Non-profit housing organization asks province to bring it under property tax cap
Dartmouth Housing says paying a huge tax bill is cutting into the work it can do
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, said 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 per cent. 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.
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 said 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.
He said 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 said 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 said 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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