Thank-You, Captain Obvious

Whoever writes the headlines at Jacobin needs some remedial education, because the headline, "Landlords Are One of the Leading Causes of Canada’s Rent Crisis," is one of the stupidest headlines that I have ever read. (Excluding the New York Times, of course)

Of course landlords are a major part of the rent crisis, they are the ones who overcharge rent.

The real story here, and what the actual article is about, is that there has been a cartels of landlords that have been formed across Canada, and that this is driving up prices.

A headline like, "Landlord Collusion Spiking Rents," or, "Monopolist Landlords Driving Up Rents," would be far more appropriate:

Canada’s rental crisis is often dismissed by the corporate media as a “mismatch” between supply and demand. But a deeper analysis of the country’s rental market — where tenants face some of the highest housing costs on the planet — reveals that a tiny percentage of landlords are controlling the sector and exploiting tenants for their own gain.

None of Canada’s five million tenants need to read Canada’s mainstream media to know that the county is facing a rental crisis. Over the past year, according to an RBC Economics study, the country saw its “highest annual increase in rent growth on record.” These skyrocketing rents have also caused homelessness to explode in nearly all of Canada’s major cities. Housing congestion is a growing issue as well, with nearly 20 percent of renters in Toronto, 21 percent in Mississauga, 11 percent in Montreal, 13 percent in Edmonton, and 11 percent in Vancouver are forced into overcrowded housing units “not suitable for their household size.” 

………

Blame for record-high rents seems to be placed on everything and everyone — except landlords and speculators. Lamenting that it “has become cool” to “disparage” real estate speculation, the Toronto Sun claimed earlier this year: “If it wasn’t profitable for investors to own rental properties, investors would take their capital elsewhere and supply would diminish. We need them.”

………

The country’s extortionate rent hikes are hardly an accident of mismatched supply and demand. Housing scarcity is undoubtedly a problem. But using it to hand-wave away eye-watering rental costs is obtuse or disingenuous. Canada’s landlords are not simply having their hands forced. Empowered by Canada’s governments, landlords are reaping record profits at their tenants’ expense. 

Despite the media’s focus on Canada’s so-called “small landlords,” [Senior economist from the Canadian Centre for Policy Alternatives (CCPA) Richard] Tranjan observes:

The widespread notion of “struggling landlords” is a grave mischaracterization of the rental market. In fact, Canada’s landlord class comprises wealthy families, small businesses, corporations, and financial investors. Rent revenue increases their wealth and political influence, allowing them to extract more income from more tenants, amass more wealth, and do it again.

………

Statistics Canada estimates that the relatively small number of homeowners, who have invested in multiple units, account for nearly one-third of total home ownership.

In 2021, half of the dwellings in the downtowns of Toronto, Montreal, and Vancouver were condos. But, as Statistics Canada notes, more than half of these condominiums were owned by investors — comprising a total 840,045 units overall. These investors have, on average, managed to obtain up to a 30 percent increase in the value of their assets while renting them out to desperate tenants in Canada’s major cities. 

The article is pretty good.  The headline?  Not so much.