This report argues that vacancy control is an effective and necessary policy tool for addressing the extreme housing affordability crisis facing B.C. renters. In effect, vacancy control ties rent to the unit and means landlords cannot hike the rent when a tenancy turns over.
Mainstream discussion has entrenched a viewpoint that argues rent regulation, and especially vacancy control, is harmful. A closer analysis of academic and policy literature suggests otherwise: there is in fact no consensus that rent control is bad policy, and there are significant limitations in the econometric methods used by opponents of rent control.
Instead, this study employs a political economy perspective to question some of the core assumptions held by today’s orthodox economists when modelling housing and land markets, including their failure to incorporate key social and political variables into their analysis. Drawing on research that uses diverse qualitative methods, descriptive statistics, and other approaches, this paper challenges five key development-industry myths that dominate current rental housing debates, namely:
1. The overall (lack of) supply of housing is the primary driver of the housing affordability crisis and that rent control deters investment in new supply;
2. Increases in supply lead to a positive filtering effect, whereby those who can afford new units will vacate their existing units for the benefit of down-market tenants;
3. Rent control deters rental housing maintenance and repairs;
4. “Mom and pop” landlords control a major share of the rental housing stock and are especially harmed by rent controls; and
5. Rent control is costly to implement.
This report examines past and present vacancy control policies in B.C., Ontario, Manitoba and P.E.I. from the 1970s onward and finds no evidence that tying rent to the unit had significant negative impacts on new rental housing supply. Instead, development industry behaviour has been shaped primarily by wider economic factors, such as investment cycles, inflation, global recessions, and federal housing and taxation policy.