On November 2, 1985, a seminar entitled The Future of Rent Controls in Ontario was sponsored by Landlords Against Rent Control in Toronto. Representatives of five provincially-registered political parties participated, with each giving a half-hour presentation on their perspective on rent control.
Keynote speaker for the event was the Fraser Institutes's senior economist, Dr. Walter Block.
Speakers included the Government of Ontario's Deputy Minister, Ministry of Housing, Gardner Church; Progressive conservative Housing Critic Margaret Marland; the NDP's Housing Critic Ross McClellan; Chairman of the Ontario Libertarian Party, Bob Cumming; and of course, Freedom Party president, Robert Metz.
The presentation is also available in Fp's Publications and Literature section on this Website.
Following is the presentation given by Mr. Metz on behalf of Freedom Party:
If I had been asked to predict the future of rent controls in Ontario way back in 1975 (when they were imposed), I might have been tempted to say that rent controls were only a temporary measure, and would be repealed by 1977. After all, my prediction would not have been made merely on the basis of some ability to determine future events, but upon an explicit promise made by the government at that time.
Needless to say, my prediction would have been quite wrong.
Thus, predicting the future has not been, and is not now, one of my favorite passtimes. Even when promises have been made (and to me a promise is a commitment), predicting the future has been at best, a dubious undertaking --- and indeed, many promises have been made.
It is now ten years later and rent controls are still with us. By now, I hope you all know a little something about the nature of political promises. If you didn't know in 1975, then you should certainly be much wiser in 1985.
You may well imagine my disbelief when, only a few short weeks ago, I heard a news story on the radio featuring Housing Minister Alvin Curling's announcement "that rent controls could be eliminated as early as next year." My disbelief lasted less than a fraction of a second, however, when the sentence was concluded by the disclaimer "...if adequate affordable housing is available by that time."
"Adequate," in Mr. Curling's opinion, apparently represents a rental vacancy rate of 3% or better, and until that rate is achieved, his government would proceed to implement even stricter rent controls by acting immediately to reduce the legally allowable rent increase from 6% to 4%!
By placing effect before cause, the provincial Liberal government has not only "put the cart before the horse,"but has aggravated matters by "burning the cart" and "shooting the horse"! It has been clearly demonstrated that its intention in the issue of rent control is to appear to be playing both sides of the fence while actually catering to the side with the greatest political potential (i.e., votes).
In fact, proclamations alluding to the possibility that rent controls could be eliminated as early as next year, while simultaneously promising to retain and strengthen rent controls until the vacancy rate reaches an acceptable level, are proclamations that do little more than to help confuse the issue. On the one hand, the government is creating a false hope for landlords in creating the version of a future without rent controls; on the other hand, it is directly apealing to the perceived interests of tenants, for the simple reason that there are more of them, which in turn, means more potential votes.
Unfortunately, neither tenants or landlords are having their best interest served through the existence of rent controls because the only real interest being served is ultimately a political one.
Make no mistake about it! Rent controls are a political invention created to serve political interests and they exist for no other reason whatever.
A failure to understand this principle will in turn lead to a failure in one's ability to fight and defeat rent controls --- along with the host of increasing interventions made by governments in their haste to invariably do the wrong thing with the best of intentions. It is a process --- to be precise, a political process --- that hurts everyone involved. In addition to landlords and tenants, you can add homeowners, builders, taxpayers, consumers, producers, and many others to the list of victims adversely affected by rent controls.
So if you really want to know what the future of rent controls will be in this province, then you'll have to base your prediction upon your past experience with the actions of governments --- not of landlords, and not of tenants.
The future of rent controls in Ontario is entirely dependent upon the future of politics in Ontario, and there is no escaping that fact.
Rent controls didn't come into existence just by accident, or as some inevitable consequence of ecomonic or social circumstances. They arose most directly as a consequence of a currently practised political doctrine that asserts any "majority" may do whatever it likes to any "minority."
