Thoughts on Rent Control?

Author
Weiting Bollu
| Published at
December 2, 2024
| Updated on
December 2, 2024
Author
Weiting Bollu
Published at
December 2, 2024
Updated on
December 2, 2024
Openroom community members weigh in on rent control.

KEY TAKEAWAYS

Every other Sunday, Openroom subscribers receive a newsletter straight from me, packed with the latest rental market news, insider tips, and updates on what’s happening at Openroom! Join Openroom’s newsletter. 

At the end of every newsletter, I ask readers to share their opinions and experiences on issues that impact small landlords across the country. 

Openroom Community member, Sohail, messaged me after the last newsletter saying: 

"You should do an article on rent controls...On top of the delays at the LTB…rent controls also limit the supply of rent properties and discourage investment in rental properties."

What is rent control?

"Any apartment, house, condo, basement or mobile home that someone has lived in since before Nov. 15, 2018 [in Ontario] is covered by rent control. That doesn't mean rent can't go up. It means that rent can be increased once a year and the provincial government decides by how much." -- Reporter Lane Harrison, CBC

What is vacancy control?

"Vacancy control is the name given to preventing rent rates from being increased when a rental unit is vacant." -- Chris Seepe, Owner and Operator of 70+ units, former President of the Landlords Association of Durham

Some thoughts?

I called my mentor, Chris Seepe, on this topic. Chris and I had discussions about this exact topic multiple times in the past. He's taught me so much over the last year about looking into the root causes of rental housing affordability crisis. 

I invited him to write an opinion piece for us. He sent me two.

What are your thoughts on rent control?

I also reached out to our Openroom community to understand their perspectives on rent control. I asked readers “What are your thoughts on rent control?”

Here is what the community shared with me. 

Many left comments as well! Here they are, verbatim. 

It’s necessary 

Rent Control in Canada - opinions from landlords

I have no issues with the principles of rent control. It's the LTB bureaucratic nightmare and delays for landlords that make rent control less palatable.

A balanced society still needs to protect the vulnerable.

Stop pretending you are pro renters. At each of your newsletters, you provide points against renters. Rent control DOES work. But when Doug Ford ripped it off partially, it created a big imbalance between rent-controlled units and open market ones. This led to landlords feeling “entitled” to market rent, and led to renovictions and bad faith evictions. Ask renters. They all have the same evictions experience despite being good paying respectful tenants.

Rent control is necessary, but it only works if the government subsidizes housing starts.

Some landlords have doubled their rents, thus making them unaffordable.

Seeing the stories of bad landlords jacking prices up by 200% or more makes the good landlords look worse and fosters an adversarial relationship.

Stops landlords from coughing tenants.

It reduces the possibility of tenants being taken advantage of by their landlords.

I guess I don’t trust the market factors fully. Marginalized people are most vulnerable. That said, 2.5 percent is not realistic when taxes in some areas are increasing much higher.

What the f*** is wrong with you.

I think rent control is the fairest way to guarantee what both a Landlord and Tenant can expect from a rental agreement. If a tenant was a homeowner instead of a renter, their mortgage could go up—yes—but by an amount based on factors that can be planned for and understood. Giving a Landlord the ability to arbitrarily raise rent makes housing unstable and makes a lease agreement not a valid contract.

Hate it

Rent Control in Canada - opinions from landlords

No rent control in Edmonton and rents are competitive and the economy is the control not the government. It works very well in Edmonton for the investor and for the renter.

Open market. Last thing government should interfere. Investors money and investors property. They should decide how much they charge, and it will be controlled by the market and inventory.

It doesn’t make any sense. No (food) price control when everything went up 30-50% in last few years?

My costs have increased more than the allowable increase imposed by the government. I have no chance of doing upgrades and maintenance is not covered. This will lead to slumlord situations which in turn will take units off the market.

Am about to dispose of my properties and move my investments to Alberta.

Every control is an obstacle of the main principles of free market and competition.

My property, my rules. That’s how it should be. If people don’t like it they can move on. I should be able to increase my rent to whatever I want it to be.

It’s unreasonable to the investor.

My expenses are rising more quickly than my rents.

It’s unnecessary and stifles the rental market. No one will be left in the landlord business if rent control & vacancy control are implemented. The province can barely run the LTB let alone enforcing programs like rent/vacancy control.

