From, Realtor Terry Black
There is no doubt that Nova Scotia has a severe shortage of housing. Deloitte reported in their HRM Housing Development Barrier Review that 7,600 housing units are needed annually between now and 2027 to meet the target of 525,000. The reported annual figure for housing units created historically is 3,000. So, as you can see there is quite a shortfall considering the population growth of the province and in particular HRM.
The 4th Quarter Canada National Multifamily Report issued by YARDI indicates Canada as a nation had only 12,500 rental unit starts in Q2 2022. With single family housing starts slowing compared to higher density housing starts increasing (due in large part to cost of land, labour & materials) the housing crisis in Nova Scotia will dramatically worsen for years before it dissipates.
Despite the Houston government blaming previous provincial governments for not increasing housing, they broke an election promise and imposed and maintain a dysfunctional Rent Cap. The Provincial Government’s rent cap policy (landlords can increase rent a maximum of 2% annually) during a time of double-digit inflation has caused 12,000 rental units to be considered being sold by landlord owners (October 2022 IPOANS Survey combined with 2021 Survey)
Note that these 12,000 units that are being prepared to be sold going forward are those reported by IPOANS membership only. They would not include the thousands of other properties owned by property owners that are not members of IPOANS. The listing of 12,000 rental units will, if recent history repeats, be sold and occupied primarily by new owners. It doesn’t take a rocket scientist to predict what the removal of 12,000 apartments from the market will do to thousands of Nova Scotians vying for rental accommodations.
The shortage or rental housing situation is further exacerbated by the historic shortfall figure of 3,000 units created annually. Further many landlords (thousands) have decided to withdraw their rental properties from the longterm rental market and offer them as short-term rental accommodations for the tourism industry and optional housing industry (that has been created in part by the rent cap). Apparently, many people cannot afford or are unwilling to pay $500 per night for hotel accommodations but are willing to pay much less for short term rental.
Given the increase in immigration and the large number of Nova Scotian’s that cannot afford to buy housing and forced to rent it is baffling why the Provincial Government is so out of touch with reality for housing. The current market demand, inflation and high cost of everything has caused Nova Scotia to have the highest average rent increase in Canada in 2022. Average rents are up 35.5% to $2,453.00. This is actually higher than some markets in the GTA!
Given that our province needs 7,600 more housing units (single family and apartment dwelling units) and that we are likely to lose 12,000 in the next 12 months due to a failed Houston policy is it economic opportunity or public responsibility for everyday Nova Scotian’s to do our part where the government has failed? I leave that for others to debate. Nonetheless the need has never been more desperate for property owners to develop their residences for Secondary Suites.
A next article will touch on the Pros and Cons of adding a Secondary Suite. There are many and if you are considering adding a suite hopefully, they will help.
Photo by Pixabay: https://www.pexels.com/photo/aerial-view-architecture-autumn-cars-280221/