Monday, June 11, 2007

Why Rent Controls are STOOPID

Alright, so my intentional misspelling of the word stupid is probably ruining my credibility, but I don't care.

The problem in Alberta right now is NOT that rent is too high. Yes, I know that is a problem, but it is a manifestation of something deeper. Using rent control to solve the housing crisis in Edmonton is like putting a band-aid on a leg to stop the bleeding... when an artery has been gashed.

The problem is that there is not enough housing. And enforcing rent control will actually make this problem WORSE because it will lower the supply of rental housing. There are two causes of this: 1) owners of rental properties will sell them off as condos because the return on their investment isn't as high and real estate is at a premium. 2) People like me, who can stay at home for a few months and wait until the madness subsides, will find it feasible to take a one-bedroom apartment to ourselves rather than sharing a two- or three-bedroom with roommates.

Anyway, my advice to all the people who are experiencing the pain of high rents:

Instead of petitioning the government, ask for subsidies to cover the gaps, because it is a better temporary solution than rent controls.

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