NAVARRO-GENIE: Rent controls don’t fix housing shortages. They make them worse
By Marco Navarro-Genie
Jan 17, 2026
Canada keeps trying to regulate its way out of a housing shortage. Argentina tried something else, and the rental market improved.
Housing availability in Canada has reached crisis levels. In Vancouver, the average two-bedroom apartment rents for $3,170 monthly. In Toronto, it’s $2,690. By October 2024, Toronto counted more than 15,400 homeless individuals—double the figure from 2021. Vancouver’s streets tell a similar story of policy failure.
Yet despite decades of government intervention through rent controls and affordability programs, the crisis deepens year after year.
Meanwhile, Argentina achieved something remarkable. After repealing rent control in December 2023, rental supply surged by more than 200 per cent within eighteen months, while real prices fell approximately 40 per cent. The contrast offers vital lessons for Canadian policymakers.
Much of Canada’s response to housing unaffordability has centred on price controls rather than expanding supply. Ontario caps annual rent increases at 2.5 per cent for units built before November 2018. British Columbia froze rents entirely in 2020 and 2021, then allowed increases of just 1.5 per cent in 2022 and 2 per cent in 2023—well below inflation, which exceeded 6 per cent.
Manitoba followed the same playbook, freezing rents at zero per cent in 2022 and 2023, allowing just 3 per cent in 2024 and 1.7 per cent for 2025. Yet Winnipeg has emerged as one of Canada’s hottest rental markets, with vacancy rates stubbornly low despite new construction. The lesson? Price controls don’t create housing.
Manitoba at least recognized the supply problem: buildings constructed after March 2005 are exempt from rent control for 20 years, and the province recently reinstated construction tax credits of up to $13,500 per unit. These incentives acknowledge what pure rent control advocates refuse to admit: you must make rental construction profitable to get rental construction.
The economic logic proves inexorable. When the government fixes rental prices below market-clearing levels, returns on rental housing decline. Developers shift capital elsewhere. Rental construction stops. Supply stagnates while population grows.
Argentina’s experience shows another way. When Javier Milei became president in December 2023, Argentina’s rental market was in crisis. The 2020 Rental Law imposed strict price controls, mandated three-year leases, and required payments in inflation-ravaged pesos. Landlords responded predictably: they withdrew units from the market. By late 2023, roughly one in seven homes in Buenos Aires sat empty.
Milei’s solution was radical simplicity: he repealed the law entirely.
By June 2024, rental listings had increased 184 per cent. Real rental prices, adjusted for Argentina’s substantial inflation, fell approximately 40 per cent. When landlords could operate profitably again, vacant units flooded the market. Competition drove real prices down.
The Argentine experience doesn’t translate perfectly to Canadian conditions. Argentina’s crisis stemmed from recent regulations easily reversed. Canada’s supply shortage reflects decades of accumulated policy failures, restrictive zoning, and systematic underinvestment.
Yet the fundamental lesson remains valid: you cannot regulate your way out of a supply shortage. Rent controls systematically discourage private construction, which could solve the affordability crisis. Virtually every mainstream economic analysis confirms this. Argentina confirms it yet again.
Manitoba is ahead of Ontario and B.C. in recognizing supply matters; hence the 20-year exemption for new builds. But Argentina proved that half-measures deliver half-results. Full deregulation delivered a 40 per cent real rent reduction.
Canada needs a surge in housing supply, not more elaborate controls. That means aggressive upzoning, provincial override of municipal obstructionism, and accepting that rental returns must attract private capital to construction.
Argentina achieved a 40 per cent decline in real rents within eighteen months. Canadian rental crises deepen despite decades of intervention. Argentina trusted markets and got affordable housing. Canada trusts regulations and gets tent cities.
Marco Navarro-Genie is vice-president of research at the Frontier Centre for Public Policy and co-author, with Barry Cooper, of Canada’s COVID: The Story of a Pandemic Moral Panic (2023).
https://www.winnipegsun.com/opinion/canadas-housing-crisis-moves-beyond-rent-control-measures/article_5ce5d9dc-a258-4e33-b9fa-c1c55594c2c1.html
