The current affordability crisis in Saskatchewan is proving particularly acute for renters. Over the past five years, the cost of rent in purpose-built apartments in Saskatchewan has risen 33.9 per cent, placing the province behind only Nova Scotia (+43.9 per cent), Alberta (+38.5 per cent), and B.C. (+36.9 per cent) for long-term rent growth. Moreover, while other cities are beginning to see declines in asking prices for vacant units, Regina and Saskatoon witnessed some of the highest rent increases in the country over the last year.
These cost pressures squeeze renters to a greater extent because they often have lower household incomes and allocate more of their income to shelter costs than homeowners. Given this persistent unaffordability for renters, why is rent control not on the table?
It is no secret that the Saskatchewan party government is allergic to rent control as an affordability policy. In 2008, at the height of the economic boom with housing vacancies at record lows, then-Premier Brad Wall dismissed rent control as “counterproductive if the goal here is more housing.” The current government seems to be singing from the same song sheet, with Minister Terry Jenson stating they have no plans to introduce rent controls because it will “suppress the building of much-needed spaces.”
The idea that rent controls reduce housing supply by removing the financial incentives for builders to build has become a well-worn shibboleth for Saskatchewan conservatives. And like many shibboleths that people cling to, it’s also entirely untrue.
Much of the critique of rent controls flows from the experience of rent freezes during and after the Second World War. These “first generation” rent controls were instituted with little if any flexibility, as governments froze rents for indefinite periods of time in what were emergency circumstances. Today’s rent controls do not freeze rents but sets limits to rent increases to prevent price-gouging, while creating clear and consistent rent regulations that provide predictability for landlords, tenants and developers.
Despite the persistence of the myth that rent controls kill supply, evidence demonstrates the contrary. In 2020, the Canada Mortgage and Housing Corporation (CMHC) analyzed the impact of rental controls enacted after 1971. The key finding of this study: “There was no significant evidence that rental starts were lower in rent control markets than in no rent control markets.” Recognizing that current debates on rent controls resemble long discredited arguments against minimum wage increases, 32 U.S. economists signed a letter to the Federal Housing Finance Agency concluding that “there is substantial evidence that rent regulation policies do not limit new construction, nor the overall supply of housing.”
Lastly, as political economist Ricardo Tranjan reminds us, smart rental regulation can benefit tenants and businesses alike. Tenants get the security and certainty that annual rent increases will be reasonable and predictable. In turn, employers get workers who don’t have to commute long distances or relocate to other towns due to ever-increasing rents. And when families are spending less on rent, they can spend more at local businesses.
Few businesses profit from high rents, whereas the benefits of securely housed workers are widely shared through the economy.
Flexible and smart rent controls can be an important policy tool to address the affordability crisis in our province. The potential benefits are too important and could assist too many people in our province to dismiss based on antiquated ideas that evidence no longer supports.
