What It Means for Nova Scotia's Housing Market

Husband and wife talking over coffee

Beginning September 30, 2024, Nova Scotia will implement significant new regulations for short-term rentals, including platforms like Airbnb, as part of an effort to address the province's growing housing crisis. These regulations are designed to increase the availability of long-term housing by reining in the number of properties being used as short-term rentals. But what could this mean for the broader housing market in Nova Scotia?

The Purpose Behind the Changes

John Lohr, Minister of Municipal Affairs and Housing, emphasized the critical need for these regulations: “Nova Scotians need housing. We know many houses and apartments that could potentially be long-term homes are being rented short term. We’re working to get more homes built. In the meantime, these changes will help address the urgent need for housing now.”

By placing stricter controls on short-term rentals, the government aims to ensure that more properties are available for Nova Scotians who need permanent homes.

How Could This Impact the Housing Market?

1. Increased Supply of Long-Term Rentals:

  • One of the most immediate effects could be an increase in the availability of long-term rental properties. Property owners who previously used their homes for short-term rentals may choose to switch to long-term leasing, especially in high-demand areas where short-term rentals will face higher registration fees.

2. Potential Cooling of Property Prices:

  • With fewer properties being kept off the market for short-term rentals, there may be a slight cooling effect on property prices. In areas where short-term rentals were driving up property values, a shift towards long-term rentals could help stabilize or even reduce prices, making it more feasible for first-time buyers to enter the market.

3. Possible Increase in Property Sales:

  • Some property owners, facing new registration fees and potential fines for non-compliance, might choose to sell their properties instead of continuing to operate them as short-term rentals. This could lead to an increase in housing inventory, offering more options for buyers and possibly easing the current housing shortage.

4. Impact on the Tourism Sector:

  • While the regulations are designed to address housing needs, they could also impact the availability of short-term rentals for tourists. This might lead to higher prices for remaining short-term accommodations or push some travelers to consider traditional hotels and inns, which are not subject to the new regulations.

The New Regulations in Detail

Under the new regulations, all tourist accommodations and short-term rentals will need to provide comprehensive documentation, including:

  • Proof of compliance with municipal bylaws.
  • Written consent from property owners or condo boards where applicable.
  • Proof of primary residence for certain categories of rentals.

Annual registration fees will range from $50 to $2,000 per unit, depending on the accommodation type and location, with higher rates in areas where long-term housing is most needed. Unregistered or non-compliant operators could face fines of up to $100,000. Traditional tourist accommodations like hotels and motels will not see changes in their registration rates.

Compliance and Monitoring

To ensure these regulations are followed, the Province will enlist external support for compliance monitoring. This demonstrates the government's commitment to enforcing these rules and ensuring they have the intended effect on the housing market.

What You Should Do Next

  • Register Your Rental: Registration for the 2024-25 season opens in mid-August. Ensure your application is submitted by September 16 to allow time for processing.
  • Check Compliance: Existing registration numbers will not be valid after September 30, so make sure your property complies with the new regulations.
  • Evaluate Your Options: Property owners should consider whether to continue operating as a short-term rental under the new rules, switch to a long-term rental, or even sell.

 

Final Thoughts

These changes represent a significant shift in Nova Scotia’s approach to managing short-term rentals, reflecting the urgent need to address the housing shortage. While the regulations are expected to make more homes available for long-term residents, they could also lead to a cooling of property prices and potentially more homes being put up for sale.

If you’re a property owner considering selling or a renter looking to buy, now is the time to act! Contact us today for personalized advice and take advantage of these changes in the housing market.

For more detailed information and updates, visit the following resources: