Rent Control: A Popular Paradox

Every well intentioned person who concerns himself with economic problems of housing has the same basic objective, namely to determine the best way to provide every Canadian with access to the "best possible standard of housing". A similar statement of objectives could be made about most aspects of Canadian life - "best possible health care", best possible standard of nutrition", "best possible transportation system" etc. It is obvious that with limited resources, the notion of "best possible" must be taken to mean "best possible given the need to improve other aspects of our standard of living". In approaching the problem of housing we must, therefore, recognize the limitations that the need to satisfy other objectives places on the "possible" rate of progress toward our goal.

Rent control is a form of government intervention that is being suggested with greater frequency in Canada as a solution to "the housing problem". Two provinces have already adopted it in some form and pressure from tenant groups is rising in other provinces. In view of this rising tide of opinion and given what must be called the "disastrous" experience of other countries with rent control, The Fraser Institute has undertaken this book of essays to provide a factual consideration of the housing problem and the solution to it that rent control is said to offer.

The first part of the book endeavours to determine the nature of the housing problem. That process also provides a concise documentation of current and past housing conditions in Canada. It will come as a surprise to some to learn that current conditions were anticipated as early as 1966 and exactly foreseen and documented in 1970.

The conclusion that the available information, our analysis of the information and the analysis of others, suggests that there is not a housing problem in the sense that there is something wrong with the rental housing market. The housing market is responding in a perfectly predictable fashion to the policies and events of the past five or six years. There is, however, and has been for some time, a poverty problem - a problem that has been exacerbated by the fact that the pressure of policies and events is beginning to force rents up.

The final section of this book develops an income supplementation formula designed to protect all Canadians from the hardship associated with the rising cost of basic shelter.