Construction in Halifax not keeping pace with apartment rental demand – TheChronicleHerald.ca

Halifax residents hoping for relief from the citys tight rental market may have a long wait ahead of them.

Public records show that the pace at which the city issues new building permits for multi-unit dwellings may not be keeping pace with population levels.

The news comes in the wake of a Canada Mortgage and Housing Corp. report, released Wednesday, which found that rental vacancy rates have fallen to one per cent their lowest level on record, according to CMHC economist Kelvin Ndoro.

When we look at where the changes have been, affordability is an issue for people, says Ndoro. Vacancy rates dropped the most in more affordable areas outside mainland Halifax.

The CMHC data refers to vacancy rates in privately owned apartment buildings with three or more rental units.

Information obtained through Halifaxs Open Data website, separate from the CMHC report, shows that number of new residential units being approved by the city is still growing. Counting the three-unit and larger projects, 3,895 units were approved in 2019, compared to 2,836 the year before.

And the CMHC report says that there are more than 4,000 rental housing units currently under construction in the Halifax Regional Municipality, which is the highest level ever recorded. It also states, however, that nearly 1,000 fewer rental apartments were completed between June of 2018 and June of 2019 than were built during the previous year.

In terms of construction, we are on the right track, says Ndoro. It all depends on how much faster apartments are completed and rented out, in relation to how quickly demand increases.

But data from the Halifax Partnership economic development organization shows that the citys population has been growing at a rate of about 8,000 people annually in each of the last three years. The CMHC report found that these migration levels, both from within Canada and from abroad, is driving much of the decrease in vacancies.

According to Investment Property Owners Association of Nova Scotia executive director Kevin Russell, most rental housing projects take several years to complete. And as the units already under construction are finished, the most acute demand may start to abate, possibly causing new projects to be slower in coming.

Ndoro adds: There is supply in the pipeline. Its just that supply takes a little bit longer than demand. Its difficult to say how many apartments are needed But definitely, we need more additions in the market than were currently having right now.

In 2016, according to Russell, it often took landlords 30 to 45 days to fill a vacant unit, and sometimes as many as 45 to 60 days. Now, most units are filled within a day or two.

Whats happening is what the industry calls back-to-backs, so someone is moving out and someone is moving in right after, says Russell.

According to Halifax Mayor Mike Savage, the rental crunch is partly the result of the city failing to take action soon enough: As the city has grown over the last number of years, we havent kept pace as much as people think we have.

But he cautions that building more apartments is only one of several possible strategies to address the rental shortage.

Other options are to permit the creation of rental units in areas where they were previously not permitted and to penalize landlords who fail to include affordable housing in new buildingsa tactic that he says will be included in the forthcoming second part of Halifaxs Centre Plan.

If they dont do it in their buildings, working with organizations like Housing Nova Scotia, we will charge them and take the money, which weve already begun to do, and use it to work with partners, says Savage. It could be some kind of a housing NGO, an organization that provides shelter to women or people with disabilities, and we will partner directly with them.

Risa Roberts, the provincial NDP housing critic, called for rent control in Nova Scotia to "properly regulated short-term rentals." She also said the province should support the development of more non-profit, cooperative and public housing.

"Average rent was up almost four per cent from $1,066 to $1,113 in Halifax, and up 3.6 per cent across the province. Already, 19 per cent of households spend 50 per cent or more of their income on housing and utilities, as these costs continue to rise that number will get even bigger," she said in a news release.

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Construction in Halifax not keeping pace with apartment rental demand - TheChronicleHerald.ca