A look at the real data from Ontario, New York, Montreal and Vancouver, and what it says about supply, vacant units, and who actually wins.
Ask a tenant facing an N1 whether rent control is a good thing for tenants, and the answer is obvious. Landlords are generally not nice people and they need to be controlled etc.. etc... . Then ask an economist what they think. The answer becomes a lot less clear with lots of questions to the question: Which tenants? When do you mean today, tomorrow or in 10 years?
Then ask each of them about the benefit to society in general? While most of us - tenants and economists as well- want what is best for our society, the question of whether rent control is "good" or "bad" full stop becomes more complicated when move from simply looking only at landlords and tenants and move to a broader scope. To complicated matters further, the question, especially when discussed in the media, is often shaped as a moral rather than economic question.
The goal here is to look at data from across North America and see what it says.
Is rent control good for society in the long run or not?
Spoiler alert.. it depends.
How rent control actually works in Ontario
Before we begin, the first thing we need to understand is that “rent control” in 2026 is not the rent freeze previous generations in Ontario and elsewhere argued about. It's a control not a freeze. Ontario runs what economists call a "second-generation" system, and the design and details are important.
Every year the province publishes a rent increase guideline, tied to the Ontario Consumer Price Index and have been capped at 2.5 percent since 2020. A landlord can raise a sitting tenant’s rent by that much, once every 12 months, with 90 days’ notice. Here is the recent run of guidelines.
But two design choices change everything. First, the November 15, 2018 exemption: any unit first occupied after that date is exempt from the guideline entirely. The Ford government’s stated logic was to stop discouraging new rental construction. Second, and older, is vacancy decontrol: when a tenant moves out, the rent resets to whatever the market will bear. Ontario has had this since 1998. The cap protects you only while you stay put.
The economist consensus, and why it isn’t the whole story
Among professional economists, rent control is close to a settled question, and the verdict is skeptical. When the University of Chicago’s IGM Forum surveyed a panel of leading economists, almost none agreed that rent control had improved the amount and quality of affordable housing.
Ask 5 economists one question and you will get 6 answers - except here. That near-unanimity is real and worth respecting. This fact has widely been reported and is often used by those against rent controls. But it is also frequently misused. The poll asks about housing supply and quality, not about whether rent control helps the specific tenants it covers. As Stanford economist Rebecca Diamond, whose work is the most cited in this whole debate, puts it: the disagreement among economists is “about cost, not whether the benefit exists.” Rent control genuinely helps the people it covers. The question is what it does to everyone else, and to the housing stock, over time.
Fair enough so let's broaden the field of view.
The supply question: the heart of the argument
If rent control has one definitive long-run and most often used argument against it, it is that it tends to shrink the supply of rental housing. This argument is pretty is intuitive:
If the return on a rental building is capped while costs are not, owners build fewer of them, convert existing ones to condos they can sell at market, and let aging stock decay.
A great example in support of this comes from San Francisco. Stanford University published a great paper on this in 2019, (Diamond, McQuade and Qian’s 2019 study in the American Economic Review ) where they tracked what happened when the city expanded rent control to a whole bunch of older buildings. Landlords responded.
The headline number that gets quoted everywhere: rent control caused roughly a 15 percent reduction in the rental housing supply of affected buildings, as owners converted to condos or redeveloped. The authors concluded the lost supply likely pushed up market rents across the whole city, partly cancelling out the help given to protected tenants. In other words, the policy made the city as a whole more expensive for the next renter through the door.
That last part is important to remember.
The flip side of that coin is Cambridge, Massachusetts, which abolished rent control in 1995. Autor, Palmer and Pathak’s study in the Journal of Political Economy found that ending control unleashed investment: permitted building expenditure roughly doubled, and property values rose sharply, including for buildings that were never controlled in the first place.
