Nova Scotia’s Provincial Housing Needs Assessment Report:

Following the May 2021 release of the Nova Scotia Affordable Housing Commission’s Charting a New Course for Affordable Housing in Nova Scotia, the provincial the government sought to develop a long-term housing strategy. Through its quantitative and qualitative findings, this housing needs assessment lays the groundwork for the provincial government’s long-term housing strategy in addressing the ongoing affordability crisis in Nova Scotia housing. Through the collection and collation of data for the entirety of the province and its 49 census municipalities, this report’s purpose is to disseminate high-quality, high-level information to the province and its municipalities.

This report takes three primary approaches in the collection of data and communication of findings:
• Resident and Stakeholder engagement;
• Simple and complex descriptive data analysis, and;
• Econometric and demographic housing demand modeling.

Resident and stakeholder engagement occurred between June 2022 and January 2023, with 99 engagement sessions held with stakeholders and organizations, including government, non-profit organizations, private sector stakeholders, and public institutions. The sessions included focus groups and workshops where qualitative information was collected.

Further, a public survey was open to all residents of Nova Scotia from October to December 2022, with a total of 20,173 respondents, 12,906 of which were fully completed. Since the survey was open to all residents comfortable sharing their housing experiences, it is essential to note that it represents a non-probability sample.

Throughout the report, the input from participants in the engagement sessions and the surveys are reflected. While several themes were present in the engagement, there were four that were most prevalent:
1) Availability and affordability;
2) Social and economic impacts;
3) Appropriate supply; and
4) Transportation

These themes focus on housing insecurities faced in both rural and urban settings by those in marginalized groups and those requiring complex accessibility needs.

The quantitative data collected and collated relate to the various demographic and economic factors that are affected by the housing market. The economic factors are divided into factors of demand – which have significant crossover with the demographic factors – and factors of supply which are inflation, interest rates, the cost of, the pace of, and investment in construction, as well as the labor force capacity.

The relationship between inflation and interest rates is explored thoroughly. During the height of the COVID-19 pandemic, to stimulate the economy, the Bank of Canada lowered interest rates to a historical low of 0.25%. This increased the attractiveness of borrowing funds, thus increasing the total supply of money within the market.

Increasing the supply of money available to consumers increases demand and thus drives inflation, expressed here as the consumer price index (CPI) – i.e., the relative cost of goods. Between December 2021 and December 2022, the CPI increased 7.6% in Nova Scotia, about three times the average annual inflation from 2002-2020. To stem an inflation crisis, interest rates have risen steadily and, as of January 2023, sit at 4.5%, translating to a prime lending rate of 6.49%.

With the compounded increase in the cost of goods and interest rates, the attractiveness of significantly sized loans for large development projects has decreased. Regarding cost, between Q3 of 2021 and Q3 of 2022, the cost of overall residential construction increased by 15.3%. Fortunately, neither the pace nor investment in construction seems to be slowing down. Since 2019, permits per year across Nova Scotia increased by 82%, and a 22% increase in completions per year. Both new constructions and renovations have also steadily increased since 2020.

The demographic factors in this report are historical and anticipated populations and the various aspects of household formation. From 2016-2021, Nova Scotia experienced a population increase of 5%, with a large increase in the age cohorts of 25-44, 65-84, and 85+. Mid-level projections anticipate a population increase of 14% from 2022 to 2032 and 3% from 2021-2022. This translates to approximately 169,870 new residents over the next decade (2021 to 2032).