Landlords removing units from rent subsidy program, citing increased operating costs
CBC
A senior civil servant in the New Brunswick Housing Corporation says his office is looking into an increased trend in landlords taking units off the corporation's rent subsidy program.
Gregory Forestell, the corporation's vice-president of housing programs, says landlords are opting out of the rent subsidy program as early as five years after entering into agreements with the provincial body.
"They're seeing the opportunity to see a better return on their investment. They're paying off their loan to us and then taking those units out of the program.
"So, not every landlord, but some landlords are doing that, and so it's significant enough that we've noticed it."
Forestell made those comments in an interview Wednesday following a panel discussion at the Canadian Housing and Renewal Association's National Congress on Housing and Homelessness, happening this week in Fredericton.
The panel included Perry Kendall, CEO of Habitat for Humanity New Brunswick, who pointed out the trend as one that's concerning to him.
"There are more and more landlords opting out of the provincially subsidized program knowing the demand is there, and they're able to get higher rents," Kendall said.
"So that's a concern. We're losing more affordable units than we're building."
Recent data from the Department of Social Development shows the wait list for an N.B. Housing unit in the province doubled in the past five years, going from about 5,000 households at the end of 2019 to 10,733, as of Feb. 1.
Forestell said he didn't have statistics on the number of units that have been removed from the rent subsidy program in recent years.
He also couldn't say for sure whether the increase in N.B. Housing's wait list is related to the loss of subsidized rental units.
Forestell said the N.B. Housing program helps developers fund the construction of apartment buildings by offering loans of $70,000 to $80,000 for each unit that's to be subsidized.
Landlords will then typically agree to pay off the loan over a 16- to 20-year period, over which time the tenant of the unit will only have to pay the landlord 30 per cent of their income, while N.B. Housing pays the difference.
Forestell's office is looking at the program's criteria to find "a sweet spot" to encourage landlords to keep their units in the program.
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