How rent control can help tenants — or not
With the cost of rental housing hitting all-time highs, many current and would-be tenants alike have something on their mind: rent control.
With the cost of rental housing hitting all-time highs, many current and would-be tenants alike have something on their mind: rent control.
The average rent for a two-bedroom apartment in a purpose-built building was $1,258 per month in 2022 — much more in Toronto and Vancouver — according to the Canada Mortgage and Housing Corporation (CMHC). Those rates are an increase of 5.6 per cent over the previous year, says CMHC — well above the 2021 average of just three per cent.
A lot of tenants who are "truly struggling with rising rents" are pushing for more regulation, said Bahar Shadpour, director of policy and communications at the Canadian Centre for Housing Rights (CCHR), a tenants advocacy organization.
But rent control works differently in various parts of the country, and there are mixed opinions about whether it's the answer.
In all provinces and territories, rents can typically only be raised on a leased unit once every 12 months, and landlords must give between one and three months' notice, depending on the length of the lease. But with rent control, governments set a maximum increase each year. In Ontario, for 2024, it's 2.5 per cent.
But in most places, those maximums only apply to tenants currently renting a unit. Generally, landlords can increase rents between leases as high as the market can bear.
Landlords can apply for increases beyond the mandated limits to cover changes such as repairs or upgrades to a unit. They can also evict tenants if the property requires significant repairs or refurbishment — known as a "renoviction" — or if a family member needs to move in.
There are good reasons exemptions like these exist, but they can be abused to sneak in a rent increase, says Mike Moffatt, an economist and assistant professor at Ivey Business School in London.
Moffatt says while regulation can prevent landlords from "taking advantage of market conditions," rent control typically only benefits existing tenants. It can lead to higher rents for new tenants. "Oftentimes, those rents go up [when] the existing tenants leave," he said. "So it tends to advantage one group over another."
Shadpour says one solution is to expand vacancy control — to "disincentivize that form of rent gouging."
