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To make matters worse, rent controls, which the Wynne government expanded to include all new-builds, further eroded the incentive for developers to build rental housing. Although this policy was only in place for about a year before the Ford government scrapped it last fall, it almost certainly hurt the rental supply. Indeed, soon after the Wynne government announced the policy, thousands of rental units being built across the GTA were converted to condominiums, assuring builders a stronger more predictable return on investment.

To the current government’s credit, its reversal of damaging rent controls shows a degree of recognition that there’s a supply-demand imbalance and they need to encourage, not discourage, rental construction.

Nevertheless, it’s likely that even a single year of rent control did lasting damage to the GTA rental market, both by halting projects that would otherwise enter the market, and by reminding developers of the uncertainty government can inject in the long-term feasibility of rental projects. It’s no wonder so many have chosen the relatively safe, short-term returns of condo development over the hassle of worrying whether future rent controls will limit the amount of rent that can be collected over decades.

So what more can be done to increase the supply of rental housing and increase affordability for renters?

First, the high cost of land can be mitigated by allowing more units on residential lots. How? Zone for additional height or lot coverage, and relax zoning bylaws in single-family neighbourhoods to allow for secondary units (such as basement or laneway units) or the division of existing homes into duplexes or triplexes, as several U.S. cities and states have done.