Rent Control Cannot Force Rental Housing Providers to Stay in Business
DID YOU KNOW?
Governments can legislate limits on rent increases, but they cannot legislate rental housing providers into remaining in business.
For approximately two decades before Nova Scotia introduced its temporary rent cap in 2020, annual rent increases in Halifax’s purpose-built rental market averaged approximately 2.3%, according to CMHC historical data. Today, despite rent control, Nova Scotia renters face significantly higher asking rents, while rental housing providers face increasing property taxes, insurance, utilities, maintenance and financing costs.
Why?
Rent control does not eliminate the cost of providing rental housing. When operating expenses rise faster than permitted rent increases, rental housing providers must absorb the difference.
Eventually, some owners face difficult choices: defer improvements, reduce investment, sell their properties or leave the rental housing business entirely.
This is particularly concerning for smaller rental housing providers who own single-family homes, duplexes, townhouses and rental condominiums. When these properties are sold to owner-occupiers, they can disappear from the long-term rental market.
Older, smaller purpose-built rental buildings constructed during the 1960s, 1970s and 1980s face different pressures as they age and require increasingly costly repairs, upgrades and capital investment. These six-, eight- and twelve-unit properties may become financially unsustainable for smaller operators and be sold to larger rental housing providers for redevelopment, potentially displacing existing tenants and removing comparatively affordable rental homes during the redevelopment process.
These are not simply theoretical possibilities. They are real business decisions facing rental housing providers. Yet Nova Scotia does not systematically track how many smaller rental properties are being lost from the rental market.
Supporting Story
The Globe and Mail — Pundits Say B.C. Housing Policy Well Meant but Failing to Deliver (October 16, 2026) [Gift Link]
Experienced British Columbia housing planners warn that governments are placing too much faith in legislation to deliver housing while overlooking the financial realities that determine whether private owners build, maintain or continue operating rental properties.
THE BETTER DIRECTION FOR NOVA SCOTIA
Allow the temporary rent cap to expire as scheduled at the end of 2027 and replace it with a predictable rental housing policy that recognizes legitimate operating costs, encourages reinvestment and protects the existing rental housing supply.
Provide targeted, portable financial assistance to renters facing genuine affordability challenges rather than imposing broad restrictions that may encourage rental housing providers to leave the market.
Affordable rental housing cannot be protected by policies that make providing it financially unsustainable.