Why Rent Control is Good for Condo Investors
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Speaker 1: This next article is from the Financial Post, and the headline is Haider-Moranis Bulletin: Why rent control is a false cure for housing shortages. This article is written by an associate professor at Ryerson University who is looking at the real estate markets, and basically they’re saying again, as we’ve talked about many times, and there’s so many studies. This is yet another study from the academic world, which is saying that rent control does not do what you think it’s going to do. Speaking to the political powers out there that are putting in rent control in Ontario. We’ve got that now for condos as of the past few months from the Fair Housing Plan.
The Fair Housing Plan, AKA the Unfair Housing Plan. And basically it’s just another piece of evidence again to say … here it is in the article. So there you go, rent control doesn’t improve, but exacerbates housing affordability. So it’s doing the exact opposite of what you think it’s going to do. It’s going to reduce supply. It’s going to increase new rental rates dramatically.
Yes, if you are a landlord, it’s a bit of double-edged sword. The tenants that you have in your properties now, they’re going to not likely move. They’re going to stay where they are and you’re not likely going to be able to increase those rental rates very much. But if you’re an active investor, continuing to add to your portfolio, the new properties that you’re coming in, whenever your existing properties, those tenants do move out, your new rents that you’re going to be able to achieve are going to be higher and higher and higher every year as the supply is decreased more and more over time because of these rent control measures.
Again, there you have some more great reading on rent control. Hope you enjoyed that.