Where Canada’s own data complicates the story
Here is the part that rarely survives a heated argument. CMHC, Canada’s federal housing agency, ran the regressions on Canadian cities and could not find a clear effect of rent control on new rental construction. Their 2020 research called the supply effect “inconclusive” in the Canadian data, precisely because modern regimes exempt new builds. Their 2025 literature review, covering 49 studies, reached a careful split verdict: rent control reliably shrinks the existing stock through conversions, but “the impact on new construction is less clear.”
You can see the ambiguity in Toronto’s own building numbers. When the 2018 exemption removed controls from new projects, the purpose-built rental pipeline did surge. Then it stalled, and CMHC attributed the 2024 slowdown not to rent control but to high financing costs and falling asking rents in its Housing Supply Reports.
The fair reading: the strong supply-destruction findings are real, but they come from older-style regimes covering existing buildings. Ontario’s new-build exemption is a deliberate attempt to dodge exactly that problem, and the Canadian data suggests it may partly work. What rent control, in Ontario, does most reliably is not stop new towers from rising; it is encourage the existing stock to convert, decay, or leave the rental pool.
The insider-outsider divide: the turnover gap
If you want the single most revealing number in Canadian rent data, it is the gap between what a sitting tenant pays and what the next tenant pays for the same kind of unit. Vacancy decontrol creates this gap mechanically, and CMHC’s rental market data shows it has grown enormous. The Canadian Centre for Policy Alternatives, tabulating that same CMHC microdata, pegged the average Toronto turnover increase at 40.4 percent (a pro-tenant group, flagged, but the numbers are CMHC’s).
This is the policy working exactly as designed, and it is also the policy’s deepest flaw. The longer you stay, the better your deal gets, and the further it drifts below market. That is a genuine, valuable protection for the person sitting in the unit. But it has three not so great side effects depending on how you look at it:
- First, it punishes anyone who has to move. A young family, a worker relocating for a job, a newcomer to the country: they all face the unprotected market rent, which is inflated partly because incumbents are locked in place and not freeing up units. Economists call this the insider-outsider problem, and the outsiders tend to be younger, poorer, and more mobile.
- Second, it freezes people in the wrong homes. Empty-nesters stay in three-bedroom apartments because giving up a controlled rent is too costly, while families squeeze into studios. The technical term is misallocation, and it means the existing housing gets used less efficiently than it should.
- Third, the size of that gap is precisely what tempts a landlord to get a unit vacated. Which can lead to all sorts of shenanigans and questionable actions.
Four cities, four experiments
One reason this debate never resolves is that “rent control” means very different things in different places. Comparing four cities side by side shows how much the design choices matter.
The contrast that matters most is New York versus the Canadian cities. After 2019, New York abolished vacancy decontrol, making stabilization effectively permanent and sharply limiting what landlords could recover from renovations. Toronto and Vancouver kept vacancy decontrol. Montreal sits in between, relying on a quirky tenant-to-tenant lease-transfer tradition that kept its rents famously low, until a 2024 law (Quebec’s Bill 31) made it easier for landlords to refuse those transfers.
Vacancy rates tell you how tight each market is right now. Below the surface, all four have the same affordable-end squeeze: the cheapest units have almost no vacancy anywhere.
New York’s 1.4 percent in 2023 was its lowest reading since 1968. Notice that NYC, the city with the strictest regime and no vacancy decontrol, has the tightest market. now in fairness, that is not 100% proof rent control caused the shortage, since New York famously has simple structural supply constraints of its own. But it is a caution against the idea that stronger controls relax a market. They generally do not.
Rents still rose, control or not
The other important lesson across all four cities: rent control did not stop rents from climbing. It slowed the increases for people who stayed put, and shifted the increases onto turnover and new supply. Toronto’s average two-bedroom rent rose about 25 percent in five years even with the cap in place.
