There have been several references that lease control should be instituted for properties worked after 1991.
Ontario premier has assured lease control, after gathering information that some Toronto landowners are lifting rents at twofold for tenants in their units. There are, up till now, no lease control rules for structures worked after 1991. A notable bank is resisting against the potential move.
“Economic theory is crystal clear on this issue: rent control is a bad idea. If rents are set at less than their average levels, both the quantity and quality of available rental units will drop. Under rent control, developers are less encouraged to build rental properties, a fact that aggravates any price crunch,” Benjamin Tal, CIBC chief economist, wrote in a recent research report.
“The turnover rate under rent control is lower as tenants stay in properties longer. Therefore, landlords would spend the bare minimum to maintain their units given that, in many cases, they do not need to attract other tenants.”
As far as it matters for her, Wynne isn’t buying the argument that lease control will depress the working of rentals.
“The reality is, there has not been any more rental built. There has not been rental buildings built in any comprehensive way,” she said last week, per the Canadian Press. “Therefore that argument does not actually hold water with me at this point.”
Tal gave a certifiable case where lease control has had a contrasting impact.
“New York City should be featured in any economic literature as an example of public policy that has achieved the near opposite of its goals. Roughly half of the apartments in the city are under rent control, the other half is continually undersupplied with a clear impact on prices,” he wrote. “Therefore, given that most housing programs tie government support to an apartment unit, the incentive to not move is enormous, further limiting supply. Additionally, the share of rent controlled units that are in poor maintenance, are almost four times higher than seen among uncontrolled units.”
With cases of 100% lease climbs in Canada’s most intense business sector surfacing, the legislature appears to be ready to make some move.
Would it be feasible for it to be an update to the present lease control rules?