The Houston PCs would probably rather talk about taxes – Trudeau’s carbon tax and their own modest income tax cut – but when the Nova Scotia provincial election rolls around, they won’t be able to avoid defending their lacklustre record on health care and housing. 

The complaints about health care are well known – big spending increases combined with deteriorating services. Their housing record has received less attention. But it too is besmirched – by rents that have increased dramatically during their watch and a housing strategy that is clearly failing.

Rents took the spotlight in the mis-labelled “fall session” of the Nova Scotia legislature – a sitting that went by so fast it actually came to a close two days before the arrival of autumn. Besides its scandalously short duration the session was notable for exposing the Houston government’s seeming indifference to the struggles of Nova Scotians who rent their homes.

Despite increases averaging close to 25 percent in some categories between 2021 and 2023 the Conservatives brought in a bill allowing landlords to raise rents by up to five percent yearly on continuing tenancies, while preserving a loophole permitting unlimited increases on new tenancies. The legislation also makes it easier for landlords to evict tenants when they fall behind with the rent.

In response to criticism from the opposition and a cross-section of renters and their advocates, the government offered as a defence their five-year plan called “Our Homes, Action on Housing.” Unveiled last year, the plan includes a menu of affordability starters and a main course consisting of vastly increased housing supply that will supposedly lead to lower prices.

The affordability tidbits attracted most of the attention last week when the legislature’s Public Accounts committee questioned officials from Municipal Affairs and Housing. Some of the menu items look enticing – such as the Community Housing Acquisition Program that assists non-profits to preserve at-risk affordable units. But overall, the smorgasbord would add just hundreds of units to the province’s inventory of affordable housing when tens of thousands are needed.

Deputy Minister, Byron Rafuse, told the committee the government believes that the most effective way to increase affordability is to expand overall supply, a policy that was reiterated when simultaneously the Minister, John Lohr, released a statement praising “Our Homes, Action on Planning” as:

 “…the first plan of its kind that clearly sets out how we will work with partners to create the conditions for an additional 41,200 housing units over the next five years…We’ve already made significant progress, and because of our bold approach Nova Scotia is now a national leader when it comes to our growth rate of housing starts.”

Given that the plan is central to the Houston’s government’s approach to affordability and that it follows a heavy-handed seizure of planning authority from the Halifax Regional Municipality, the plan’s progress in creating 41,200 housing units demands scrutiny. 

Crunching the Numbers

To begin, it must be said that the trickle down approach is problematic, even if it does produce anywhere near the targeted number of units. Unless many of the new units are subsidized they will provide no relief to renters and those struggling to get into the housing market. It will take years for an increase in supply at market prices to have a beneficial effect on housing affordability.  And that’s if the hoped-for increase in supply even materializes, an outcome that, after year one of the plan, looks highly questionable.

The 41,200 number cited by John Lohr as the plan’s target is only part of what’s needed. According to the Provincial Housing Needs Assessment Report prepared several year ago by Turner Drake & Partners the 41,200 units represents the shortfall between the additional housing needed between 2022 and 2027 and what the market was expected to provide without policy change. Overall, Turner Drake estimated the need at 71,600 units. 

Of the 71,600 units required, 30,400 units – a yearly average of 6,080 – were expected to be built by the market under the status quo,  without government intervention. By intervening with its plan, the government claims it will add an additional 41,200 units – 26,000 of them by muscling in on HRM’s planning role and 15,200 through other measures, some of which were discussed at public accounts this past week. As noted, evidence presented by officials indicates those measures will add just hundreds, not thousands, of units in the near term.

The number to keep in mind is 71,600, which over five years means adding an average of 14,320 units per year. That’s more than three times the annual average of about  4,500 completions reported by Statistics Canada for the five years from 2018 to 2022. Going from an average of 4,500 a year to 14,320 a year is a major challenge – and Nova Scotia is off to a very slow start. 

StatsCan has yet to publish housing completion estimates for 2023 but in August the agency released sobering data on changes to housing stock. Housing stock takes into account completions minus the number of units lost by various means. Taking 2023 as the first year of the Houston government’s five-year plan we find that additions to housing stock fell well below the 14,320 annual average required to reach the target of 71,600 units by (the end) of 2027. Housing stock increased by only 4,529 in 2023, below even the status quo growth of 6,080 assumed in the Turner Drake report. In other words, year one of “Our Homes, Action on Planning” saw the province’s housing stock increase by some 1,550 units fewer than Turner Drake assumed would be added by doing nothing. 

Worse, in August, Statistics Canada reported that in the second quarter of this year, from April to the end of June, housing stock actually dropped by more than 300 units from the first quarter. The drop means that over the last two years, housing stock went from 480,643 to 489,645, an increase of 9,002, or 1.87 percent. Over that same period, population increased by  57,721, an increase of nearly six percent.

On a brighter note, John Lohr’s statement boasted that “Nova Scotia is now a national leader when it comes to our growth rate of housing starts.” That’s true for the most recent reporting period, but given the scope of the challenge – tripling the number of housing units per year starting in 2023 – it falls short of the mark. There were 7,159 housing starts in 2023. And for the first eight months of 2024, starts were up by John Lohr’s “nation-leading” 46.8 percent from the same period in 2023. 

If that rate of increase continues, housing starts in 2024 will top 10,500. Should that transpires – and don’t count on it – it would be a record number for any year since we started keeping track in 1955. Indeed, it would not only break the record, it would shatter the previous high for housing starts, 7,495 in 1977, according to Statistics Canada.

Even such an unprecedented increase in housing starts would be a year late and several thousand units short. Eleven thousand starts would be double the the number of starts recorded in 2022, but remember that based on the housing needs assessment, the number of units has to increase three-fold from 2022 – and the increase should have started last year, in 2023. 

Back to the Future

Much of the housing debate has been around whether the PC government’s focus on supply will ease the affordability crisis. The record so far indicates that with just over three years to go, they are far from meeting the supply targets, making even more remote the prospect the plan will make housing more affordable. And that, in turn, dictates that affordable housing needs will only be met by significantly ramping up the creation of non-market housing. 

It is noteworthy that the record for housing starts was set in the 1970s when all levels of government were active in the delivery of housing for families and seniors. The activity led over time to well-planned, affordable developments like Forest Hills, Millwood and Lancaster Ridge. In a recent letter to the editor in the Globe and Mail the former chief architect of the Nova Scotia Housing Commission, Don Williams, explained the origin of such developments.

“This happened through federal, provincial  and municipal co-operation in land banking and planning, the design and installation of streets and services and providing building sites at cost to independent builders. This all stopped abruptly in the early 1980s, only to leave the provision of housing sites to an uncoordinated private sector which has to a large extent evolved into ‘housing as an investment.’ ”

Although the Nova Scotia government has introduced a few worthwhile non-market initiatives, they have been much too small in scale. As for inter-governmental co-operation, the Houston government’s approach has often veered into confrontation – and it has shown no willingness to seriously challenge the destructive notion of housing as an investment. Small wonder their policy is failing.

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