The Importance Of Rent Control In Canada

Introduction
Rent control is a government regulated price ceiling that imposes restrictions on the amount landlords can charge tenants for rent, or by the amount the rent can be raised each year (Miller, R., Abbott, B., Fefferman, S., Kessler, R., & Sulyma, T. 2012). Rent control was introduced to prevent landlords from gouging tenants and to ensure that every individual has access to affordable housing. This raises concern of how effective rent control is at promoting equity within its society. In this paper the consequences of imposing rent control in Toronto, Ontario in contrast to Edmonton, Alberta, where rent control does not exist, will be explored.
Population Growth and Effect on New Construction
Toronto has a price ceiling in the form

Therefore, one can conclude low vacancy rates represent the shortage of housing for any city. In Edmonton, we see low vacancy rates when Alberta’s economy is heated and booming which generates an increased demand for the construction of new housing. When the economy levels back out, the vacancy rate increases. This is a normal function for any free market economy. The graph below shows the vacancy rates for Edmonton and Toronto from 1992-2013. In the 22 years, the graph shows Edmonton had a higher vacancy rate then Toronto 16 of those years despite Edmonton’s population growing at a faster rate than that of Toronto’s. In Addition, we can also see Toronto had a vacancy rate 2% or lower 11 of the 22 years depicted (Canada Mortgage and Housing Corporation, 2014a). Toronto’s vacancy rate has stayed consistently lower regardless of how the economy was doing. On the contrary, Edmonton’s vacancy rates fluctuated with the ups and downs of the economy. The lack of new construction of rental units with a growth in population, extremely effects the vacancy rate in Toronto. When comparing both city’s population growth, you would expect to see Edmonton with the lower vacancy rates since it has grown faster, but instead we see the

The restrictions on the amount the rent can be raised have prevented the law of supply and demand to find the market clearing price allowing for the supply of rental units to meet the demand. Edmonton on the other hand, even in times of economic boom has not implemented any form of Rent control. Therefore, allowing the laws of supply and demand to set the price. By doing so one can see when comparing Edmonton’s vacancy rates and population growth have allowed for Edmonton’s supply of rental units to catch up to the demand for rental units. Consequently rent control has done the exact opposite of what it was implemented to do in the first place, instead of trying to make sure everyone has access to affordable housing it has created a shortage for