Launched in Ontario in September, Adam Mongrain of Vivre en Ville hopes his organization’s tool can help curb skyrocketing rents and identify trends in real time
(Photo illustration by Maclean’s, photograph by Eric Carrière)
According to an Angus Reid study released in September, when a tenant vacates a property in Ontario, the rent for that unit increases by an average of 34 per cent. The poll was commissioned by housing-focused non-profit Vivre en Ville to coincide with the launch of the Ontario Rental Registry, which allows users to disclose how much they currently pay for rent at a given address and how much they’ve paid in the past. The goal is to arm tenants and governments alike with up-to-date data to fill in existing gaps.
Census data, for example, is collected every five years and becomes outdated almost as soon as it’s released. The Canadian Mortgage and Housing Corporation, or CMHC, which funds the registry, releases a yearly rental report, but it’s only a sample of the rental stock and it’s often limited to a selection of larger cities. This means, says Adam Mongrain, director of housing policy at Vivre en Ville, that there are enormous gaps in the data. As of last week, more than 40,000 entries have been registered—33,435 in Quebec, where the registry launched earlier this year, and 7,380 in Ontario. Mongrain hopes the registry can be used to curb abuses of the system and catch neighbourhood trends in real time. We spoke to Mongrain about the registry, why it took so long to create this kind of database, and whether more robust rent-control policies are on the horizon.
The headlines and studies and tweets agree: housing prices are out of control. How does a registry like the one just launched in Ontario further the conversation?
By providing up-to-date data at the postal-code level. Mike Moffatt of the Smart Prosperity Institute—one of our partners for this project—has said that the explosion in rents in southern Ontario could have been caught and curbed earlier with better data. When rent in a place like London, Ontario, shoots up, it’s not that people got that much richer. It’s that people are spending all the money they have, or they’re overcrowding. Students bunching up and outbidding families for apartments because there’s no student housing near campuses. That doesn’t have to happen many times before the entire housing market is contaminated and prices go up for everyone.
But can a registry actually affect the price of rentals, or just reflect it?
Unfortunately, we can’t hope for this to put a hard ceiling on rent increases, because the supply crash relative to the demand spike of the last few years have left people desperate to get housed by any means necessary. There’s a power imbalance, and renters are holding the short end of the stick. In places with vacancy control, like Quebec, P.E.I. and Manitoba, a rental registry is a necessary tool to provide consumers with the means to protect their rights and ensure price stability between tenancies—if the rent being asked is an unreasonably increased from the last rent listed on the registry, they can contest it.
The effect on rent increases will be moderate in Ontario, and it will depend on renters hopefully grouping together, making use of information symmetry to negotiate better deals when possible. Competition between tenants is dragging prices up for everyone, homeowners and landlords included, as the final prices paid by tenants are transferred into the value of land: people pay this much to live here, therefore this place is worth this much, and the places next to it are worth just as much. In the medium term, the explosion of land value is going to mean steeper prices for every housing consumer, which is the entire population. If everyone—renters, landlords and homeowners alike—has access to the same information, the registry will act as a dampener, and that’s a good thing.
You launched the Quebec registry in March and the one in Ontario last month. How long has this project been in the works?
Tenant advocacy groups have wanted a registry for a long time but have always been told rental price information is already available to them. Since Quebec’s Civil Code was amended in the 1970s to better protect housing affordability, landlords had to divulge the lowest price paid for a unit in the past 12 months when signing a new lease as a form of vacancy control. That piece of information is meant to be the peg from which reasonable increases in rent can be calculated.
I’ve been a renter in Quebec for over a decade and I don’t think I’ve ever received that information.
Most people don’t. When we were launching in Quebec, we did a study with Leger Marketing and found that eight out of 10 tenants didn’t know what their unit’s previous rent was. That’s because the system currently asks the person who has the most to gain from not providing this information to provide it. It’s like asking people to ticket themselves when they speed.
So how was the registry created?
