We Say No! to Rent Control

As expected, the NDP have proposed rent control as part of their "Housing Platform" which they released today. While I haven't had a chance to review the platform in detail there appear to be some reasonable ideas in the platform such as a grant for first time buyers and incentives for development of rental units. However, rent control is a non-starter which can actually end up hurting those it is intended to help. There are numerous studies available which show that rent controls deter development of new units and can lead to reduced maintenance of existing units. The Frontier Center for Public Policy recently released this report: Rent Control and its Applicability to Saskatchewan and the Saskatchewan Chamber of Commerce released this report earlier this Summer: Rent Control No Solution to Housing Crisis. This is just two of a host of studies out there but they are the most relevant as they deal directly with Saskatchewan.

To quote from the Frontier Centre study: "From analyses in all financial, theoretic,
and empirical approaches, one can conclude that rent control is not a good idea and government cannot  manage housing better than the private sector." and "..OECD data demonstrate that the European countries with the highest numbers of price-rent ratios are those with rent control. Rents in Canadian cities where they were controlled can even be much higher than those in cities without rent control, proving the point that “rent control does not do what most people think it does.”
The notion of exempting certain new construction for a period of time does not address the issue of discouraging investment or of deterioration of existing units. Saskatchewan  REALTORS® position on this is very clear - when demand is the problem, supply is the answer. This article outlining our position recenty appeared in the Regina Leader Post and the Saskatoon Star-Phoenix : Rent Control Op-Ed. And here is a recap of an interview I did recently on this topic on the Richard Brown show: Richard Brown Show interview. Here is our position paper which stresses the importance of increasing supply: More Houses at Reasonable Prices.

We encourage our next government to encourage the construction of new rental units by offering incentives not by controlling their rents: Media Release - Oct 12, 2011.