The Housing Strategy Will Need More Than Two Years To Work
Posted October 29, 2021
Premier Houston’s housing program is both broad and deep. It even earned some congratulations from the opposition leaders.
Homeless numbers in Halifax are tabulated by the Affordable Housing Association of Nova Scotia, an agency largely funded by the federal government. The Halifax numbers are a little over 400 so it is reasonable to assume that the provincial total is under 1,000.
Given that homelessness is the province’s responsibility, it is surprising that it does not know how many there are outside of Halifax, nor have they set a reduction target for the province.
That said, the efforts should make a significant dent in the number of homeless people. The program will spend $10.1 million on new supportive housing resources; emergency, short-term hotel stays with 24/7 wrap-around supports; maintenance of emergency shelter investments; and support to people transitioning out of correctional facilities.
While media stories about “renovictions” or exorbitant rent increases are distressing, the instances are numerically tiny. Changes to the residential tenancies act provide minor further protections to tenants experiencing unfair treatment.
On the broader question of affordability, the government correctly insists that any sustainable response must include greater supply. There have been several useful initiatives.
- For lower-income and vulnerable people, the province will spend nearly $35 million to support over 1,100 new affordable housing units of which 425 will be new rent supplements. It will also build student residences on three NSCC campuses.
- Municipalities will be able to implement inclusionary zoning which require or encourage affordable housing in new developments.
- The province will identify provincially owned properties that can be used for housing.
- Special tax benefits will attract and retain young tradespeople.
There is not much more that could be done, yet two years is not long enough for the measures to have material impact.
The construction industry is running flat out. Many approved projects have not yet begun because labour is scarce.
Many of the Halifax projects underway are much larger than historical norms and can take 18 months or more to reach completion. Most of the housing stock that will be added before the end of 2023 will have been started before the end of 2021.
Meanwhile, the pressures on overall housing affordability are from sources that we hope to continue. After being stagnant from 2000 to 2015, Nova Scotia’s population has been growing by more than 10,000 people per year.
That was largely fueled by immigration, which was disrupted for the last 18 months by COVID’s devastating impact on international travel. At the same time, COVID led people in crowded big cities like Toronto and Vancouver to reconsider their living circumstances.
Many decided to seek more space in nearby smaller cities and towns or in Atlantic Canada. They found that their money bought a lot more house or apartment in either case. Prices rose rapidly.
In 2021, Nova Scotia’s growth from net interprovincial migration has offset the drop in international migrants. The former is likely to persist while the latter recovers. Immigration can be an important source for skilled tradespeople.
Nova Scotia will add more than 10,000 people this year and move toward 20,000 annual additions over the next few years. By the end of 2023, we need approved land and available labour to build at least 6,000 units per year.
Meanwhile, continuing the 2% rent control, which also benefits wealthy renters, will create a trap. It does not affect the rental rates in new buildings, nor the rents on a unit when a tenant leaves. Market rates for those will move further and further above rent-controlled rents.
Simply lifting the cap at the end of 2023 will result in an abrupt movement toward market rents. For low-income tenants, the province should plan for a gradual easing of the rent cap and/or some transitional rent supplements.
Meanwhile, NDP leader Gary ‘The Freeze’ Burrill wants rent control to be permanent. He similarly wants the province to buy an underdeveloped property in Dartmouth currently having 397 units on 57 acres where developers could build thousands of units.
This is exactly the wrong response. The province should make plans to support the existing tenants while welcoming the possibility of a big expansion of capacity in a well-located area.
Houston has embraced the opportunity to grow a larger and younger population. Good. Recognizing that supply is the answer, he proposes sensible initiatives toward expanding the pace of construction. Good.
If the plan is implemented well, good progress on homelessness will be achieved. But vacancy rates two years from now will still be low. Market rates for houses and rents will be growing more quickly than inflation.
It is not enough to identify new land for development. It also needs roads, water and sewer connections, and utilities. The number of tradespeople will grow over time, but not all at once. The pace of construction starts can only grow when there is more serviced land and a reliable supply of workers.
The government needs to be more realistic about the time needed to accelerate the growth in housing stock.
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