Rent Control is the Opposite of What the GTA Market Needs
“The reality is that you cannot tax your way to real and sustainable change.”
The current state of affairs:
- We are in the process of a historical transition to a more rental-oriented real estate market
- 28,000 new-build rental units were proposed as of the 4th quarter of 2016
- More talk of rent control is having “chilling effects” on developers and impacting their decision to build rental units
Rent control hurts those it aims to protect:
- Discourages developers from building rental units in a market where most people can no longer afford to own a home
- For the projects that will get developed, quality of the product will be affected
- Tenants will stay longer in units; hence, landlords have no incentive to maintain the units (no need to attract other tenants)
- Tenants will “turn against tenants” as they compete over dwindling housing supply resulting in a rental black market
What is needed instead from the government?
- Faster land development approval process
- Reassessing current intensification limits
- Providing developers with the right incentives to build rentals
- Increased investment in affordable housing
“In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing” – Swedish economist Assar Lindbeck
“The introduction of rent control is politically feasible only in areas with no recent experience—because only an electorate uninformed of its consequences will support it” – Milton Friedman, the ultimate free market economist.
New Panel on Rent Control:
Rent Controls & Other Legislative Dilemmas
June 6th, 12 PM
At this session, we will be launching the Canadian Rental Housing Supply Alliance – an association of Canada’s premier apartment developers (present & future) and major Canadian lending institutions. Our goal will be to represent the interests of developers – federally, provincially and municipally.
Canadian Rental Housing is at a strategic turning point – Governments need to help, not hinder, apartment development.