That’s the question CMHC’s latest piece takes on. The author’s position is blunt: yes, most rent control regimes discourage private investment and slow the pace of building. His prescription is to strengthen tenant protections but keep rents largely at the mercy of the market - on the assumption that investor incentives will translate into more supply and lower rents.
But a few paragraphs later, the story changes. Suddenly, we’re warned of a “short-term risk of oversupply” and told that falling rents could “curtail incentives to build.” After years of insisting Canada has a housing shortage, affordability itself is cast as the problem - because it threatens returns. If the market is the solution, why is it treated as a crisis when it produces lower rents?
The examples are just as telling. Tokyo’s rental supply is credited to limited rent control, with no mention that Japan’s population has been shrinking for more than a decade, meaning supply naturally exceeds demand. And here in Ontario, new housing has been exempt from rent control since the 1990s, yet rental construction was stagnant for decades. If rent control was the main barrier, we’d have seen a rental boom long ago.
It’s also worth remembering: this is the same author who opposed restricting short-term rentals because it “risks undermining confidence in the desire to invest in new supply.” In other words, even measures to keep homes available for long-term renters - or for buyers - are framed as threats if they make investors uneasy.
This is more than a disagreement over rent control. It’s a glimpse into the mindset of our national housing agency: a deeply neoliberal worldview that treats investor confidence and returns as the ultimate policy goal.
Affordable housing - whether rented or owned - is secondary, something to be tolerated only if it doesn’t disrupt market incentives.
As long as this remains CMHC’s guiding philosophy, we will keep building a housing system designed to serve capital first and Canadians second.
You can read the full CMHC piece here: https://lnkd.in/gS2_cF7K
John Pasalis is President of Realosophy Realty. A specialist in real estate data analysis, John’s research focuses on unlocking micro trends in the Greater Toronto Area real estate market. His research has been utilized by the Bank of Canada, the Canadian Mortgage and Housing Corporation (CMHC) and the International Monetary Fund (IMF).
Have questions about your own moves in the Toronto area as a buyer, seller, investor or renter? Book a no-obligation consult with John and his team at a Realosophy here: https://www.movesmartly.com/meetjohn
Email John
