There has been lots of debate about the Liberal-NDP alliance’s experiment with rent control in the Yukon. Now, two years in, we have some data to show how rent control is working.
Let’s look at two ways you might define success for rent control: keeping rent increases below inflation and increasing availability. Let’s define the latter as increasing the number of rental units faster than the population.
The data we have is from the Yukon Statistics Bureau, which just released its April 2023 rental report. We can compare that to April 2021, the month before rent control came into effect.
First, let’s review rent increases versus inflation.
Over the two years ending April 2023, the Consumer Price Index in Whitehorse went up 11.9 per cent in total (data for the whole Yukon is not available).
The bureau’s rental data reveals that over the two years ending in April 2023, median rent for all kinds of units across the Yukon increased 14.4 per cent. Within that, apartments went up 17.1 per cent, duplexes 12.1 per cent and single detached houses 19.5 per cent. Median condo rent went up much less, at 5.4 per cent.
Looking at Whitehorse specifically, the median rent for all units increased 15.4 per cent. Apartments went up 17.1 per cent, duplexes 14.3 per cent and single detached houses 13.3 per cent. Condos were up 4.8 per cent.
So, median rent for all units in the Yukon went up 14.4 per cent, more than overall inflation at 11.9 per cent. Rent control, so far, has not resulted in improved affordability. However, rent control advocates would argue that the situation might have been even worse without rent control.
These numbers are broadly consistent with other Statistics Canada data showing that “shelter” costs in Whitehorse went up by 14.7 per cent over the same period. This number is not exactly comparable, since it includes both rental units and the cost of owning a home.
The key development that kept a lid on median rents was a significant increase in Whitehorse condo rentals over the period. The number of condo rental units went from 178 in April 2021 to 255 two years later. Since median Whitehorse condo rents only went up 4.8 per cent, this suggests many of these were smaller and cheaper units.
Second, let’s look at availability.
Across the Yukon over that two-year period, the number of rental units went from 2,363 to 2,446, an increase of 3.5 per cent. Duplexes went up 6.8 per cent and condos were up significantly at 40.1 per cent as noted above. However, apartments actually went down 2.5 per cent as did single detached houses, whose supply shrank 7.6 per cent.
In Whitehorse, where the majority of the population growth occurred, the number of rental units rose from 2,217 to 2,304. This is a rise of 3.9 per cent. Duplexes went up 3.9 per cent and condos were up 43.3 per cent. Apartments went down 2.4 per cent and single detached houses were up 2.9 per cent.
The benchmark here is population growth. Statistics Canada releases data with a lag and not for all months, so we’ll use the closest two-year period for which data is available: July 2020 to July 2022. The Yukon population went up 3.9 per cent over that period.
So, the rental supply Yukon-wide grew slightly slower than population growth. The rent control experiment has not delivered improved supply.
Again, the growth in condo rentals was crucial. Excluding condos, all other kinds of rentals in Whitehorse grew by just 10 units or 0.5 per cent over the period.
There are a few questions we can’t answer with the bureau’s data. One is why the rental market now has fewer single family homes and apartments than two years ago, hardly what one would expect in a normal market responding to a shortage. Real estate circles are full of rumours of people with rental houses deciding to sell them because of rent control. There is also discussion of converting apartments to condos to sell instead of rent. A deeper, property-by-property analysis is needed to understand these trends.
Another question is what new tenants are paying compared to long-term renters. Existing renters enjoy rent-control protection and some very long-term renters may be enjoying rents considerably below the latest market rates. New arrivals to the Yukon must compete for the small number of vacant units.
The vacancy rate did improve, slightly, over the period. In Whitehorse, for example, it went from 1.7 percent in 2021 to two per cent in 2023. So rent control advocates can say that, even though rental supply did not keep pace with population growth, at least vacancy rates are slightly better.
The big question is what happens next. Two years is a short time in real estate. Since it takes so long to plan, permit and build a rental unit, it is likely that many units were already under construction before rent control was announced. Landlords would have continued these projects and brought them to market despite rent control. However, some say they have not initiated plans for any new units since rent control came in.
If true, this suggests the availability problem may get worse in the next few years, especially if the surge in new condo rentals slows down. Renters and landlords will be watching for the Yukon Statistics Bureau’s next report.
Keith Halliday is a Yukon economist, author of the Aurore of the Yukon youth adventure novels and co-host of the Klondike Gold Rush History podcast. He won the 2022 Canadian Community Newspaper Award for Outstanding Columnist.