Rent controls don't work over a long term. Especially when increases are below the inflation mark. Back in the 80s in New York, it was more profitable to burn down a building and collect the insurance than what it was to rent the building to tenants. I witnessed in one European country a landlord with a high-rise building where he lost money every year. He offered to give the building to a charitable organization for free, and they refused it. Needless to say, most buildings were neglected, and there were even cases where old buildings would collapse because maintenance was never done on them, and they were neglected. Even our government doesn't want to get into the rental game because it's a losing proposition. From maintenance issues to creating slum areas where crime is rampant.

Market value, when COVID happened tenants asked for a rent decrease in many cases and threatened landlords. Rent should be market value, also rent should be in a contract, must renew leases not month to month. In a month-to-month case, landlords should have the ability to not renew a lease by giving 60 days same as if a tenant wants to leave. Let's look at other products and services; prices go up more than a yearly government-set rate. Why is it the government puts in rules of pricing? If this is the case, everything should be capped, food, gas, utilities, cost of products, and costs across all boards. Rent control decreases landlords entering the market and does not allow landlords to increase when costs increase.

The impossibility of matching (at least) yearly increases in all property costs to increases in rent. We are now far below breaking even, much less trying to maintain the property as we did in the past. Can't sell with tenants. May have to just dump it after 18 years.

Fully agree with Chris’ work. The city really should reconsider its position on rent control, etc.

A landlord should be able to set the price of rent based on what it costs them to acquire and maintain the property. A store owner would not be expected to absorb the increased costs of inflation or an increase in supplier costs for their customers to indefinitely pay a constant price. Rent control, vacancy control, vacancy taxes, and similar policies penalize landlords for owning property and providing homes for renters. That is unjust.

Here is a proposal. Have the government allow rent increases to match inflation and they subsidize the difference to anyone whose rent is in excess of 35% of their income.

Rent controls create an artificial economy. Governments know that. Legislators know that. Tenants know that. Here’s why: Many times inflation and the cost of operating the property, excluding repairs and maintenance, will far exceed the legislated rent increase amount. This leads to a declining scale of potential profit for investors and their operating budgets...

The building belongs to the landlord, he should do what he wants. No one should control his investment but him. If you don't like him, don't rent from him.

Markets will only stabilize if you don't mess with it. As usual, government intervention with the public appearance of being helpful simply messes with supply and demand and creates more problems than it solves.

The cost of utilities and insurance has gone up way more than the average rent increase per unit. We need increases of over 10% to cover these costs for a few years, not 2.5%. That’s a slap in our faces.

It stops me from updating/upgrading rental units as I can’t recover the expenses of the upgrades. Plus costs to just maintain are going up more than the guidelines are.

No need for rent control. It’s been proven that it doesn’t work. Plus, why should government control your investment and then tell you what you can and can’t do? I call that communism.

If rental is a business, then how come the government controls how much to increase rent? Is there any other business that government controls the pricing? How come the government is not able to control gas or grocery pricing? Is it because those are run by big corporations and the government has an excuse of free market pricing? Then how come there is not free market pricing on rentals?

Makes being a landlord untenable.

This and the government policies don’t encourage landlords and investors and encourage criminal tenants.

Just like all other businesses have the right to regulate their prices based upon market conditions, the property owners should also be given their right to regulate rents according to market conditions once the old contract is over. Also, there should be no month-to-month after the end of the contract. You should have to negotiate and sign up for a new contract. Providing rental units is a business.

Not fair to investors.

It sounds good in theory, but in real practice, it causes more problems like supply issues, renovations, and hurts tenants in the end. Need to keep the market a free market.

Doesn't work. So many studies out there prove that it has significant adverse externalities on the housing market.

Long-term tenants have rent so low, they cannot afford to move, even when it would benefit their lives. It has stopped me from building a new rental property, even though I have a perfect location.

Inflation: 2.5% rent is not justified. Increases to LL's to keep a property functioning are so much more.

It's not necessary. The free market should decide what the rent should be!

It doesn't work. The oldest rent control laws in North America are in New York and the Bay Area in California. Those are also the two cities with the highest rents. This is not a coincidence.

