Non-profit housing organization asks province to bring it under property tax cap

Nick Russell is the executive director of Dartmouth Housing, a non-profit housing provider that has been operating since the 1980s.  (Shaina Luck/CBC - image credit)
Nick Russell is the executive director of Dartmouth Housing, a non-profit housing provider that has been operating since the 1980s. (Shaina Luck/CBC - image credit)

As property values in Nova Scotia increase, a non-profit housing provider in Dartmouth says it's seeing the amount of property tax it pays on its buildings go up by tens of thousands of dollars.

In the midst of a housing crisis, it's challenging Dartmouth Housing's ability to offer more low-cost rentals, says Nick Russell, the organization's executive director. He believes a change to provincial tax law could solve the problem.

"They're saying that our portfolio is worth seven million dollars more than it was two years ago," Russell said in a recent interview about this year's tax assessment.

Russell said even after qualifying for municipal tax relief programs, the organization is expecting its tax bill to go from $89,940 in 2021-22 to an estimated $121,936 for the 2023-24 year.

"The cold, hard truth is it comes from reserves that we have set aside to [add] new units in our portfolio," he said.

"We only have so much squirreled away for growth. That's not an endless pot," he added.

Dartmouth Housing runs 109 units in more than 90 buildings, offering units that start as low as $450 and matched to the tenant's income.

The buildings are mostly three and four bedroom duplexes, a few small apartment buildings, and some single-family homes.

The organization focuses on single-parent households and low-income working families.

It wants to increase the number of low-cost units it offers, which the province has acknowledged is needed.

A proposal to change tax law

Russell is urging the provincial government to bring non-profit housing providers under the provincial capped assessment program for property taxes.

Nova Scotia currently limits or "caps" property tax increases by a rate set by the Nova Scotia Consumer Price Index (CPI). For 2023 the rate is 7.7%.  The cap applies to homeowners who have been in their homes for more than a year, condos, mobile homes, and co-op housing.

It doesn't include rental apartments with either for-profit or non-profit owners such as Dartmouth Housing.

Sault Ste. Marie developer Sam Biasucci is happy to see the federal government offer to drop sales tax from new apartment building construction, but wants to see that extended to single family homes as well.
Sault Ste. Marie developer Sam Biasucci is happy to see the federal government offer to drop sales tax from new apartment building construction, but wants to see that extended to single family homes as well.

Dartmouth Housing would like to add to the number of low-cost units it offers, which Nova Scotia has acknowledged is needed. (Erik White/CBC)

The cap was brought in to protect homeowners from sudden property spikes. It has a contentious history, with some organizations like the Nova Scotia Federation of Municipalities arguing it should be scrapped.

"We don't necessarily have a position on whether the program should or shouldn't exist," Russell said. "All we're saying is that as long the program does exist, the non-profit housing sector needs to be included in it." He pointed out that co-op housing organizations which serve similar social goals are included.

Russell argues there are few non-profit housing providers in the province and giving them a tax break would make a "marginal" difference to the amount collected.

But he says it would make a big difference to the organizations and the people they serve, because if reserves are exhausted they'll have to sacrifice properties or raise rents.

"That's the absolute last thing we want to do," he said. "It would only be prudent for us to do it if it meant keeping the boat afloat."

Commercial landlords don't like the cap either. The Investment Property Owners Association of Nova Scotia (IPOANS) has advocated against it for years.

Kevin Russell (no relation to Nick Russell) is the executive director of IPOANS.

Kevin Russell is the executive director of the Investment Property Owners Association of Nova Scotia (IPOANS).
Kevin Russell is the executive director of the Investment Property Owners Association of Nova Scotia (IPOANS).

Kevin Russell is the executive director of the Investment Property Owners Association of Nova Scotia (IPOANS). (Shaina Luck/CBC)

He says renters who live in regular rental apartment buildings are affected by roughly $10 to $20 a month on their rent, as landlords pass along the cost of the taxes.

"If you're not going to phase it out, put our industry, the apartment rental industry and those buildings with five units or more under the cap," he said. "So far we've been met with silence."

Kevin Russell says some IPOANS members are reporting "double digit increases" in their property taxes from last year to this year, which is "really impacting their operations."

He says IPOANS has no objection to bringing non-profit organizations under the cap, but argues if non-profits are brought under the cap then for-profit rental providers should have the same treatment.

Housing and Municipal Affairs Minister John Lohr said he's aware of the request from Dartmouth Housing but he has no intention of changing the rent cap.

"Obviously taxes going up are part of the fact that properties are becoming more valuable," said Lohr. "I realize that doesn't help them at all, we realize it's a concern for them."

However Lohr said he's heard from "many voices saying many things" on the cap, including lobbying from municipalities to remove the cap altogether.

"The reality is that at this time there's really no appetite from our government to make any changes to the cap," he said. "That could change in the future, but that's where we're at right now."

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