As a result of this doctrine, we find ourselves living in what is commonly referred to as a "mixed economy," meaning an economy in which individual freedoms are "mixed" with government controls. Unfortunately, in a mixed economy, there are no consistent principles, rules, or theories available to justify or define the limits of either our freedoms of the controls that may be imposed upon us. The only measuring stick available to us in this regard is the never reliable "majority rule" of thumb, and if you happen to be unfortunate enough to be in a minority on a particular issue, then don't count on any guarantees of your rights remaining protected.
What's the inevitable result of a "majority rule, mixed economy" philosophy? --- a society ruled by pressure groups. And when governments start giving in to pressure groups, they begin to serve political interests and cease to protest individual rights.
Rent controls exist for the simple reason that we, as citizens, allow our governments to cater to special interest groups and to violate individual rights.
Rent controls, like all government imposed controls, breed unnecessary conflict. Because they exist, there is now a direct political conflict between landlords and tenants that otherwise would not be present. By creating misleading and irrelevant issues like "affordable housing" (or some such variant), politicians have managed to create a conflict that does not, and should not exist in the sense that we have come to understand it today.
For example, many tenants have been led to believe that their "adversary" in the rental accomodation marketplace is the landlord, but this is an entirely false notion. The real "adversaries" in the accomodation marketplace are other tenants who are willing to pay more than they are for the same benefit.
Similarly, under normal free market conditions, landlords would compete with other landlords to provide "affordable housing" and they wouldn't be forced to unite to defend themselves by having to launch a common political and legal effort to protect their right to their own property.
That's the basic problem with controls. By their very nature, they breed artificial conflicts. Suddenly, tenants are fighting with landlords, when in reality it is other tenants that they are competing with for that increasingly elusive "affordable housing."
Consider the nature of many of the "conflicts" that face Canadians today. Under rent controls, we have seen how tenants and landlords have been forced into a political conflict with each other, and how landlords have been forced to subsidize tenants. But the process doesn't just end with rent controls.
For example, under the guise of "official bilingualism," we have an ever increasing conflict developing between French and English speaking people, in which one culture is being forced to subsidize another. Under the guise of "full funding in education," we have separate school factions in conflict with public school advocates, where each side is being forced to subsidize the other. And who ever heard of "metric" versus "imperial" before our governments got in on the action?
Such is the current state of politics in Ontario today. And it's becoming very clear what the future of politics will be like in Ontario.
Expect more controls. Expect more conflict.
Some of the words and terms necessary to explain what is politically happening in Ontario today (and in much of the world, for that matter) may leave us feeling a bit uncomfortable. But I personally cannot escape the conclusion that right now, Ontario is aimlesly drifting into a gradual state of economic and social dictatorship. That's right --- a dictatorship.
I realize that, to some, this may seem to be a startling or even an offensive observation to publicly make. But I caution you to never allow ignorance or fear of the truth to be the basis of your surprise or offence. If you're going to be offended at all, be offended by the fact that what I have to say is the reality of the situation, and not by the nature of the extreme terms I may use.
For example, rent controls are specifically a fascist measure, and we should never be afraid to use that term to describe them; it is accurate and it has a very clear meaning and effect. (Ironically, rent controls were an offshoot of the federal government's wage and price control package, imposed in 1975 by Trudeau's socialist Liberals.)
Both socialism and fascism involve the destruction of property rights. Having a right to property means having the right of its use and disposal. Whereas socialism seeks to negate private property rights altogether, through the "vesting of ownership and control in the community as a whole," --- which, of course, means the state --- fascism leaves ownership in the hands of private individuals, but transfers control of the property to the government. Sound familiar? It should. This is the political reality behind the existence of rent controls.
Being allowed to "own" something without being allowed to ultimately control it is a contradiction in terms. It creates a situation where citizens end up retaining the responsibility of holding property without having any of its advantages, while the government acquires all the advantages without having any of the responsibility.
Ontario is rapidly becoming a state-controlled society, and Ontarians, like most who have fallen victim to the effects of state imposed restrictions, are becoming politically impotent in their ability to reverse the trend.
One of the reasons I've introduced terms like socialism, fascism, or dictatorship to the discussion of rent controls is to give you some ammunition to use in the psychological war of intimidation that surrounds issues of state control.
