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Rent controls and stabilization are supposed to improve the lives of renters. They seldom do. Still, from New York to Toronto, such restrictions are politicians’ favoured response to housing shortages and affordability concerns.

The Ontario Liberals followed that mantra in April when they restricted the annual rent increases for existing tenants to a maximum of 2.5 per cent. Ontario Premier Kathleen Wynne claimed such measures were needed to cool rents and house prices.

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Six months later, the unintended consequences of rent restrictions have started to appear. A recent report by Urbanation revealed that no fewer than 1,000 planned purpose-built rentals have been converted to condominiums in the GTA.

More are likely to follow, thus further restricting the supply of rental housing in Ontario.

Rarely is the chasm between political expedience and economic reality so wide.

Writing in the New York Times, Nobel laureate Paul Krugman has noted that while economists may often find consensus elusive on matters of policy, rent control is an exception. According to Krugman, the “analysis of rent control is among the best-understood issues in all of economics, and — among economists, anyway — one of the least controversial.” Krugman noted that 93 per cent of members of the American Economic Association believed that “a ceiling on rents reduces the quality and quantity of housing.”