The Wynne government has decided to extend rent control to buildings built after 1991. What a horrible decision. They did so to appease their voting base because an election year is coming. They did this under the guise of helping renters. However, nothing could be further from the truth. The extension of rent control will only hurt the renters it was put in place to protect. When you make it harder for landlords to make money and recoup their investment of buying and building the property, they will simply turn around and sell the property so it’s no longer available for rent.
Why did the government do this? They heard a few one-off stories of landlords doubling the rent on tenants. So they decided that they would punish everyone because for this. I wish they had done a little more research into some of these cases as they would find that the tenants were misbehaving, so the landlord felt they had no choice but to drastically increase the rent to get rid of them. The rules of the Landlord & Tenant Act are so restrictive that it doesn’t give landlords any leeway and so they have to go to extremes to get rid of sub-par tenants.
The government also created a new rebate on the development charges that developers must pay to build a rental building in the hopes that it will inspire some developers to build more rental buildings. This simply will not happen. It’s just not enough of an incentive. Also, with increased rent control, the business case for the purpose-built rental buildings will fail. I would imagine that some of the current applications for purpose-built rentals will suddenly change and become condo buildings. This will, of course, help the condo supply but it will hurt renters.
It will only hurt renters.
The Wynne government’s rent control changes will simply hurt renters and result in fewer rentals available. This means that when those rentals come up for renewal, there will be more bidding wars for them. therefore drive the rental price up even further. Way to go Kathleen Wynne! Your government has clearly not thought this through.
I was recently at the Urban Land Symposium. Every urban planner, developer, and analyst in the room agreed that rent control will only hurt the very people it was proposed to protect. A few years ago, I met someone from Vancouver who said that him and his wife had to beat out 30 other couples for the chance to rent a house for $3,000/mo. Unfortunately, that is a sign of things to come to Toronto as a direct result of the extension of rent control. Way to go Wynne!