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Rent strikes in Toronto signal a broken rental housing market. Rent controls are the only option

Ricardo-TranjanA new study shows that if you are a minimum-wage worker looking for a place to rent, you’re out of luck. Pretty much anywhere in Canada.

The report, by the Canadian Centre for Policy Alternatives, of which I’m a co-author, calculated the “rental wage” for cities across the country. The rental wage is how much per hour workers need to earn to afford a rental unit without spending more than 30 percent of their total income on housing – the standard affordability threshold.

In every province, rental wages for one- and two-bedroom units are higher than the minimum wage. That’s also the case in 34 out of 37 urban centres.

In Vancouver and Toronto, even the combined income of two minimum-wage workers falls short of the one-bedroom rental wage.

rental housing crisis rent controls
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But tenants are not passively taking it on the chin. These past weeks brought news of three rent strikes in Toronto.

In the Weston neighbourhood, tenants in two separate buildings are standing up against what they consider excessive rent increases, despite financial statements showing that 50 percent of their landlord’s rental revenue is profit. The landlord in question is Dream Impact, an arm of Dream Unlimited, which owns properties across Canada.

To support the rent strike, some community groups that receive funding from Dream Impact are refusing donations, demanding that the firm live up to its stated community-focused and environment-friendly values.

In a recent rally at Weston, labour unions, community associations, and other neighbourhood residents joined with the striking tenants.

In the Thorncliffe Park neighbourhood, tenants in three buildings have been on a rent strike since May 1. These buildings are owned by PSP Investments – the federal public sector pension fund – and managed by Starlight Investments. Both corporations refused to negotiate. Eviction notices were issued, but striking tenants haven’t budged.

Recently, the Ontario region of the Public Service Alliance of Canada (PSAC) expressed support for Thorncliffe Park tenants. PSAC represents the federal public servants whose pension funds PSP Investments manages.

While organized tenants are taking action, political leaders continue to promise that more housing supply – somehow, someday – will set us free.

Conservative Leader Pierre Poilievre posted a video on social media where a worker says his rent is going up from $750 to $1,300 this month. The man asked, “What about putting something in for landlords that they can’t jack up the rent that much?” Poilievre replied that rents will only stabilize when Canada builds more homes.

The alternative answer – one that would work immediately – is called rent control.

The Liberal government’s National Housing Strategy has focused chiefly on providing incentives for developers to increase supply, with requirements that a small share of new units be rented at a discounted price for a limited time. Funding for non-market housing has been piecemeal. And the federal strategy has no measures to curb rent hikes.

NDP Leader Jagmeet Singh also talks about delivering the market-based initiatives the Liberals proposed, like GST and HST rebates to speed the construction of affordable homes. And while his more recent idea of a National Acquisition Fund to increase the stock of non-market housing is a good one, unless it is part of a comprehensive housing nationalization program, it can be yet another boutique program.

Increasing the supply of rental housing is necessary but insufficient to lower rents. Building and acquiring non-market rental housing is an effective solution, but it takes time.

What would immediately help priced out workers and striking tenants is strict rent controls. Provinces can implement them anytime. The federal government has done it in the past.

But enacting strict rent controls would require parties to take the side of tenants against landlords – something we haven’t seen these past weeks, or past many years.

Ricardo Tranjan is a political economist with the Canadian Centre for Policy Alternatives and author of The Tenant Class.

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