After hearing from unhappy landlords, advocates, and tenants, government MLAs voted down amendments to their bill extending Nova Scotia’s temporary rent control.
The legislature’s Law Amendments Committee heard from 14 speakers about the Interim Residential Rental Increase Cap Act on Monday. As the Halifax Examiner reported last month, the Houston government introduced the bill to extend the cap on rent increases to the end of 2025.
The cap, currently 2%, was to expire at the end of 2023. The government said it intends to set the new annual cap at 5%. It didn’t put that figure in the legislation, opting to use the regulations to set the number later.
Unsurprisingly, landlords opposed any cap on rent increases.
But much of the talk at the committee on Monday was about what wasn’t in the bill: any movement on the issue of fixed-term leases. Landlords have been using fixed terms to skirt the rent cap, booting tenants and jacking up the price of their units for the next inhabitant above the 2% cap.
‘We’re being torn out of our communities’
Robyn McIntosh is a tenant looking for a new place to live this fall. She’s been on fixed-term leases for almost six years, renewed annually with “reasonable increases.”
“This year, without explanation, it was not renewed,” McIntosh told the committee.
“My small, 600-square-foot one-bedroom apartment is moving from $1,248 a month to $2,195 come September. This increase of $947 per month was made specifically to avoid the rent cap, and I along with other people in my building are being forced to leave our homes at the end of the summer.”
McIntosh said her story is not unique.
“Unfortunately this is not a case of some landlords doing this to some tenants. Fixed-term leases are increasingly becoming the only option we have, and with them comes housing instability, at a time where we are seeing unprecedented numbers of people actively homeless across this province,” McIntosh said.
“We’re not just tenants and we’re not just renters, we’re a community of people. We’re 300,000 individuals spread across this city and around this province, and we’re being torn out of our communities by this housing crisis.”
McIntosh asked the committee to amend the Residential Tenancies Act to close the fixed-term lease loophole.
Landlords say fixed terms reduce risk
Landlords at the meeting said they use the leases to test tenants who wouldn’t typically qualify for an apartment.
“We use them to decrease our risks when leasing to renters with poor or no credit history or landlord references; we use them to protect our tenants and ensure their right to peaceful enjoyment of their homes; but we also use them to protect ourselves against abusive renters,” Ursula Prossegger, president of Urchin Property Management, told the committee.
“Regrettably, a small number of landlords in our industry are bad apples, and display a lack of responsiveness towards maintenance concerns. However, when we are subject to such abusive behaviour with no available recourse from police or residential tenancies, it becomes understandable why we may at time struggle to address tenant issues.”
Landlord Amanda Knight told the committee a story about renting to a single mother with two kids and a part-time job. She signed a three-month fixed-term lease.
After the three months, the woman paid her rent on time and had secured a full-time job. She then signed a new nine-month fixed-term lease.
“My tenant was late paying rent seven of the nine months,” Knight said.
“It is because of the ability to freely use a fixed-term lease at my discretion to protect my property and my existing tenants that I initially rented to her. If fixed-term leases did not exist, this tenant would not have qualified to rent one of my properties.”
Issmat Al-Akhali told the committee he uses fixed-term leases for all tenants at his private student residence. He argued fixed-term leases allow landlords to test tenants and then offer them long-term leases if it works out.
“When we remove that ability, the main impact happens on minorities. It happens on new immigrants, it happens on new renters, including students,” he said.
“Because without good credit, without a rental history, without solid income, nobody will want to take chances on renters when there is such high demand in the market, when you can find solid renters that you don’t have to worry about, anywhere.”
Lawyer says fixed-term leases ‘abused’
Tammy Wohler is a lawyer with Nova Scotia Legal Aid who represents low-income tenants. She suggested the government amend the Residential Tenancies Act to clarify what fixed-term leases are intended to be used for. Wohler argued fixed-term leases were never intended to be used as probation.
“In my view I think this is a significant concern that we feel that we can use fixed-term leases for certain kinds of tenants and not others, and I think it raises a spectre of human rights,” Wohler said.
“I think we want to ensure that our Act does not inadvertently allow or condone human rights violations.”
Wohler said she recently represented a client whose landlord bought a building and tricked all the tenants into signing two-month fixed-term leases.
“I can tell you that the fixed-term leases are being abused and used against tenants with existing security of tenure,” Wohler said.
Some of the landlords who spoke argued there’s no power imbalance between landlords and tenants.
Christine Saulnier, director of the Nova Scotia chapter of the Canadian Centre for Policy Alternatives, said the imbalance is inherent.
“Housing as a human right means tenants have a right to housing. Everyone in Nova Scotia, indeed, has a right to housing. Landlords do not have a right to profit off of housing,” Saulnier told the committee.
“The imbalance that exists … is clear. Housing is not like other market items. Landlords absolutely have more power than tenants do. It is not easy to move. We know for one that it’s very expensive. For another, it’s almost impossible in this market to find anything else. That alone means that the power is in the landlord’s favour.”
Amendments requested, moved, voted down
Saulnier asked the committee for some specific amendments to the bill before it. She wanted vacancy control, that is, rent caps tied to units. And she argued the government should tie the annual allowable rent increase to that of land-lease communites.
The Residential Tenancies Act regulations contain a formula to determine the allowable increase for those communities, where people often own their home but not their land. The formula is based on the last two years of inflation.
Joanne Hussey, a community legal worker at Dalhousie Legal Aid, suggested the same amendments.
“The financial incentive for landlords to end tenancies is remove if the rent cap continues to apply regardless of who occupies the unit,” Hussey said.
“If we fail to address this issue, as decision makers you must understand that the continued rent cap will not have the desired impact of keeping tenants housed.”
NDP MLA Gary Burrill moved two amendments to the bill. The first would’ve legislated the rent caps for 2024 and 2025 at 5%.
The second would’ve closed the fixed-term lease loophole. It would ban landlords from hiking rent above the cap after the expiration of a fixed-term lease.
The government used its majority on the committee to vote down both amendments. It sent the bill back to the house for third reading without amendment.
The Tories siding with the parasitic landlord class? Shocking.
The ‘parasitic landlord class’ includes Canadian public sector pension plans which have significant investments in apartments through REITs. In Nova Scotia the provincial pension plan is invested in two downtown buildings as well as out of province buildings. The HRM pension plan also invested in apartment buildings.
If you have any type of insurance you are also indirectly invested in REITs.