False housing data helped terminate N.B. rent cap

An apparent misreading of housing data led Service New Brunswick Minister Jill Green to mistakenly believe new apartment construction in New Brunswick had fallen dramatically in 2022, when in it fact had increased substantially.

The error played a central role in a decision to cancel rent cap protections for tenants for 2023, according to statements the minister has made over the last two weeks.  

One housing expert says misconstruing such fundamental information should trigger a re-evaluation of the policy decision to terminate the rent cap.

"I hope to see that they change it," said Julia Woodhall-Melnik, the director of the laboratory for housing and mental health at the University of New Brunswick's Saint John campus.

"It would be nice to go back and say, you know what, I've made errors.  I'm sorry, it was a mistake."

In the legislature Tuesday, Green repeated a claim she has been making since late November that the rent cap helped depress new housing developments in New Brunswick in 2022 and was being cancelled to encourage the construction of more rental units.

"We have had half the housing starts this year, when we had the rent caps, than we had last year," Green told Liberal MLA Benoît Bourque, who asked what evidence the government had to justify cancellation of the cap. 

Green told Bourque that after the introduction of the rent cap new housing starts of multi-unit properties, which include apartments, fell so steeply in New Brunswick it was enough to convince her the decline was related to the rent cap policy.

"Last year, there were 135 starts of residential properties of two units and above. That equalled 2,600 new units that were started last year," said Green in her response to Bourque.

"This year, there have only been 45 starts of properties of two units and above, which equates to only 1,000 new units. I do not know what evidence the opposition needs beyond that."

But according to the Canada Mortgage and Housing Corporation, most of Green's description of what happened in New Brunswick in 2022 is inaccurate, with housing starts up, not down significantly over 2021, including multi-unit housing starts.

In an interview, CMHC economist Kelvin Ndoro said there have been up and down individual months during the year, but overall housing starts in the province are running well ahead of 2021.

"When you look at the raw numbers, New Brunswick construction to date is higher, for sure," said Ndoro.

As of October, CMHC reported 3,892 housing units had begun construction in the province during 2022, a 30 per cent increase over same period in 2021. Of that number, the agency said 1,980 of the new housing starts were apartment units, a 61.8 per cent increase in that category over 2021.

Green was not made available for an interview Wednesday about where the data supporting her claim — that multi-unit housing starts fell in New Brunswick in 2022 — comes from, but it does not appear to be an isolated error.

Green made an identical claim on Nov. 29 during an interview on Information Morning Fredericton when pressed for evidence rent caps were harming development.

"We've seen significant decline this year," said Green, who quoted the same figures she used in the legislature this week.

"Less than half the units being built this year than last year is evidence."

Green's department won't acknowledge it misunderstood the housing starts data and instead suggested in an email the minister might have meant to talk about declines in multi-unit building permits in 2022 and misspoke.  

However, there are no major declines that match the numbers Green has been quoting in building permit data either.

That leaves the origin of the "decline" in housing starts quoted by the minister a mystery, despite the prominent role the error appeared to play in the decision made to cancel the rent cap.

Woodhall-Melnik said it is not too late for the province to revisit that if it discovers the data it used was misconstrued in a significant way. And she said broader consultation on housing issues would help produce a stronger foundation for policy changes.

"There's lots of housing experts in the province that all are keen and engaged in the housing debate," she said

"We could have helped interpret that [data] to make sure that there wasn't a mistake."