Major landlords in Halifax, such as Killam Apartment REIT and CAPREIT, report rent hikes exceeding Nova Scotia’s two per cent cap, raising concerns and scrutiny
Despite Nova Scotia’s implementation of a two percent rent cap three years ago, rents in Halifax have been climbing at a rate unseen in decades. According to CBC News, an examination of public financial records from some of the city’s largest landlords provides insight into this trend.
Killam Apartment REIT (Killam) and Canadian Apartment Properties REIT (CAPREIT), prominent landlords in Halifax, have reported year-over-year average rent increases surpassing the cap. In September, Killam’s average rent for Halifax units was $1,324, a 4.3% increase from the previous year. CAPREIT reported an even steeper rise of eight percent.
Killam CEO Philip Fraser explained to CBC News that while lease renewals abide by the cap, average rent increases are influenced by new tenants paying market rates. Fraser noted that around 22% of Killam’s Halifax units experienced tenant turnover in 2022, prompting these market rate adjustments due to escalating expenses like oil and gas.
These companies are significant players in Halifax’s rental market. Killam, with 30% of its 19,000 units located in Halifax, is the municipality’s largest apartment owner. CAPREIT’s Halifax holdings represent over seven percent of its approximately 45,000 units across Canada.
The situation in Halifax reflects a broader trend of the financialization of housing in Canada, drawing scrutiny from housing advocates and academic researchers. They argue that treating housing as a financial commodity for profit contributes to rising rents. However, some rental companies dispute this claim.
CBC News’ extensive analysis involved interviewing industry workers, examining financial records, and monitoring earnings calls of these companies. During Killam’s August earnings call, chief financial officer Dale Noseworthy commented on an upcoming change allowing a five percent rent increase for lease renewals. She anticipated continued opportunities for rent growth on turnover apartment units.
The federal housing advocate, Marie‑Josée Houle, presented to a parliamentary committee in Ottawa, highlighting that large corporations and financial firms owning significant housing stocks in Canada raise rental prices to maximize profits, infringing on the right to adequate housing. Neil Lovitt, a vice-president at consultancy Turner Drake, noted that the housing shortage in Nova Scotia has increased real estate value, raising investor expectations for future returns.
Despite criticisms, Fraser from Killam rebuffed the notion that financialization and REITs exacerbate the housing crisis. He pointed out Killam’s collaborations with non-profits and its role in providing affordable housing. Over three-quarters of Killam’s units in Halifax rent for less than $1,500 a month. CAPREIT also emphasized its commitment to affordable housing, stating that over half of its units meet CMHC’s affordability criteria.
Despite owning a substantial share of Halifax’s rental units, REITs like Killam and CAPREIT represent a small overall footprint in the municipality. As of 2021, four REITs owned approximately 11.9% of all rental units in Halifax.
In addressing the housing crisis, both CEOs and advocates agree on the necessity of public housing. They view it as a crucial solution for those unable to afford market rent, underscoring the insufficiency of the private market alone in addressing the housing shortage.