In 2016, some entrepreneurial lawyers decided to start a citizens initiative rental registry, which was called MyRent.Quebec. I was hired around 2018 as director, but the tool was built with modest means, with no budget to reach all the tenants in Quebec. After I joined Vivre en Ville, we answered a call for data-driven ideas through the CMHC’s Housing Supply Challenge, a competition aimed at encouraging innovative solutions to address housing affordability issues. Using the MyRent.Quebec site as a proof of concept, we made it through all rounds of the challenge, and up to this day, we’ve received about $3 million in funding.
You commissioned a study by Angus Reid to coincide with the launch of the Ontario registry. What did you learn?
Tenants who moved last year saw their rent increase by 34 per cent. For tenants who moved in the last three years, rents went up by 29 per cent, so the upward trend is clear. What was most shocking, though, was that 20 per cent of Ontario tenants declared that they’ve experienced homelessness in the past. It’s something we sensed was happening, but now we’re able to say with a 1.6 per cent margin of error that it’s a reality.
You also commissioned a study of the Quebec market earlier this year. Did you learn anything comparing the two?
Critics of rent control, including the Quebec government, argue that rents in Quebec, somewhat stabilized by vacancy and price control, are too low to take care of buildings. But we found that 90 per cent of tenants and 92 per cent of landlords report that their buildings are in very good or fairly good condition. Compare that to Ontario, which has less price control. Fewer tenants—84 per cent—report that their buildings are in very good or fairly good condition. That means the increased revenue isn’t being reinvested in the building. Price control doesn’t lead to apartments of poor quality, and in the absence of price control, tenants pay more for a decrease in quality.
The rents are self-reported. How do you ensure the quality of the data?
We can’t really. We’ve set up the registry as it is for now to help people understand what a registry is and to show governments what it can do. But a rental registry is not something we think should be crowdsourced. It puts too much of a burden on individuals, and too much of a burden on the people managing the data. So we built this tool to governmental standards so it could be implemented by a government and populated in the future with administrative data, such as from tax returns.
Any interest so far?
The Quebec registry has been up for longer, and conversations there are productive. We’ve had two meetings with Quebec’s minister of housing twice, and have another one coming up. We also have the explicit support of 18 municipalities in Quebec, who could operate the registry if talks with higher governments fall through. The city of Montreal in particular has been considering a municipal rental registry for some time.
Have you received any pushback since launching?
CORPIQ and APQ—the two largest professional landlord associations in Quebec—have spoken out against the establishment of a rental registry. But we’ve seen a huge disconnect, across the country, between the progression of household revenues and the progression of housing prices. If we don’t do anything to slow down the appreciation of prices, every one of us, including landlords, will get poorer.
What’s the first, most pragmatic thing you’d like to see the government do with a registry like this?
I know this is toxic to a lot of elected officials, and maybe even some citizens, but price control. I don’t think there’s an easy or coherent way out of this without price control on rent.
Both Quebec and Ontario have some form of rent control—a limit on how much a landlord can increase the rent. Additionally, the Quebec rental market is currently somewhat stabilized thanks to lease assignments, or lease transfers, which allow renters to pass on their leases, along with their prices and protections, to the next renter (though a new bill could take that right away). In Ontario, rent control only applies to buildings built before November 2018.
As they stand, the Quebec and Ontario policies don’t protect the market from dramatic increases in prices, as revealed by both the Léger and Angus Reid polls. Part of the problem is that tenants will agree to any rent increase because they don’t have any other option—roughly a quarter of Ontario tenants and a third of Quebec tenants report having to accept any price imposed by their landlords. What’s more, there’s no real oversight of delinquent behaviour. For example, landlords regularly repossess units under the pretext that a family member is moving in, but we have no systematic way of making sure the repossessed units go to the intended party, and not just back on the market at the highest price the owner can get.
Until now. Are stronger rent control policies a realistic possibility?
A couple of weeks ago, a group of 32 economists wrote a memo to the White House saying that the economic case against rent control is ill-founded and out of date. It’s not simply supply and demand, and rent control doesn’t lead to less construction. What sets the pace for new construction is the rate of market absorption—you build units when you know you can sell them. In that memo, the economists put forward the idea that every mortgage that is federally insured by the government of the United States should mandate provisions for rental control. It’s not impossible that we might go this way.
>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : Macleans.ca – https://macleans.ca/economy/money-economy/see-your-neighbours-rent/
