Recently we made a video criticizing some pervasive myths in the housing affordability
debate. One of these was that the source of the affordability problem is “property hoarders”
(individuals or corporations) owning multiple properties, which many people want to ban or
restrict. At first this sounds sensible. We advocate for the importance of housing supply,
and a person or company taking housing off the market must be bad.
The problem is that they’re not taking it off the market. In most cases they’re renting it out. We
want to call out the tendency people have to think that housing only “counts” if it’s owned. Having
rentals available is actually very important. It’s not practical or desirable for everyone to own.
This video struck a nerve. A lot of people understood us as saying they should give up their
desire to own and just be happy renting. That was not the point. Owning is a legitimate desire
and being able to own should be accessible to regular people.
We just don’t think this should be achieved by suppressing the private rental market, which is
really what you’re doing when you ban individuals or corporations from owning multiple properties.
If your concern is vacant units or Airbnb vacation rentals, apply a targeted policy
to those. Broad bans on (quote-unquote) “property hoarding” are bad for renters.
What lots of people thought we were missing is that most renters would prefer to own. This isn’t
exactly wrong but it’s not as simple as it seems. We currently rent and we’d probably like to own
at some point in the future. This doesn’t mean we want to own right now or that we want to own
our current apartment. We’re happy with it, but we don’t have any desire to tie our finances to it.
Even if we did want to own our current apartment right now,
there’s a good chance we couldn’t afford it if our landlord was forced to sell.
For us and lots of other renters, a law prohibiting “property hoarding” could just
mean eviction. Think about it like this: renters commonly fear the scenario where their landlord
sells or moves in. It’s why many people prefer purpose-built rentals over mom-and-pop landlords.
The last thing we should do is write laws forcing landlords to sell or move in!
The problem with big proposals to limit people or corporations from owning multiple properties
is that they’re so preoccupied with achieving more homes available to buy that they don’t think
through the consequences for renters. In a lot of these discussions it really seems that renters
just aren’t considered. When you actually try to make a law against “property hoarding” while
taking renters seriously, it gets complicated quickly. If the current renters want or need
to keep renting, would they be able to authorize their landlord to continue “property hoarding”?
If they want to own, do we force the landlord to sell to them at a cost they can afford,
regardless of other offers? Maybe we only ban landlords from buying new properties.
Better, but it just kicks the problem of rental availability down the road.
This discourse on banning “property hoarding” actually comes at the same time that municipal,
provincial, and federal authorities are all using incentives to encourage the construction
of more purpose-built rental housing because many cities just haven’t built very much of it in the
past few decades. [“Experts say Canada needs to build a lot more housing meant only for rentals,
and fast. The government has a big role to play, they can incentivize investors and builders into
this market.”] Far from seeing rentals as an exploitative plague to be wiped out,
they recognize that stable rentals are an important part of making housing accessible,
especially to people who need flexibility to move or who can’t afford a downpayment.
Research on “rental deserts” backs this up. Places without rental options don’t “save
people from exploitation from landlords”, they effectively exclude lower-income households from
living there at all. If your compromise is to only ban rentals for single-family homes,
consider that most land in most North American cities is zoned to only allow
single-family homes. Do we really want to turn this into an official ban on renters?
Advocates of banning or restricting the private rental market often say that switching homes
over to the buying market will temper prices and make buying more accessible, and it might just
do that for people who are on the verge of being able to buy, but that’s not everyone. There are
lots of people further down the purchasing power spectrum who would be left out in the cold. The
price to buy a home could drop by half or even more and it still wouldn’t mean that everyone
could or should own their own home. Making Toronto as affordable as Edmonton or Winnipeg,
which would be an absolute miracle, wouldn’t eliminate the need for rentals in Toronto. We
know this because lots of people in Edmonton and Winnipeg still rent — about a third of households.
The reason our video struck a nerve is that lots of people feel frustrated and powerless seeing
the housing market go absolutely bonkers and feeling the option of homeownership
slipping away. We understand! We spend much of our free time making videos about housing
affordability — no one can reasonably accuse us of not caring. And maybe there are some small
tweaks we can make to tilt the scales towards first time buyers without harming renters.
But fundamentally the most productive way to make homeownership more accessible is by building more
housing, expanding the pie, instead of throwing renters under the bus by suppressing rentals
and imagining an unrealistic scenario where no one has any reason to rent housing.
In arguing for the existence of a private rental market, we’re sometimes accused of “defending
landlords”. Not at all—we care about renters and our policy suggestions come from that.
Landlords can have a lot of power over people and it makes sense to regulate abusive behaviour and
protect tenants from that, but none of this takes us in the direction of restricting the number of
rentals available. That doesn’t protect tenants, it makes them compete with each other. When you
go to view an apartment and you see that there are lots of other people interested in the same place,
that’s bad news. [“In Halifax the vacancy rate is less than 1%. And stiff competition is putting
unfair pressures on applicants.”] It puts the landlord in a position to demand more money
and set more conditions — no pets, no children, two incomes over one, list your bank accounts,
give your social insurance number, pay many months of rent up front. You can make some of these
onerous demands illegal (if they aren’t already), but when landlords have scarcity on their side,
they can get away with a lot. You can’t spell scarcity without scary. [“In Halifax the vacancy
rate is LESS THAN 1%.”] Finding a place to rent shouldn’t be like interviewing for a job,
but that’s what happens in expensive cities with tight rental markets.
Some people in the other video accused us of forgetting that non-profit models for renting
also exist. We didn’t forget this — we rented in a non-profit housing co-op before and liked it
a lot. We absolutely should fund and build more housing like this to give renters more options.
But we shouldn’t ban private rentals with the promise that non-profit housing will definitely,
probably, maybe make up for it later. Hope is not a plan. Build non-profit housing first and
then maybe there will be less demand and need for private rentals later. If our concern with
landlords is broader wealth inequality and concentration of wealth among landowners,
that’s understandable. We should target that more directly and efficiently in our tax system.
Thanks for watching through to the end of the video. Don’t forget that renters exist…and
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