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Letter from MHA Dinn to Minister Stoodley on Rent Control

Sarah Stoodley, Minister of Digital Government Services and Service NL

Province of Newfoundland and Labrador

P.O. Box 8700

Confederation Building

St. John’s, NL A1B 4J6

September 12, 2023

Dear Minister Stoodley,

On June 14, 2023 I wrote you about exorbitant rent increases people were facing and called upon your department to introduce rent stabilization measures. I referenced the following two examples to illustrate the problem:

Case 1: Middle age couple

Prior to December 2022 rent was $745 a month. In December 2022 rent increased by $155 to $900. Recently, tenants were notified that as of December 2023 rent will be increased by another $300 to $1,200. That's a 61.07% increase in a little over a year.

Case 2: Senior Couple on fixed retirement income

Prior to December 2022 rent was $1050 a month. In December 2022 rent increased by $70 to $1,120. Recently, tenants were notified that as of December 2023 rent will be increased by $125 to $1,245, an 18.57% increase in a little over a year.

Since that time, I have been contacted by other people, mostly seniors and those on fixed incomes, with similar stories.

Case 3: Single Individual living in an apartment building in the middle of my district.

A new owner bought the building and raised rents from $586 to $1086 starting in January 2024. By my calculations, that's an 85% increase. The tenant is on Income Support. Either CSSD/NLHC increases her rent subsidy or she will face homelessness.

Case 4: Tenants in an apartment complex in Paradise

Tenants will face a 71% increase in a year. In January 2023 their rent increased from $700 to $950. Earlier this summer they received another notice that rent will increase another $250 on January 1, 2024 to $1200 monthly. This is causing significant stress for the seniors living in the apartment building.

Case 5: Residents in an apartment building in Gander

Tenants are facing a 50% increase in rent in a year. In 2022 they paid $600. In January 2023 it was increased to $725. They were notified this summer that their rent will increase by another $175. These seniors have no capacity to absorb the increase.

In your July 5, 2023 response you stated:

"Updated data from Canada Mortgage and Housing Corporation (CMHC) continues to indicate that average rents in Newfoundland and Labrador are rising at a lower rate than those in provinces with rent control measures in place. From 2018 to 2022 the average annual rent increase was 1.94% for a 2 bedroom apartment and 2.24% overall in Newfoundland and Labrador. In Prince Edward Island, Ontario, Manitoba and British Columbia, the average annual rental rates have increased by 4%, 5.29%, 3.64% and 5.18% respectively over the same period."

Would you please explain how CMHC arrived at these numbers for Newfoundland and Labrador? What are they based on? Do they include rent increases in non-market community based housing where rents tend to be capped? Has your department verified these numbers or carried out its own research and analysis on rental rates?

The numbers you quote bear no resemblance to the reality of the people contacting my office about rent increases. What do I tell them? I challenge the CMHC statistics your department uses to excuse government's inaction on rent stabilization and housing affordability and urge you to carry out your own research.

The increases I quoted are far in excess of the 2.85% and the 2.05% annual increases you reference for Newfoundland and Labrador and exceed the 4% increase you reference for jurisdictions with rent control. In April 2022, ninety-nine people were experiencing chronic homelessness. That number swelled to 183 in July 2023 - an 85% increase. Provincially, emergency shelter use has exploded from 173 in January 2022 to 326 in May 2023. That’s an 88.4% increase with the largest numbers - 67.8% - on the Avalon Peninsula. As I stated in my letter to you, the federal and provincial measures you listed will do little to offset the rent increases or help those who have nowhere to live.

You also stated in your letter:

"Affordable housing is a priority for this government. On June 7, 2023, the Government of Newfoundland and Labrador issued a Request for Proposals that will see a $70 million investment in a new 3 year Affordable Rental Housing Program. This program will see the addition of 850 new affordable rental housing rental units throughout the Province. This is in addition to the more than 1000 housing options that have already been created over the last two years." I am having difficulty reconciling these numbers with the reality of people who are calling my office.

1. What has been the response to government's RFP to the $70 million three year Affordable Rental Housing Program? Have contracts been issued to date?

2. Where will these 850 new rental units be located?

3. Will these 850 units be new builds or will they be in the form of rent subsidies for already existing properties?

4. Will these new units be non-market, community based housing? Or will the money be directed to the private sector?

5. What exactly are "the more than 1000 housing options that have been created over the last two years"? Would it be possible to have a breakdown by geographical location, and whether they include emergency shelters, temporary accommodations such as hotel rooms, rent supplement top ups, etc.?

You further stated:

"An important measure to help address homelessness is to increase available rental housing. Investment in residential rental housing is necessary to help increase rental opportunities for residents. Rent stabilization may deter such critical future investment."

At this stage, I would argue that the private market sector is failing seniors and those on fixed or low incomes as well as vulnerable individuals already living on the margins of society.

On Wednesday past, the Premier announced the first ever provincial well-being week to raise awareness of the importance of well-being and the need to address the social determinants of health. These are not just idealistic rhetoric to be trotted out for public relation events. If the provincial government truly wishes to take substantive action to address the social determinants of health and improve the well-being of people struggling with soaring rents, then it should consider meaningful action that will make housing more affordable.

The province must invest in more non-market community based housing. Either that or it must implement rent stabilization or establish a process, possibly through the PUB, where large landlords must justify their rent increases. The current Residential Tenancies process is too cumbersome for renters. Government's reliance on private investors and a market based approach is already failing many people who rely on affordable properties to live. For-profit market-based housing solutions benefit the investor and not the tenants who rent the apartments. If the provincial government continues to rely on the private for profit system, then it must require that a percentage of any housing developments be designated below market rent/purchase.

Furthermore, government could implement a livable minimum wage and have it keep pace with the cost of living. The same can be said for income support levels. These are just some concrete actions that could help make life more affordable for people. My colleagues and I are willing to sit down and discuss other solutions.

We look forward to the opportunity to discuss these matters further.

James Dinn, M.H.A.

District of St. John’s Centre

CORR 12092023 Dinn to Stoodley Rent Control
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