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<\/a><\/p>\nPhoto: James Bombales<\/em><\/p>\n Last week, the Ontario government announced that, effective immediately, rent control rules will no longer apply to new housing units added to the province\u2019s rental market.<\/p>\n The move was met with backlash from some affordable housing advocates, while many industry associations, including the Ontario Real Estate Association and the Toronto Real Estate Board, praised the decision. It largely reversed the primary aspects of the Wynne government’s April 2017 Fair Housing Plan. <\/p>\n Those against rent control argue that it discourages the construction of purpose-built rental units, cutting into an already low level of supply in a time when more and more people are looking to rent. <\/p>\n\n \u201cRent control is not good policy, price controls in any industry typically result in unintended consequences,\u201d writes Bullpen Research & Consulting president Ben Myers, in a recent analysis of the decision.<\/p>\n According to Myers, the only way to avoid huge jumps in rental rates is to ensure there are as many rental units available as possible. <\/p>\n While he acknowledges that there were 2,876 purpose-built rental starts in 2018 \u2014 the highest level since 1993 \u2014 Myers says there are more factors at play in the jump in units than just rent control. <\/p>\n \u201cThere are several reasons that many of these projects moved forward this year,\u201d he writes. \u201cPopulation growth in Ontario is at a 30-year high, the mortgage stress test and higher rates have reduced ownership demand and increased rental demand.\u201d<\/p>\n Ultimately, Myers doesn\u2019t believe that removing rent control on new units will have a huge effect on the level of purpose-built rental supply in the Ontario housing market.<\/p>\n