With residents facing staggering spikes in rental prices, two city councillors have called for the province to revisit rent control.

Sue Uteck and Dawn Sloane received complaints from multiple residents in their districts who in the past year have seen increases in rent by as much as $400 per month, reported the Chronicle Herald this past July. Both suggested that the province consider re-implementing legislation on rental increases.

One year after winning a $25 billion shipbuilding contract, Halifax rests on the verge of a veritable boom. The city and the shipyard are negotiating the terms of the deal, which is expected to create 11,500 jobs and bring an influx of new workers to the city. 

But is Halifax ready for that sort of development? 

One concern is how the city will house all those workers and the new residents the contract attracts. Currently, there is a vacancy rate of 3.2% for the whole of HRM. 

An even a more immediate concern is how the shipbuilding contract will affect existing communities. Even before it was announced, Halifax had seen a sharp increase in rent and a decline in the availability of housing. In 2006, an average two-bedroom apartment cost $760 per month. In 2011, it was $885. As of last spring, it’s now $926 – well above the national average. 

“Many [people we assist] are on income assistance with a housing allowance of only $530. There’s absolutely nothing for $530 on the peninsula or even beyond that. A couple years ago, people were paying $550, or $575, but even those are disappearing,” says Carol Charlebois, executive director of the Metro Non-profit Housing Association, an organization that helps single low-income people to find or maintain housing. “Many of the people we’re working with are eating into their small allowances for food or clothing [to pay for housing].”

Still, Premier Darrell Dexter has said he has no plans to revisit the issue of government-regulated rent. 

The trend of rent increases is especially acute in the North End, where housing is already scarce. Over the past decade, the cost of living has climbed ever higher, often out of reach for its residents. Many blame the introduction of high-end condos and boutiques, which target consumers outside the traditionally working-class neighbourhood, for driving prices up and smaller businesses out.

Others argue that the development is restoring and injecting new life into the neglected community. 

At the heart of the matter is that much praised and equally cursed word: gentrification.

Gentrification refers to the impact of wealthier people buying or renovating properties in low-income communities. This act raises property value, rental prices and property taxes. Previous residents are often displaced as costs become too great, and higher-income people move in or set up shop, further increasing neighbourhood market values. 

How you see the matter depends on how you understand gentrification.

The most common theory describes gentrification as an inevitable process of urban life. As cities develop, areas experience waves of growth. Whether drawn to the lower prices or the aesthetics, new residents move into neighbourhoods in economic decline. This change to the makeup of the neighbourhood can make it trendier or more appealing, which then encourages entrepreneurs to invest.

The injection of capital brings richer clientele and further development, physically and socially transforming the area from its previous state. While individuals might prompt gentrification, they can’t be blamed for it, since it’s seen as an organic process. 

Since gentrification is inevitable there’s nothing we can do about the displacement of working-class families and people. It’s a zero sum game, goes this theory. 

The alternative theory turns that idea on its head. Instead of being a necessary consequence of individual choices, gentrification is caused by a lack of any checks and balances to ensure equitable growth. 

“[The conventional] explanation completely ignores the role of the government, financial institutions, large real estate developers, profit-hungry landlords, and global forces,” says Capp Larsen, a long time anti-poverty advocate, and current member of an affordable housing co-operative. 

“The major driving force of gentrification is not individuals who rent or buy homes for themselves, but the combined efforts of government policy, real estate developers, large landlords, and property owners who speculate — leaving property abandoned or becoming slum-lords until property values rise,” she adds.

New residents moving into a neighbourhood play a factor, but much more important are the regulations and incentives that mould what form development will take in that community. 

In the North End, the problem is not the waves of residents moving in, but rather that the government has not implemented any measures to keep the area liveable.

Rent control is one such measure. 

As it stands, there are no rent controls in Nova Scotia. While landowners are only allowed to raise rent once every 12 months, there is no limit to the amount they can raise it. 

That’s a recent freedom. For decades, housing prices were regulated in various ways.  Prior to 1951, the federal government managed rental regulations. After that it became a provincial affair, in which Nova Scotia gave municipalities the power to form local councils to control rent increases. Over the next few decades, how increases were regulated changed between uniform percentages and appeals on a case-by-case basis. 

That all changed in 1993 when the Liberal government exempted all residential properties from regulation. At the time, vacancy rates were at 12% in parts of Halifax. 

No wonder Dexter is hesitant to return to rent controls. Many share that sentiment, even in the non-profit sector. 

“Creation of more affordable housing is a better route to go. Rent control discourages the creation of affordable housing,” says Charlebois. 

Larsen agrees, pointing out that rent control is not an end in itself. “Rent control is no substitute for affordable housing. A rent control scheme needs to be present to stabilize the escalating rents while supporting legislation, regulations and policies are implemented to encourage new affordable housing construction or preserve the existing rental housing stock.”

That’s the opposite of what has happened in Halifax. In 1989, a rental review act stripped the regulation of previous incentives, restrictions and mechanisms to protect both tenants and landlords, leaving only guidelines around maximum percentage increases. 

By 1993, it was obvious that this one step approach wasn’t working. So the city scrapped it and let the market dictate rental values. For Larsen, this is why gentrification has become such a destructive force in the city: “an unregulated market encourages profit by limiting supply and charging excess rent based on scarcity or encouraging new construction that is most profitable in the form of suburban sprawl.”

Given the current situation and the looming impact of the shipbuilding contract, now seems like a good time to consider alternatives. 

Rent control is not a one-size-fits-all approach; if the city decides to pursue rent control, it could take a very different form than before. There are plenty of options to choose from. These could include tying rental increases to inflation, while providing reviews on operating costs to ensure profits. Controls could allow for increases based on maintenance, and offer renovation assistance to landlords of low-income tenants. This would guarantee upkeep and return on investments. 

Just as important would be creating legislation to support affordable housing. Many cities regulate cities to do just that. Ottawa mandates that 25% of new rental and owner housing be for low-income renters. San Francisco and Boston takes a similar approach, charging higher-end developers an amount per square foot, which is then used for affordable housing. Vancouver regulates the conversion of rental properties into ownership or commercial uses, specifically limiting the development of condos. Toronto restricts the demolition of rental properties. 

While Nova Scotia has several programs in place to support repairs and renovations for homeowners of low-income properties, and HRM by Design offers bonuses for high-density properties, neither the province nor the municipality has policies in place to increase the amount of affordable housing.

At best, for every floor above the maximum height restriction, HRM by Design charges developers $4 per 0.1 square metre. The money is then allotted to a public benefit, of which affordable housing units is one of many options. 

Charlebois notes that other than small initiatives, there has not been an affordable housing program at the federal level since 1993. There is an agreement between the province and the federal government, but it isn’t enough and doesn’t create or strengthen the non-profit housing sector.

Given both the current and projected shortage, a serious investment is needed to keep Halifax liveable. So while rent control might not be the answer to Halifax’s housing problem, it could be part of it.