Politicians think only about the next election and, at the end of the day, rent controls are popular. There are way more tenants than landlords. Do you think any politician cares about what happens to the rental market 10, or 20 years down the road?

Let the markets dictate the rents.

Restricts property owner’s ability to cover operating costs. As inflation increases operational costs, rent must be adjusted, either at the time of vacancy or annually to the tenant.

It distorts the free market. (Although having some subsidized housing is essential.)

Rent control basically just covers increased costs, i.e., utilities, taxes, insurance. There is no profit from the government annual increases. The only way to increase profits is by tenant turnover.

I feel that by controlling the amount a landlord is able to increase the rent forces a lot of small landlords to sell off their rental units as they can no longer cover their bills. As landlords, we are not a social system that should support someone’s living. I also feel that rental pricing will only go as high as the market can afford...

Rent control is not an effective and fair tool to encourage a fair rental market, for both renters and landlords.

Other

Rent Control in Canada - opinions from landlords

Giving incentives to build rental housing will result in rent control due to competition and then tenants can even choose the property that offers the best services of cleanliness and good maintenance.

I believe that the government needs to differentiate between 1-3 doors as small and 4 and up units. There is no common sense between a detached unit or condos etc there is a difference of upkeep etc. People need to be held accountable for their homes for dignity and respect. The government continuously promotes a victim mentality along with unaccountable behaviours of tenants with no remuneration.

It is necessary, but the percentage that you can increase each year has to be higher, closer to the cost of living. And COVID should not have been an excuse for a year of zero increase.

As someone who just recently finished being a landlord, I found rent control to be way too restrictive. While my maintenance fees went up five or six percent a year, I could only raise the rent by the province's one or two percent rate each year. However, I have found such insane rental increases at some properties lately, that I feel some kind of control needs to be in place.

There should be a limited type of rent control, or perhaps rent increase guidelines such as a maximum rent increase above the inflation rate of 5%, or inflation times 2 to protect landlords against excessive inflation or other costs, and also tenants against excessive increases. It should apply equally for all rentals even new ones. I believe that all sides of the rental market should be treated fairly, good tenants need to be protected same as good landlords. Rent discounts should also be allowed such as smoke-free discounts, pet-free discounts, or paid-on-time discounts, and it would be totally up to the landlord's personal discretion whether the tenant obeyed the discount rules. Or landlords should have the right to evict immediately any tenant that may be causing damage to the unit. Landlord-friendly jurisdictions like Alberta have fairer rents and the least housing shortage crisis.

It makes sense only if the rent increase properly reflects inflation and various operating costs and taxes. For the last 50 years, that has not happened. Abolish it.

Have Your Say

We invite readers to share their own opinions and join the conversation. If you'd like to contribute, feel free to email us at hello@openroom.ca or follow us on our social media channels to stay engaged. Your voice matters in shaping the ongoing dialogue about landlord and tenant rights.

Disclaimer:
This article reflects the personal opinions of the public and does not necessarily represent the views of Openroom or any organizations mentioned. All comments included in this post are anonymized and fully sourced from the general public. Each individual expresses their own perspective on the complex issues surrounding landlord and tenant rights. We provide a platform for editorial opinions to highlight the feelings and concerns of the broader community. Our goal is to foster open discussion and report on real issues. We encourage readers to consider multiple viewpoints and seek further information on this topic.

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Weiting Bollu
Mom, Rental Housing Provider, Rental Housing Advocate, Educator, and Openroom Co-Founder & CEO

About the Author

Weiting's entrepreneurial journey began with a costly lesson in rental property management, where she experienced losses exceeding $35,000 due to non-paying tenants. Determined to prevent others from facing similar challenges, she built Openroom to pave a future towards a transparent and connected rental ecosystem.

Drawing from her extensive background in software product management spanning education, telecommunications, insurance, and artificial intelligence, Weiting has become a trusted advisor to founders of venture-backed companies. Beyond the tech sphere, Weiting managed properties for over a decade and made significant contributions to community leadership. She’s served on the Board of Rotary District 7070 and chaired various organizational committees.

Weiting balances her professional endeavours with being a parent of two kids under two. Alongside thousands of other parents, she was awarded participation trophies in innovative improvisation, ever-changing expectations management, daily roadmap planning, and hardcore patience!

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