The benefits are real too: stability and displacement
It would be dishonest to spend this much time on the costs and wave away the benefits, because the benefits are genuine, measurable, and concentrated on vulnerable people. The same San Francisco study that found a 15 percent supply loss also found that rent control delivered exactly what its supporters promise: protected tenants were roughly 20 percent less likely to have moved 5 to 10 years later, with the strongest effects for older, long-tenured, and minority households, the groups facing the most displacement pressure. Much of that reduced moving was people who would otherwise have left San Francisco entirely.
This is the case for rent control stated at full strength. For a tenant with deep roots, a job nearby, kids in the local school, and family down the street, the ability to stay is worth a great deal. They cannot self-insure against a sudden rent spike by moving to a cheaper city the way a young, mobile renter can. Rent control is, in effect, insurance against displacement, and it pays out most to the people who can least absorb the shock. Diamond, the economist most associated with the skeptical supply findings, says plainly that this benefit is real and that society may legitimately want to provide it.
The panel below is the fairest summary of the whole debate. Rent control is not good or bad in the abstract. It is a transfer, and you can see who is on each side of it.
Diamond’s own conclusion, and the closest thing to a mainstream economist’s position, is not “abolish it.” It is that if the goal is to insure vulnerable tenants against displacement, a direct subsidy or tax credit could deliver the same protection without choking supply. Rent control achieves a real social good through a leaky, distortionary mechanism.
First-generation versus second-generation
One last distinction that cuts through a lot of noise. Economists separate first-generation rent control, the hard freezes applied to all units including new ones, from second-generation systems like Ontario’s, with percentage caps, new-build exemptions, and vacancy decontrol. Even rent control’s academic critics concede the modern designs are far less damaging than the old freezes. The new-build exemption in particular is the single most important feature for protecting future supply. The catch, shown clearly by San Francisco, is that wherever the rules still cover the existing stock, the conversion and misallocation effects show up anyway.
So... is rent control better or worse for tenants?
The evidence does not support a slogan in either direction, so here is the honest version.
For the specific tenant it covers, rent control is better, clearly and measurably. It delivers lower rents, stability, and real protection from displacement, and it helps the vulnerable most. That benefit is not a myth, and the people who dismiss it are ignoring good evidence.
For tenants as a whole, over the long run, the picture turns negative, but less dramatically than critics claim. The reliable harms are a shrinking and decaying existing rental stock through conversions, a large insider-outsider gap that punishes anyone who has to move, and misallocation that wastes the housing we have. The most-cited supply-destruction numbers come from older American regimes that covered existing buildings, and CMHC’s own Canadian data on new construction is genuinely inconclusive, because the new-build exemption is designed to dodge that exact problem.
The deepest issue is targeting, not intent. Rent control helps a real and sympathetic group, but it does so by quietly taxing future renters and newcomers, who are often younger and poorer than the tenants being protected. It treats the symptom, high rents, while leaving the disease, too little housing, untouched. As the Bank of Canada and CMHC both stress, the durable fix for affordability is building far more housing, including purpose-built rental, alongside targeted protections for the tenants most at risk of displacement.
Put simply: rent control is a good deal if you already have the apartment, a worse deal if you are looking for one, and no substitute for building more.
Terry Riddoch
If you would like to talk through how any of this applies to a building you own or one you are considering, I am always happy to walk through the numbers.
Terry Riddoch
Real Estate Broker -- Multifamily and Investment Properties, Ontario
Phone: 519 591 1725
Email: [email protected]
Web: terryriddoch.ca
Sources
All figures are drawn from the sources below. Where a source has a financial or political stake, it is flagged in the text. Government statistical agencies and peer-reviewed studies are weighted most heavily.
