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Rent Control: The Hidden Truth

Student

By: Onomo Ogbe

The Ontario government earlier this year removed rent control for new units while maintaining rent control for current tenants as part of a new housing supply action plan. In the past few years, many countries and jurisdictions (e.g. the United Kingdom, Germany, and four states in the United States of America) have enacted stringent policies on land use and building regulations. Policies like this make it harder to build additional housing units in many places, including Canada. The demand for housing is rising and so is the price because of the low supply of homes. Limiting the ability of landlords to charge market rent, leads to a withdraw of units from the market and conversions to higher valued units, like condominiums, which are not subject to rent controls.

Evidence from San Francisco The American Economic Review, led by Rebecca Diamond, wrote a report showing how rent control impacts tenants, landlords and the economy. Introducing rent controls caused:

· Reduced renter mobility by 20 percent while affected landlords reduced their rental housing supply by 15% and

· Landlords to shift resources to other real estate exempt from rent control.

Instead of addressing problems for tenants, rent controls combined with rising demand made the rental situation worse.

Payback of Ford’s new policy on rent control

Rent controls are motivated by the desire to assist the less privileged in what is believed to be a defective competitive market. However, they often make the situation worse. By eradicating rent control on new units, the Progressive Conservative government hopes to increase unit supply by incentivizing investors and encouraging developers to build.

Removal of rent control policies in Toronto is already having an impact. The recent rise in purpose-built rental housing entering the Toronto market demonstrates the flaws in the previous government’s rent control policies. High rental costs and housing scarcities are best fixed by building more homes, not by creating policies that restrict supply.

Existing tenants do benefit from rent controls, through lowering housing costs, but at the expense of the Landlords, society as a whole, new tenants, and those who wish to move. Rent controls allow tenants to stay at their current home virtually indefinitely without facing market increases in the house rent. In theory, this prevents Landlords from setting rents too high.

Why rent control policy is not the solution

Yet, rent control increases the quantity demanded for rent, while also decreasing the quantity supplied. In other words, it creates a shortage. Landlords also lose any incentive to improve their rental properties. Low-income individuals who are “lucky” enough to have a rent-controlled apartment are in effect sentencing themselves to a life of deteriorating amenities. Developers, as a result, have more reason to favour condominium development, due to higher possible returns, thus making it more difficult for tenants to move from their deteriorating units, as the supply is not available.

What will benefit renters?

Relaxing of rent controls would benefit renters. However, the existence of rent controls has so distorted the market that more actions are also required. Tax incentives to developers to build new rental apartments will help to increase the supply of rental units and make renting more affordable.

Tightening rent control or adopting new control will not make things better except for people renting in the short term. According to Mayor John Tory, affordable housing initiatives should precede any rent control changes. He said, “The housing affordability issue in Toronto is too serious to consider relaxing rent controls before increasing supply”. Yet, if we truly wish to improve conditions for renters, government needs to ease the restrictions on housing supply, so more homes get built.

A Progressive Country with an Archaic Electoral System, Is There a Need for Reform?

Student

By: Shane Calderwood

The 2019 Canadian election is over, and the electoral map suggests Canadians are more divided than ever before. Western Canada voted overwhelmingly for Conservatives taking the entire provinces of Alberta and Saskatchewan, and Canadians also witnessed the resurrection of the Bloc Quebecois. Meanwhile, the Liberals won riding throughout Newfoundland and Labrador, Yukon and the Northwest Territories. Arguments arising from the election results include the lack of voter representation in Ottawa, the misrepresentation of the popular vote, and the rise of strategic voting. While Western Canada is giving rise to the conversation of a “Wexit” and Quebec sovereignty is mainstream political Canadian discourse again. All these trends underscore that the time for electoral reform is now, and Mixed Member Proportional Representation (MMP) is the optimal choice for Canada. MMP solves the issues related to voter participation, voter representation, and strategic voting.

Political Issues and Why It Matters

Voter participation is always an issue in the federal election, and the 2019 voter participation results were only 66% which is a drop from 68% in 2015. Various theories give way to why people don’t vote such as lack of trust in government and so on, but one of the major reasons is the idea that “my vote doesn’t matter.” This goes to the debate that the current system discourages voter participation.

Secondly, there is an argument for considering the popular vote results as a true reflection of what voters want and using the popular vote as means to form government could encourage greater voter participation as it would mean, “all votes do matter.” The results of the popular vote include Conservatives at 34%, the Liberals at 33%, the Bloc at 8%, NDP at 16% and the Green Party at 7% which is reflective of the minority government as no party could capture 50% of the popular vote, but alternatively, the distribution of seats in the House of Commons unfairly represents these results and in turn, fails to reward voter participation.

Lastly, the idea and argument of strategic voting, some voters are more inclined to vote for a party they think will keep another party from winning versus voting for the party they support which enables a two-party system in Canada. I can remember walking into the voting centre as a strong supporter of climate change, but when I cast my vote for the Green Party, I was thinking I should throw this in the garbage versus the ballot box as I knew my preferred choice has zero chance of winning my riding let alone the election. Thus, my ballot was worth as much as the piece of paper I used to cast it. There is a position that single plurality has been a means of compromise in Canada’s electoral system, and what has worked for years should not be changed. I argue a country as progressive as Canada ought to have an electoral system that is reflective of its core values which include diversity and inclusion.

