Politics! Does rent control really work? Rent control is a restriction on the supply side of the market but this is the side that needs the most stimulating when we are in times of rental shortages. That is now. If a policy that is reducing supply is put in place the shortages are going to just worsen.
The Frontier Centre for public policy has addressed this issue many times and it shows real world examples of rent control failures. Bill Madder, our executive VP for the Association of Saskatchewan Realtors, says that the proposed "second generation" rent control creates two classes of renters; "Established tenants in rent-controlled older buildings; and tenants in newer buildings with no controls". For new renters trying to find rental accomodations they can afford this creates a huge struggle. Those established renters in older buildings will have no motivation to leave which limits turnover and drives down vacancy rates. These renters are then subject to deteriorating living conditions as the landlords will have limited money, if any, to do any improvements so this will lead to 'slum lord' status. Owners of these buildings won't have any incentive to hold onto them and will likely turn them into condos as they can make a profit selling condos for sale in Saskatoon.
So what would rent control do in Saskatoon? Since 2006 our population in Saskatchewan has grown by almost 66,000 people. These new residents need somewhere to live and can't always purchase a home for sale in Saskatoon or surrounding area as soon as they get here. A strong economy paired with high demand for workers means our province needs to welcome new residents who are filling these labour demands and rent control will mean a decreased supply and quality of our rental market which will create an issue for people looking to move to Saskatoon and Saskatchewan in general.
My belief? Rent control is a dangerous slipperly slope that will further harm our already low vacancy rate and deter people from moving here. Some will call it 'artificial affordability' and I tend to agree.
Time to get yourself into the Saskatoon real estate market if you are on the fence! And I know just the Saskatoon REALTOR(R) who can help!
Century 21 Fusion