lower-paying jobs nearby simply to avoid the necessity of moving. Thus,
a situation will arise in which existing tenants will hang on to
accommodation even if it is poorly suited to their needs, while individuals
and families who are newly entering the housing market will be unable to
find any rental accommodation except at black-market prices.
The province of Ontario instituted rent controls in 1975 and tightened
them on several subsequent occasions. The controls permitted significant
increases in rents only where these were needed to pass on cost
increases. As a result, the restrictive effects of rent controls were felt
mainly in areas where demand was increasing rapidly (as opposed to
areas where only costs were increasing rapidly).
During the 1990s, the population of Ontario grew substantially but the
stock of rental housing did not keep pace, partly because of the reduced
incentives to build new housing created by the rent controls. A shortage
developed in the rental-housing market and was especially acute in Metro
Toronto. This growing housing shortage led the Ontario government to
loosen rent controls in two ways. First, housing units built after 1991 were
exempted from rent controls. Second, landlords were permitted to
increase the rent as much as they saw fit but only as tenants vacated the
apartment. Not surprisingly, this policy had both critics and supporters.
Supporters argued that a loosening of controls would encourage the
construction of new apartments and thus help to reduce the housing
shortage. Critics argued that landlords would harass existing tenants,
forcing them to move out so that rents could be increased for incoming
tenants. (Indeed, this behaviour happened in rent-controlled New York