looked after rather than talking points and things that they're trying to do."
Under the Blaine Higgs government, a temporary cap on increases was implemented in 2022, but this ended in 2023.
Other measures were put in place instead, including a rent bank and an option for some rent increases to be phased in if they exceeded the inflation rate.
Green MLA Megan Mitton told reporters she was glad to see the rent cap still in place and that she hopes it remains permanent.
"I do think it's needed to preserve what affordable housing we do have left."
She said she'd like to see the rent cap tied to units and hopes this will be included in the fall review.