Economists agree, rent control doesn’t work. It makes housing less profitable and disincentivizes both the construction of new builds and the maintenance of existing stock. While it may make some tenants’ lives easier, rent control reduces the quality and availability of housing in the long term. Ultimately, rent control leads to overcrowding, disrepair, and uninhabitability. In the words of Swedish economist Assar Lindbeck: “rent control appears to be the most efficient technique presently known to destroy a city—except for bombing”.

This is economics 101, basic supply-and-demand stuff. If we were to get rid of rent control across the country the market would produce abundant housing and affordability would be restored.

Or so the economists say.

The trouble is Canada’s history undermines the wisdom of these so-called experts.

Experiments with rent control go all the way back to the National Housing Act of 1944, but rent control laws didn’t become part of the national landscape until 1975 when the federal government pressured the provinces into adopting them as part of a national anti-inflation program.

Imposed from above during an economic emergency, rent control played a significant role both in curbing out-of-control inflation and solving the housing crisis Canada was experiencing at the time. A combination of robust rent control and concurrent investments in public housing saw housing prices fall by as much as 30 percent in real terms between 1975 and 1978.

Rent control didn’t cause a housing crisis, it helped stop one.

But its success made it a target, and despite its effectiveness rent control was immediately made into a site of political contest. For 50 years rent control has been attacked by right-wing politicians and industry-funded think tanks. These attacks slowly wormed their way into policy as provincial governments of all stripes gradually weakened rent control legislation across the country. Canada now has an array of discordant policies that differ widely from province to province.

In Alberta and Saskatchewan, for example, landlords can raise the rent by as much as they’d like, however rent increases can only happen once a year. In British Columbia, Ontario, and Prince Edward Island the provinces sets an annual maximum rent increase (this year it is three percent, but outliers like Manitoba have set this year’s maximum at 1.7 percent). These provinces have unique carve outs for additional increases if a landlord is able to meet certain requirements. The most famous of these is vacancy decontrol which allows landlords to raise rents as much they please on unoccupied apartments. These loopholes incentivize anti-renter behaviours like renoviction and demoviction.

Contrary to the assertions of right-wing thinkers, the erosion of rent control has not led to a world of more abundant, high-quality housing. Just the opposite. Housing costs have consistently outpaced inflation, and the quality of new builds has become increasingly suspect.

That said, the current housing crisis can’t be choked up to a single factor, and certainly not something as minor as the loosening rent control standards. There are many confounding variables involved, everything from financialization to public divestment and deregulation play a part. Yet, it must be observed that these phenomena all teach us the same lesson: the more control rentiers have over our housing system, the more dysfunctional it becomes.

This begs the question: Why does the research contradict Canada’s positive experience with rent control so sharply?

For starters, the data on rent control isn’t as cut and dry as many believe. A growing body of evidence suggests that a half-century of attacks on rent control are based on inapplicable data.

Economists’ long-standing hostility to rent control comes from post-WWII case studies where ‘hard’ rent controls were the norm—that is, controls that prevented any increase in rent at all. These early iterations of rent control did not account for inflation and really did disincentivize both regular maintenance and new construction. However, the model of rent control we’ve operated with since the 1970s has been ‘soft’ rent controls, which allow for small increases in rent to account for inflation.

Contemporary research on the impacts of ‘soft’ rent controls finds these policies are successful at keeping rents affordable without negatively impacting the construction of new housing.

In 2020 the Canada Mortgage and Housing Corporation (CMHC) analyzed the impact of Canada’s post-1970 rental control policies. The study confirmed that, “contrary to expectations based on the literature, the analysis did not find evidence that rental starts were lower in rent control markets than in no rent control markets.”

These revelations are inconvenient for those who would like to see the entire housing system turned over to predaceous investors. There has been a concerted effort to undermine the emerging consensus on the fundamental efficacy of rent control. For example, last year, the Financial Post questioned the CMHC’s conclusion that rent control worked in Canada by pointing to a CMHC-funded KPMG report which states that “rent control has generally been found to have reduced rental supply due to the limits on rent prices.” This fragment of a quote was treated by the Financial Post as a coup de grace against the entire premise of rent control in Canada.

The trouble is this is not what the document concludes. The quote is pulled from the “Review of Literature” section on the first page of the KPMG report and largely reflects the established body of research done on post-war case studies of ‘hard’ rent controls. Fortunately, KPMG didn’t end their analysis there; the complete report is 90 pages long. After examining several case studies of ‘soft’ rent controls, including examples from Canada’s own policies in the 1970s, the report finds: “there is no conclusive evidence that rent controls lead to supply constraints […] it is possible that rent control could actually lead to an increase in rental unit production.”

This sort of distortion and dishonesty has become indispensable to those who position themselves against rent control. It’s time to unmoor ourselves from the constraints of failed ideologies and once again embrace rent control as pro-social, economically sensible policy. The federal government needs to work with the provinces to strengthen existing rent control laws, and national standards must be created that close loopholes like vacancy decontrol, enforce inflexible caps on rent increases, and create meaningful accountabilities for landlords.

It’s time for governments to lead a national reinvigoration of rent control across the country.

It’s time to get serious about housing.

James Hardwick is a writer and community advocate. He has over ten years experience serving adults experiencing poverty and houselessness with various NGOs across the country.