Average rent increases in city nearly 10 per cent in 2023: data

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Renters in Saint John paid an average 9.8 per cent more last year compared to the previous year, the city’s growth committee was told last week, with availability of rental units beginning to improve.

In a report to the committee, Andy Reid, the city’s housing manager, cited figures from the Canada Mortgage and Housing Corporation (CMHC) that show, as of October of last year, average rents in Saint John increased nearly 10 per cent to $1,027 per month. Reid noted the data compiled by CMHC focused only on privately owned buildings with at minimum a trio of rental units that have been on the market for at least three months.

“That’s a rate higher than the national average and it’s something that is remarkable, probably not unanticipated,” Reid said. The national average for rent increase was eight per cent for the same reporting time, he noted in his report. “In terms of the vacancy rate, the vacancy rate in the city in the primary rental is moving toward what’s considered a healthier rate of three per cent. Last year we were at 1.7 and it’s now moved to 2.4 per cent.”

Reid said affordability in the rental market does continue to be a challenge with action needed to address identified gaps in supportive housing, housing for the most vulnerable and affordable rental housing and ownership. To reach that healthier vacancy rate, he said, additional housing is needed in Saint John.

Last year, Reid told the committee, the city issued permits for 479 new units and this year, as of Feb. 26, the city has issued permits for 88 units.

“The committee will be familiar with some of the large initiatives being planned over the next three years including the Housing Accelerator Fund, the ongoing implementation of our Affordable Housing Action Plan. The bottom line is it will take time but we’re committing to a number of substantial initiatives to monitor, to continue to pull those municipal levers we have at our disposal,” Reid said noting those initiatives and the permit numbers show additional rental units are being built in the city.

In January the federal government announced the city is receiving $9.18 million from the Canada Mortgage and Housing Corporation’s Housing Accelerator fund aimed to reduce barriers to development. The city will be using the funds over the next three years on initiatives like grants and development incentives, zoning bylaw changes, creating a municipal housing entity and improving permitting processes.

Over the course of the three years, the City of Saint John is expected to see 1,124 housing starts, of which about 101 must be affordable, Reid said at the time. The 285 are “additional units created through this funding envelope.”

Coun. Brent Harris thanked Reid for the information but said he’s heard it will take 10 years to bring enough rental units on to the market to meet demands. Harris said the city will “never be able to produce the supply we need to keep up with demand.” Last summer, city staff informed council that Saint John will need to see the creation of 700 new housing units per year in order to meet its goals for population growth.

Harris asked Reid if city staff are considering any new tools to help the city better meet the needs for rental units and monitoring who owns rental units in the city, a key factor, he stated, in protecting the city and tenants from profiteering.

Reid said the housing system is rapidly changing and his presentation’s goal was to give the committee a snapshot of what is taking place in the city and when it comes to landlord and landlord relations the city is in constant communication with NB Housing, which is the government body that would deal with those issues.

Amy Poffenroth, the city’s commissioner of growth and community services, told the committee the city’s current focus is to “incentivize the increase supply of units and one of our initiatives under the housing action plan is to incentivize affordable housing” and the city is working the province and other groups to determine how to impact the affordability issue, which is not unique to Saint John.

Mayor Donna Reardon said she and other mayors recently met with provincial officials to discussing housing issues across New Brunswick. A variety of matters were discussed, she said, including protecting renters in the province.

“There’s a lot of protection out there, and has been for years, for homebuyers so we’re trying to get that shift, now, to renters, as well,” Reardon said.

– with files from Emma McPhee