An Open Letter to Dave Jaworsky: Save My City, Say No to Rent Control

Dear Mr. Jaworsky,

I have been privileged to share our beautiful city with you for the last four years, starting when I moved here for school from Cambridge. Waterloo is my home, it is my city, and I want to see it flourish as much any other Waterloo resident. The people here, today, are here for an excellent cause. Many residents, and students especially, have fallen victim to landlords who do not provide what they promised to provide. There is no heat when they promise heat. There is no water when they promise water. Deposits go unreturned, and contracts unfulfilled. There is no doubt in my mind that these landlords are crooks, fraudsters, and con-men. I fear, however, that the exact same thing can be said about politicians.

I fear, Mr. Jaworsky, that the local politicians that have been given stewardship over my home, my city, Waterloo, are going to try and take advantage of these poor students who have already lost so much. They will take this as an opportunity to usurp more power unto themselves. How? They will try to pass local legislation in favour of rent control.

Rent control, although I’m sure you are already aware, Mr. Jaworsky, is a ceiling on the price that landlords can charge tenants to rent a residence. And tautologically, it is a ceiling on the price that tenants can offer to pay their landlords to rent a residence. To anyone who is unfamiliar with economics, this may sound like an excellent idea. “Surely, this will make housing cheaper for students,” they might say. And you may have to opportunity to present the idea in just such a way. You will look the hero, as if you’ve saved the day. But if you do implement rent control in my beautiful city, then nothing could be further from the truth.

Landlords, just like any other seller, have upward sloping supply curves and tenants, just like any other buyer, have downward sloping demand curves. What does this mean? Simply; when the price of rent is high, landlords will offer more places to rent and tenants will seek less places to rent. And, when the price of rent is low, landlords will offer less less places to rent and tenants will seek more places to rent.

Without a rent control, tenants and landlords are free to make their own contracts. A landlord can offer higher quality accommodations for a higher price and another can sell lower quality accommodations for a lower price. The tenants who wish to pursue each of these options, can do so freely. However, with the implementation of a rent control, landlords are no longer incentivized to provide higher quality housing. And of course, why would they? They cannot rent their apartments for a higher price, so why bother providing better accommodations.

But the problem does not stop there. Now, these tenants who originally would have been happy to pay the higher prices for the higher quality accommodations must now enter the housing market with those who were content with the lower quality housing. And further, tenants who had previously decided to stay at home, or to buy a residence, will now be enticed by the lower prices in housing rentals and enter the market as well. Where previously the price system had allowed tenants and landlords to coordinate their preferences for housing, this system of order, will be replaced with a system of chaos. Simply put, there will be too many tenants seeking a place to live, and too few landlords offering places to live. Now, students must fight tooth and nail to be the first agree to any lease. The system will be backed up with thousands of would-be tenants lined up just to get a chance to have a place to live in my beautiful city. These are the disastrous effects of rent control.

And the landlords? They will have no incentive to maintain or upgrade their residences. Why would they? There are now hundreds of tenants begging for a place to stay. If one tenant is not happy, they can easily replace them with another. Tenants will be told that they are “lucky” they got a place at all when so many are now battling it out for the underpriced housing. This is not what I want for my beautiful city.

I am no economic cook. While the economic profession is generally splintered, there is one topic which seems to have almost universal consensus: rent control. In a 2012 survey, 98% of economists believed that rent control in New York and San Francisco had not made living conditions any better. Paul Krugman, a Nobel Laureate with whom I share more differences than similarities writes,

The analysis of rent control is among the best-understood issues in all of economics, and — among economists, anyway — one of the least controversial. In 1992 a poll of the American Economic Association found 93 percent of its members agreeing that ”a ceiling on rents reduces the quality and quantity of housing.'”

Mr. Jaworski, I stand here begging you to listen to economic doctrine. Please save my city. Please do not let it become a place of chaos for those seeking only a place to live. Do not make it more difficult for people to come to my beautiful city; to share with us the incredible experiences that is Waterloo offers. I stand for my City, and I need you to aswell. Please, Mr. Jaworski, say no to rent control.

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