Evidence-Based Consideration of Rent Control and Vacancy Control Policies
Increasingly in BC we are witnessing local governments advocating for more stringent rent controls without grounding their decision-making processes in the best available empirical research and to carefully consider both the intended and unintended consequences of additional rent regulation.
This reality matters because contrary to popular belief, rental housing quality does not exist independently from housing economics.
A rental building cannot be properly maintained, upgraded, decarbonized, seismically improved, or modernized without capital. That capital can only come from one of two sources 1) from positive operating performance, or 2) some form of subsidy. When policy discussions focus exclusively on limiting revenue while simultaneously increasing operating obligations, they ignore a fundamental reality; revenues and costs are inseparable.
Be Careful What You Wish For
We cannot have a serious conversation about stricter maintenance standards, enhanced tenant protections, climate resilience, accessibility upgrades, and improved housing quality without also discussing the financial capacity required to deliver those outcomes, and this connection is not theoretical…it is direct.
If housing providers are expected to maintain aging buildings to higher standards while their ability to generate operating surpluses is continually restricted, fewer resources remain available for reinvestment. Over time, this creates exactly the outcome nobody wants, which is older buildings receiving less investment, deferred maintenance becoming more common, and the quality of rental housing gradually declining.
In other words, discussions about rent control, vacancy control, stricter building standards and operational costs cannot occur in isolation from one another. They are all part of the same operating equation.
The objective should be a rental housing system that simultaneously protects tenants, encourages ongoing investment, preserves existing rental stock, and supports the construction of new housing. Policies that focus on only one side of that equation risk undermining the others.
With this said, one of the most comprehensive reviews of rent control research available today is economist Dr. Konstantin Kholodilin’s review of the global empirical literature, published in the Journal of Housing Economics. The “meta” study (the only one of its kind) synthesizes decades of empirical research and examines the effects of rent regulation across a wide range of jurisdictions and market conditions. Its findings are nuanced – rent controls can provide benefits to incumbent tenants in the short term, but the broader body of evidence consistently identifies significant trade-offs, including reduced rental supply, lower housing mobility, reduced investment, and deterioration in housing quality over time.
We encourage leadership and staff of all levels of government to carefully review this important study. Read the full review here.