From First Past the Post to Mixed Membered Proportional Representation The First Past the Post electoral system has been the preferred option since the conception of Canada. MMP could be used as tool to unite the country as it ensures all parties gain fair representation in the House of Commons and it forces them to work together to pass legislation whereby mediating the rising nature of divisive political discourse during a time where populism divide and the tyranny of majority erodes democracies.

Call to Action

In 2015, the Liberal Government made a platform promise to address electoral reform but would later walk back this promise suggesting there was a lack of consensus on the direction or available options. However, according to recent numbers released by the Angus Reid Poll (2019) over 68% of Canadians favour electoral reform, and another poll suggests 77% favour proportional representation. These stats are very reflective of the percentage of voter participation in the election as well which goes to the argument that the current federal government of Canada has a clear mandate to implement MMP as the optimal electoral reform option.

Region of Waterloo Residents Priorities 2019

Student

By Laura Krizan

The results of this poll were based on an interactive voice response survey conducted Friday March 15thand Monday March 17th, 2019. A total of 1003 individuals completed the first question of the survey and 715 completed the entire survey. The survey was designed to aid in the development of the Region of Waterloo’s Strategic Plan for 2019-2023. The Strategic Plan helps Council and staff set priorities and achieve goals, all while keeping the community’s concerns and suggestions in mind. A significant proportion of the Strategic Plan includes hearing input from the public and listening to comments, concerns, etc. so that the Region can set appropriate priorities. The questions in the survey are also aimed to help the Region of Waterloo during the drafting of its Strategic Plan in the future.

The Strategic Plan has 5 focus areas: Thriving Economy, Sustainable Transportation, Environment and Sustainable Growth, Healthy, Safe, and Inclusive Communities, and Responsive and Engaging Government Services. The questions that were administered as a part of this survey were developed by ensuring that these focus areas were kept in mind.

The first question on the survey asked participants about the level of confidence they have in their local government. The results are shown in the chart below, indicating that a majority of citizens (56%) are confident in the regional government to some degree (including somewhat confident, confident, and very confident levels).

The survey was a way to analyze the top priorities that need to be set by the Region of Waterloo for the development of their Strategic Plan. Respondents were asked what they think the biggest priority in Waterloo Region is that the regional government should address.  The results, as shown in the chart below, have been ranked based on the number of respondents choosing a given category as their top priority. The top 3 priorities are: 1) Supporting the development of affordable housing 2) Managing growth, 3) Protecting the environment. 

A significant component of the Strategic Plan focuses on the services that are delivered by the Region of Waterloo, such as public transportation, waste collection, and so forth. In order to better understand the preferences among citizens living in the Region of Waterloo in relation to the delivery of services, the survey asked: “Regional Government must balance the cost of delivering services with taxation. Which of the following would you most prefer for property taxes in Waterloo Region?” 

Results indicated that 19% preferred increasing taxes to improve services while 14% preferred having property taxes decreased. 23% preferred keeping taxes that same and possibly reducing services. The largest proportion (44%) preferred having taxes increased with the rate of inflation and maintaining current services.

This survey was also used to analyze the best ways and platforms to receive public input in the future. Respondents were asked, “If the Region of Waterloo wanted to gather public input or engage you on major issues or decisions, what are the best ways?” It was found that the best ways to gather public input or engage on major issues/decisions in the region are: 1) Online Survey, 2) Social Media, and 3) Telephone Survey. All other options that were included in the survey are listed below.

Ultimately, the survey helped to provide the Region of Waterloo with important information that can be used during the development of the 2019-2023 Strategic Plan. A total of 9 questions were administered, yet the responses that have been analyzed above highlight the most critical results that will be taken into consideration by the Region.

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Survey Details

The Interactive Voice Response (IVR) survey was conducted by Laura Krizan; Abby Schlueter; Andrea Volford, and Professor Anthony Piscitelli on March 15th and March 17th, 2019. Throughout the development of the survey, the students worked alongside Lorie Fioze, Manager of Strategic Planning and Strategic Initiatives. The questions that were formulated for the survey focused on supporting the development of the Region of Waterloo’s strategic plan. The survey was funded by the Region of Waterloo to support this initiative. 

Sampling Approach

The sample size was created by randomly selecting Waterloo Region landlines listed in a digital phone book. A sample of likely cellphone numbers was added by randomly selecting phone numbers that were originally assigned to Waterloo Region, according to the Canadian Numbering Administrator. Sampling errors exists as a result of this approach due to the mismatch created by the random dialling of phone numbers as opposed to randomly sampling actual Waterloo Region residents.

Response rate

The survey called 46,912 live lines. The response rate was 1.5%, which is based on 715 respondents who completed the entire survey. All 788 respondents who answered the first three questions were included in the results. It is worth noting that 215 (21%) respondents were not eligible to participate due to being under 18 or not living in Waterloo Region.

Weights

Results of this survey have been weighted by age, gender, and city/township according to the 2016 census. The full weights are posted along with the raw data on OpenIcpsr.org and can be found by visiting: http://doi.org/10.3886/E110225V1  

Margin of Error

Results are considered accurate +/-3.7%, 19 times out of 20. The margin of error on subsamples is higher.

Raw Data

Raw survey data is available on OpenIcpsr.org. The data can be found at: http://doi.org/10.3886/E110225V1  

Disclaimer

The survey results will exhibit sampling error as a result of the mismatch created by the random dialling of phone numbers as opposed to randomly sampling actual Waterloo Region residents. This survey was approved by the Conestoga College Research Ethics Board.