Rent Control Comes to Nova Scotia — For Now

by | Dec 14, 2020 | Rental Property Management Tips

Nova Scotia’s Housing Minister has announced provincewide temporary emergency measures including a limit on rent increases. That rent cap is retroactive to September 1, 2020.

Under the new emergency orders, rent cannot be increased by more than 2% each year. The cap will remain in effect until February 1, 2022 or until the current state of emergency is lifted, whichever occurs first.

In addition to limited rent increases, landlords also are prohibited from evicting tenants for property renovations. The province declared a state of emergency due to the pandemic on March 22, 2020.

While these new orders are temporary, they are intended to buy lawmakers more time to strategize over longer-term solutions to the lack of affordable housing in the province.

The Municipal Affairs and Housing Minister points to health and safety concerns during the pandemic as reason to justify the rent control measures temporarily but promises to work with housing providers to make “evidence-based” decisions for the future.

Until then, the Minister says, the province needs to protect renters from excessive rent increases or displacement.

The new orders also create the Nova Scotia Affordable Housing Commission, comprised of more than a dozen stakeholders from public, private, non-profit, and academic sectors, to make long-term recommendations regarding housing. The first round of recommendations is anticipated by summer 2021.

Landlords have expressed reservations over the sustainability of the rent control initiative, even in the short term. Studies have shown rent control initiatives may exacerbate problems with both availability and affordability by discouraging investment in rental housing, which in turn can drive up market rents. For instance, a study conducted by Stanford University found that San Francisco’s rent control measures caused a 15% decrease in inventory and a 5% spike in rents.

That study recommends lawmakers look into direct rent subsidies to protect vulnerable renter populations, something that Nova Scotia already has implemented. Officials report more than 2,500 households currently receive a rent supplement, and the new Targeted Housing Benefit may help up to 1,700 households across the province.

Tenants decry the temporary rent control measures for not going far enough. ACORN Nova Scotia called the rent cap “an overdue first step” but argues that the measure will not protect tenants once the pandemic is over. In addition to the rent increase limit, tenants want the province to continue to ban evictions for unpaid rent throughout the state of emergency.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

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Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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