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Ontario Liberals and Rent Control

The (as of yet, uncalled) Ontario election campaign continues to show signs of getting in gear. My MPP, Michael Bryant, already phoned my apartment in the past week or so. Today, he and a group of associates were knocking on doors in my building. I don't remember so much activity last time around when was first elected. Perhaps this year he has more of an organization. Or, for some reason, he's quite eager to get a good start to the campaign.

When speaking to people in my building, MPP Bryant was positioning himself as a "Tenant's Advocate". He was handing out a brochure that promised to restore rent control, and that featured endorsements from city councilors and the Toronto Star lauding efforts made on our behalf. (The brochure is downloadable from his campaign website, here.)

Personally, I find rent control to be a bit of a sticky issue. I can see both sides of the argument.

On one hand, skyrocketing rents are truly unfair to hundreds of thousands of urban families in Ontario. In addition, there are many people who simply can't afford these rents, and deserve someplace decent to live.

On the other hand, I can see the argument of those that say the owner of a building should be free to charge what they please. They are the owner, after all. Additionally, it seems clear that by restricting the ability to charge rent, the demand that should economically signal the need for new rental unit construction is muted. The result is very little construction of new rental units, and very low vacancy rates.

If this were a logical and orderly world, I would favour a three-step plan:

  • First, rents for on-going tenancies should be controlled, simply as a fundamental part of the bargain between tenant and landlord. The great imbalance in power between the two parties makes it necessary for the government to protect a tenant from gouging once he or she has moved in. This is in fact the state of the law today.
  • Second, people without the ability to pay should be helped with government-supported affordable housing, or with other forms of financial assistance. This should come from senior levels of government, because municipalities simply do not belong in the wealth-transfer business. The Harris/Eves government has let Ontario down, here. Badly.
  • Third, rather than inter-tenancy rent control that keeps rents permanently and unusually low, I would rather see changes to the tax code or other improvements specifically targeted at improving the financial well-being of the working and middle classes.

I believe that, if reliably carried out, an approach like this could address the concerns of both pro- and anti-rent-control factions.

However, if a bargain was made that dropped demands for rent control in favour of affordable housing and financial assistance, I'm not so sure how well we could count on governments to deliver these benefits.

Recently, I have been reading a book called "The Moral Economy", by John P. Powelson. It is a follow-up to his earlier book, "Centuries of Economic Endeavor; Parallel Paths in Japan and Europe and Their Contrast with the Third World". The first book is a bit of an economic history, and attempts to show what distinguishing developmental features led to sustained economic growth. The Moral Economy tries to carry this history on into the future, charting the course of the free market as it eventually leads to greater justice and equality for all.

Powelson is what we would typically call today a neo-conservative. In The Moral Economy he envisions for the distant future, nearly everything is privatized. In his view, this will lead to greater liberalism and justice. He expects that -- instead of providing services -- governments will enable poorer citizens to acquire the services they need on the free market by transferring wealth to them. However, if I was a needy citizen watching the privatization of health, education, etc., I might worry just how long the government would keep helping me pay for these things that I need before a new form of neo-conservative comes along and tries to cut down my support -- leaving me with nothing. It is this same sort of doubt that leaves me wondering how dispensable rent control really is.

In the end, however, one thing is clear. The overall housing policy of the Ontario Liberals is a great improvement over that of the Tories. My concerns about whether or not to support a reimplementation of rent control are overruled by my respect for the party that promises to act on affordable housing.



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