Ottawa Citizen


- — Tyler Dawson, for the Citizen editorial board

The rent, a New York gubernator­ial candidate once declared, is too damn high.

Queen’s Park apparently thinks that’s also true in Ontario. As part of 16 sweeping measures meant to address home prices, the Liberal government is institutin­g price controls on all rentals, even those built after 1991, ending a policy once meant to get developers to build more rental housing.

But who would want to build new properties, only to have rents — and therefore revenues — capped? That’s why, until now, newer buildings were exempt from rent controls.

The proposal to end that, announced Thursday by Premier Kathleen Wynne, would likely cap rent increases at roughly the rate of inflation. Mayor Jim Watson says that makes sense, even though he hasn’t heard of wild spikes in rents in Ottawa. But “rent control helps to level the playing field,” he told the Citizen.

Except that it doesn’t work like that. Rent control, says a report earlier this month from CIBC focused on the GTA, “will mostly hurt the people it’s trying to protect.” There’s a historical record to support this view. Ontario has had rent control since 1975. In 1988, a University of Toronto study said its effects were “to reduce new constructi­on, to accelerate deteriorat­ion and conversion of the existing rental stock, to generate a severe rental housing shortage,” among other impacts. The controls were thus eased for newly built units in 1992.

Watson says the rental constructi­on that 1991 loophole was supposed to bring never happened. Yet in 2015, 46 per cent of new apartment starts were for rental-specific properties in Ottawa, according to the Canada Mortgage Housing Corporatio­n, levels unmatched since 2002. That doesn’t mean perfect equilibriu­m: In Ottawa, 439 new rental units came available between October 2015 and 2016, but demand rose by 669 units, says CMHC. Which is to say, anything that’s going to discourage supply — like rent control! — should be avoided.

The average one-bedroom apartment in Ottawa, according to the most recent CMHC data, rents for $982. Two years previous, it rented for $936. Overall, apartment rents increased by 4.8 per cent between October 2014 and October 2016. Compare that to Toronto, where the average was $1,132 in October 2016. Overall rents have gone up 5.7 per cent there.

If rental prices are a problem, they’re best categorize­d as a problem in Toronto, not Ottawa. It may be that, for some, the rent is too damn high.

The trouble is the government, hoping to help, may do even more damage in the long run.

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