For example, if, as landlords, you find yourselves inhibited from using a term like fascist to describe a situation where your property rights are being blatantly violated (especially when it's the correct term), then what words do you have left to enable you to defend your rights? And how will you ever be able to protect your rights if you don't even recognize the nature of the political system that is eroding them away at an ever increasing pace?
Remember that those who are after your rights and your property have done an excellent job of intimidating you through the use of language. In fact, they've even created entirely false issues that you find yourselves fighting needlessly against, and which deflect everyone's attention from the real issue at hand: your rights.
One of these issues is expressed in the term "affordable housing." In the political world of rent controls, "affordable housing" is a highly misleading and manipulative term. If you, as landlords, continue to use it, it will only serve to psychologically and morally undermine your efforts to defeat rent controls and to protect your property rights. After all, the government claims that rent controls are a measure to provide "affordable housing." Thus, when landlords decide to fight rent controls, it is already implied that somehow they oppose the concept of housing that is affordable!
You're beat before you start --- and on an issue that's not the issue!
Don't be afraid to tell it like it is! Rent control is nothing more that the forced subsidization of one interest group by another. It is a fascist scheme aimed at a very distinct and identifiable group in society --- landlords and property owners.
Another popular technique of intimidation is the charge that landlords are "greedy" or "selfish" when they ask for rents that some people cannot afford. But always remember that those who accuse you of being "greedy" or "selfish" are merely acting in the interest of someone else's "greed" and "selfishness."
Ask yourself a simple question: Which is the greater form of "greed"? The action of a landlord taken in the operation and maintenance of his own property with his own money, or that of governments and tenants who, seeing the product of the landlord's efforts, demand access to it on terms not suitable to the owner of that property?
Yet another extension of the intimidation tactic based on "greed" is the charge of earning a profit. Those who believe that profits are "evil" are suffering from the misconception that the profit of one person necessitates a loss to another. But this is only true if the government is involved in the transaction. As we can clearly see, under rent controls, tenants reap an immediate short-term "profit" at the "expense" of the landlord.
However, in a free market (in which all economic and social transactions are voluntary), a profit to one person in a transaction always means a profit for the other --- otherwise the transaction would never take place!
All of these words and terms ("greed", "selfishness", "profit", "affordable housing") are used in an effort to denigrate your motives for being in the business of providing rental accomodation and to intimidate you into not taking action to defend yourselves. It's up to you to make a point of using the proper terms and adjectives to describe the government's actions. Intimidate them for a change.
Let the government know that what it's doing with rent control is wrong.
Freedom Party totally opposes rent controls.
As a political party believing that the foundation of personal liberty and choice is the concept of private property and the right to fully exercise ownership of such property, we have no choice but to condemn rent controls on both practical and moral grounds. Rent controls are objectional in practice because they do not work; they are morally reprehensible because they violate individual rights.
Rent control is blatant discrimination against the landlord. It pervents landlords from exercising their right to the fair market value (which is, ironically, determined by tenants) of the service they provide. It forces landlords to give an unearned and unagreed to benefit to tenants, without recompense. It limits landlords' income, but not their costs. It reduces the value of their property, and it erodes their right to property.
The right to keep, use, buy, sell, mortgage, rent, give away, leave to heirs, etc., are just some of the numerous aspects associated with the right to own property. All these aspects of ownership are now under attack by our governments.
We live in an environment where, if the government wants your property, all it has to do is pass a law.
When landlords lose their right to exercise control over their own properties, we all lose, because our acceptance of discrimination against one particular group of individuals merely sets the stage for another group of individuals to be exploited for political gain.
Freedom Party will do anything it can, and use its influence in any way it can, to fight rent controls. As young a party as we are, we are nevertheless the only alternative available on the issue of rent controls.
I realize that many people may be reluctant to support a new political party because they perceive that it has a much longer way to go before it can share the degree of influence shared by the parties in power. But let me ask you this: Wouldn't you rather be supporting a party that has a longer way to go --- but knows where it's going --- than support and subsidize parties that simply drift in circles and consistently make matters worse?
Where's the future in that?
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last updated on April 28, 2002