- Government of Ontario, Ministry of Municipal Affairs and Housing. “Residential rent increases.” https://www.ontario.ca/page/residential-rent-increases
- Rental Market Reports (Fall 2024, 2025) and Housing Market Information Portal. https://www.cmhc-schl.gc.ca/professionals/housing-markets-data-and-research/market-reports/rental-market-reports-major-centres
- “Rent Control and the Affordability of Rental Housing in Canada” (2025 literature review of 49 studies). https://assets.cmhc-schl.gc.ca/sites/cmhc/professional/housing-markets-data-and-research/housing-research/research-reports/2025/rent-control-affordability-of-rental-housing-canada-en.pdf
- “Impact of Rent Control on Housing Affordability” Research Insight (2020). https://assets.cmhc-schl.gc.ca/sites/cmhc/data-research/publications-reports/research-insight/2020/research-insight-impact-rent-control-housing-affordability-69677-en.pdf
- Housing Supply Reports (Spring/Fall 2024). https://www.cmhc-schl.gc.ca/professionals/housing-markets-data-and-research/market-reports/housing-supply-report
- Diamond, McQuade & Qian. “The Effects of Rent Control Expansion on Tenants, Landlords, and Inequality.” American Economic Review 109(9), 2019. https://www.aeaweb.org/articles?id=10.1257/aer.20181289
- Autor, Palmer & Pathak. “Housing Market Spillovers: Evidence from the End of Rent Control in Cambridge, Massachusetts.” Journal of Political Economy 122(3), 2014. https://www.journals.uchicago.edu/doi/10.1086/675536
- Rebecca Diamond. “What does economic evidence tell us about the effects of rent control?” Brookings Institution. https://www.brookings.edu/articles/what-does-economic-evidence-tell-us-about-the-effects-of-rent-control/
- IGM Forum / Kent A. Clark Center, University of Chicago Booth. Economist panel survey on rent control. https://kentclarkcenter.org/surveys/rent-control/
- Federal Reserve Bank of St. Louis. Hogan & Owyang, “What Are the Long-run Trade-offs of Rent-Control Policies?” (2024). https://www.stlouisfed.org/on-the-economy/2024/feb/what-are-long-run-trade-offs-rent-control-policies
- NYC Housing and Vacancy Survey (U.S. Census Bureau for NYC HPD), 2021 and 2023. https://www.nyc.gov/assets/hpd/downloads/pdfs/about/2023-nychvs-selected-initial-findings.pdf
- NYC Comptroller. “Accurately Assessing and Effectively Addressing Vacancies in NYC’s Rent Stabilized Housing Stock.” https://comptroller.nyc.gov/reports/accurately-assessing-and-effectively-addressing-vacancies-in-nycs-rent-stabilized-housing-stock/
- NYU Furman Center. “Profile of Rent-Stabilized Units and Tenants in New York City.” https://furmancenter.org/research/publication/profile-of-rent-stabilized-units-and-tenants-in-new-york-city
- Government of Quebec / Tribunal administratif du logement; National Assembly Bill 31 (2024). https://www.quebec.ca/en/housing-territory/renting/rights-and-obligations-of-the-lessor-and-lessee
- Government of British Columbia. Rent increase caps and 2018 Rental Housing Task Force. https://www2.gov.bc.ca/gov/content/housing-tenancy/residential-tenancies/rent-rtb/rent-increases
- BILD / FRPO / Urbanation. “Purpose-Built Rental Housing in the GTA” whitepaper (2023). Note: builder and landlord groups; built on CMHC data. https://www.bildgta.ca/wp-content/uploads/2023/02/Purpose-Built-Rental-Whitepaper-FINAL.pdf
- Canadian Centre for Policy Alternatives, Ontario. “Rent control in Ontario is full of loopholes” (2024). Note: progressive, pro-tenant; uses CMHC microdata. https://www.policyalternatives.ca/news-research/rent-control-in-ontario-is-full-of-loopholes/
- McGill University UPGo (Wachsmuth et al.). Short-term rental impact estimates for Toronto and Ontario. https://upgo.lab.mcgill.ca/publication/ontario-str-2024/Wachsmuth_Ontario_STR_2024.pdf
- Lawrence B. Smith. “An economic assessment of rent controls: The Ontario experience.” Journal of Real Estate Finance and Economics 1(3), 1988. https://link.springer.com/article/10.1007/BF00658918
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