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Rent Controls in Ontario: Roofs or Ceilings?
Author(s) -
Smith Lawrence B.,
Tomlinson Peter
Publication year - 1981
Publication title -
real estate economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.064
H-Index - 61
eISSN - 1540-6229
pISSN - 1080-8620
DOI - 10.1111/1540-6229.00234
Subject(s) - subsidy , renting , economics , rental housing , economic shortage , revenue , government (linguistics) , tax revenue , labour economics , unit (ring theory) , control (management) , value (mathematics) , public economics , market economy , finance , linguistics , philosophy , mathematics education , mathematics , management , political science , law , machine learning , computer science
This paper describes the rent control program in Ontario and discusses the consequences of these controls. It indicates that rent controls caused both a small nominal decline and a large real decline in the per unit value of rental apartments, substantially reduced new rental housing starts, generated a rental housing shortage, created a dual market with significant rent differences between the controlled and uncontrolled (new construction) sectors, and imposed large costs on government in the form of foregone tax revenues and increased rental housing subsidies. The paper also indicates some of the political responses to the developing economic effects, such as the imposition of additional land use controls and increased government spending programs to stimulate new rental construction.