We are not in a housing crisis
Canada’s “housing crisis” is not a crisis at all. In fact, the housing system is running how it was built to run, and serving who it was built to serve: the ruling class.

Between 2023 and 2024, my rent increased by 17 per cent, from $765 to $900 per month. This seems absurd. During the same period, the inflation rate never exceeded 5.9 per cent, and no improvements were made to the property. Why did my rent get hiked so aggressively?

The reason is that I ended my lease and moved home for a few months. Ontario has been under vacancy decontrol since 1996, meaning that once a unit is vacated, there is no limit to the amount that the landlord can charge the next tenant. Landlords often take advantage of vacancy decontrol and increase rents between tenants, in a practice called “rent gouging.” 

Vacancy decontrol is one of the measures brought in by the Ontario government to address the housing crisis by incentivizing the construction of rental units. To the same end, in 2018, Doug Ford ended rent control for units first occupied after November 2018. This allows landlords to increase the rent by any amount, as opposed to an amount capped by the inflation rate, every 12 months. 

Policies like the rollback of rent control serve to encourage the construction of new purpose-built rentals. Although increasing the number of available rental units addresses the housing shortage that is seen across Canada, it does not address the affordability of these units. Despite (or perhaps because of) the introduction of these measures to tackle the housing crisis, rent prices have skyrocketed across Ontario in the past decade, and rent increases are greatly outpacing wage increases. One in three renting households spend more than 30 per cent of their income on rent, a somewhat arbitrary threshold beyond which housing is considered unaffordable. Clearly, housing is only becoming less affordable in Canada.

Housing is fundamentally different from other commodities where a simple supply and demand relationship may loosely hold. First, housing is a basic human need, and so there will always be a demand for housing. People have no choice but to sign on to an unaffordable lease if every other option is also unaffordable—even if that means having to cut back on food. Second, as housing and social policy researcher Ricardo Tranjan illustrates in his book “The Tenant Class,” in contrast to most consumer goods, not leasing a unit does not mean that the landlord is not turning a profit. 

Property prices in Canada appreciate enormously; homes are expected to appreciate by an average of 6 per cent this year. Hence, there is less incentive for landlords to get a new tenant immediately by lowering the rent. Waiting for a tenant who will pay the asking price still allows them to generate capital. Therefore, those who control housing—the landlords—have a huge amount of power in determining the ‘market price’ of a rental. The market is not deciding the rent, landlords are.

Furthermore, landlordism is exploitative, and is it not true that landlords provide housing. Landlords simply restrict access to and squeeze profits out of existing housing. 

The idea behind paying rent is that the rent money will go towards the maintenance, administrative, and included utilities of the rental unit. 

However, most rents far exceed this, meaning that the landlord is pocketing whatever is not spent on the rental unit. There is no justification for this. Yet, renters are left with no choice but to fork over hundreds of dollars more than what the services of the landlord are worth per month, just to have a place to live. It is a shame that governments allow landlords to control and exploit a basic human need. 

If this is the case, why are policies focused on increasing the supply of rentals, rather than controlling the outsize role landlords play in determining rent prices?

Policies like vacancy decontrol and ending rent control are what Tranjan calls ‘supply-side’ solutions to the housing crisis. He argues that such ‘supply-side’ arguments exist to fill the pockets of landlords and developers. They incentivize construction by increasing the amount of potential profit that landlords can extract from these units, which directly benefit landlords and developers. Allowing ‘supply-side’ arguments to dominate the narrative around housing not only means that the ‘solution’ is a profitable one but also means that there can be continuous development. As Tranjan captures: “If we build more but rents continue to go up, we must not be building enough. Build more, faster!” 

When 40 per cent of the Members of Parliament have interests in real estate, and powerful lobby groups representing real estate interests exist, it is wholly unsurprising that the role of landlords remains unchecked, while profit and shareholder value is prioritized. We cannot expect those who stand to profit from housing to act against their own class interests.

Evidently, what the housing system in Canada is doing is funnelling money from the tenant class to the landlords and developers, and it is doing so remarkably well. What it is not doing is providing stable, affordable, safe housing for all. Initiatives such as vacancy decontrol and ending rent control, brought in to supposedly address the housing crisis, green lights landlords to hike rents to exorbitant levels and only accelerates this concentration and transfer of wealth. 

Stafford Beer, a British theorist and professor, claims that “the purpose of a system is what it does.” Although the housing system operates under the pretence of providing housing, it is, by function, a system that organizes mass wealth transfer to the landlord and ruling class.The term “housing crisis” obscures this reality. It implies that the current situation is an extraordinary, acute, short-term event within a system that otherwise provides housing. This is not true. What we call the housing crisis—the lack of access to affordable housing—has been ongoing for decades in Canada and has been hugely profitable. The housing crisis is not a crisis at all. It is a sign that the housing system is running like a well-oiled machine.

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