Nova Scotia announces $8M loan program to encourage secondary suites

Nova Scotia is partnering with homeowners to combat the ongoing housing crisis in the province with a newly announced incentive program.

On Thursday, officials announced a secondary and backyard suite program that will provide up to $25,000 in forgivable loans to homeowners who build affordable secondary or backyard suites in their home or on their property. The pilot program is part of $8 million in funding over three years and is expected to add up to 300 additional units in that time.

Officials say for homeowners to qualify, they must provide housing for a maximum rental rate that is 80 per cent of the average rental rate for the area for a minimum of five years. They are also barred from making the new suites available for short-term rentals when their loan is active under the program.

Meanwhile, tenants must be at least one of the following:

• Below the household income limit for the area. 
• A parent, 65-years of age or older, of the homeowners.
• An adult child of a senior homeowner.

In order for homeowners to receive the loan, tenants must have incomes below a certain level.

In Halifax, the household income limit is $47,000 for a one-bedroom suite, according to Department of Municipal Affairs and Housing. That rises to $57,500 for other parts of the province.

Coun. Shawn Cleary, who represents Halifax West Armdale, said that back in 2020, the Halifax regional council approved changes to planning rules across the municipality to allow basement apartments and backyard suites for single-family homes, townhouses and duplexes.

However, uptake following the changes hasn’t been high.

Now, with this incentive, Cleary said he thinks that might change.

“I think it could be quite useful for people and I hope people take it up because we obviously, desperately, need the housing,” said Cleary. He added, however, that 300 homes would not be enough.

“We need, according to the housing data that we’ve seen, about 7,500 new units a year for the next five years just to bring our vacancy rate from one to two per cent,” he said.

Still, he said a larger issue affecting housing across the Halifax Regional Municipality and the province is finding skilled tradespeople to build it.

“Housing is really being priced out even for middle income folks now, but we just can’t get enough of it,” he said. “We’ve got more people moving in, but we just don’t have the capacity to build more.”

Earlier this year, data from Statistics Canada revealed rent in Nova Scotia rose by an average of 7.5 per cent in July compared to the year before, making it one of the highest rate increases in the country. And data from Rentals.ca says that this month, the average rent for a one-bedroom unit in Halifax is nearly $1,900, which is up more than 27 per cent, year-over-year.

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