Mike Moffatt is the founding director of the PLACE Centre and the co-host of the Missing Middle podcast with Cara Stern.
With Canadian rents increasing by more than 10 per cent in the past year, governments across Canada clearly understand that they have to respond. Ottawa’s proposed Canadian Renters’ Bill of Rights, which is part of a suite of policies aimed at the rental market as part of the federal budget, may not be as transformative for renter protection as some of its other initiatives, but it’s a helpful, if secondary, measure.
In an ideal world, the best protection that renters can have is a wealth of rental options. Research shows that when vacancy rates dip below 3 per cent, a lack of options causes rents to rise faster than inflation – and last year, the vacancy rate was 1.5 per cent for purpose-built apartment buildings and 0.9 per cent in the rented condominium market, according to data from the CMHC. This imbalance can only be solved through a combination of increasing the supply of rental units or decreasing the number of renters looking for a space.
Ottawa has taken action on both fronts. On supply, the government has introduced the Housing Accelerator, invested in housing-related infrastructure and eliminated the GST on purpose-built rental construction. On demand, it has taken measures to reduce the number of non-permanent residents, particularly international students. The imbalance between the number of students and the amount of student housing has been a primary driver of rent increases in midsized higher-education centres in Ontario, such as London, Windsor and Waterloo.
Easing the housing crisis starts with international students, but the work doesn't end there
While a renters’ bill of rights cannot replace a balanced rental market, its components are mostly beneficial to renters – though not entirely. The proposed Tenant Protection Fund, which would provide $15-million in funding to legal aid and tenants’ rights advocacy organizations, will be particularly helpful, despite the relatively modest sum. The promise to “crack down on renovictions” is badly needed, though it is unclear exactly how the federal government will do this. A nationwide standard lease agreement could help both landlords and tenants, and although lease agreements are under provincial jurisdiction, it is not unheard of for the federal government to create a model code for provinces to adopt, with the National Building Code being a prime example. Accounting for rental payment history in Canadians’ credit scores is a double-edged sword, however; it could benefit those who have made all their rent payments on time, but harm those who were late on a payment or two because of economic circumstances.
The most intriguing element of the bill is the requirement that landlords disclose the pricing history of their units. It is unclear that increased transparency necessarily helps renters more than landlords; one group of British Columbia landlords has welcomed the initiative, as it could prompt a second look at pricing for new tenants. John Pasalis, the president of Realosophy Realty, has noted that this transparency could also simply frustrate renters, as “knowing what an apartment rented for five years ago only serves as a reminder of how rapidly rents have increased since then.”
The biggest beneficiary of real-time rental-price data may be governments themselves, as the information would allow them to more quickly identify market tensions. For example, real-time unit-level data would have immediately shown the effect that increased international-student enrolments were having on the rental market in neighbourhoods near colleges and universities. The Blueprint for More and Better Housing has recommended that this data be used for public, universal and free rental registries so it can help all Canadians better navigate the rental market.
Critics of the bill have suggested that the federal government is overstepping its jurisdictional bounds. But nothing the federal government has proposed here is unconstitutional, even if much of it will have to be implemented in collaboration with the provinces. They may yet do so willingly, too; B.C. Housing Minister Ravi Kahlon called the bill “welcome news,” indicating a willingness to collaborate as the B.C. government implements its own slew of policies. Other provinces may be more resistant, but Ottawa always has the option of tying these reforms to federal transfers to provinces. It would be appropriate to do so, as a dysfunctional housing market in one province spills over to others. In Ontario, for instance, increased rents and home prices have prompted an exodus of families to New Brunswick, Nova Scotia and Alberta, where rents and home prices proceeded to skyrocket. These interprovincial spillover effects create the justification for federal action, so long as those actions do not violate the Constitution.
For the first time since responsibility for housing was downloaded onto the provinces in the 1990s, the federal government is trying to meaningfully get back into the mix. That’s a good thing.