A smallish headline on an inside page of the Toronto Star last week bore welcome news. ''Apartment shortage eases,'' it said. It turns out this means the vacancy rate in Metro Toronto has risen from one in a thousand to two in a thousand. Ah, all's well then. The glass isn't 99.8% empty. It's O.2% full.
What, one wonders, would be The Star headline the day after nuclear armageddon - ''Total disarmament at last''? But this is just a measure of the increasingly surreal air surrounding events in Ontario as the province tries to grapple with its rental housing emergency.
Your average high-school economics student could sing out the reason for the grotesque imbalance between supply and demand in the rental market without a moment's hesitation; or, you could appoint a Commission of Inquiry into Residential Tenancies, as did the Ontario government, to lumber along to the same conclusion five years and $3.2 million later. It all boils down to three words: Rent. Con. Trolls.
Before the former Davis government imposed rent controls as a ''temporary measure'' in the run-up to an election in 1975, the housing industry was building 48,000 apartment units a year. Last year, in the middle of an astonishing economic boom, with 150,000 people moving into the province, it supplied just 12,000 new units.
As a matter of efficient allocation, this is predictable enough: hold price below market levels, and you'll inevitably get a shortage. Perhaps less predictable is the distributional impact: the rich snap up all the cheap apartments. Of those tenants in Toronto earning $35,000 or more, 85% pay less than a fifth of their incomes on rent. Of those earning less than $20,000, almost 80% find rent takes a third or more of their income.
Why does this squeeze play happen? When price is knocked out as the means of allocation, social factors take over. To get a reasonably priced apartment in Toronto, you have to know someone. Those who aren't plugged into the network - whether newly arrived, just starting out, or down on their luck - have to go by the classifieds. The only apartments listed there are the ones nobody in the know would touch at the price. At the same time, in a seller's market, landlords have the luxury of choosing tenants most likely to be steady with the rent cheques.
But the real absurdity begins with the body of laws surrounding rent controls. For the lesson of rent control is that it requires not one law but several, and more and more the longer it remains. These fall into two broad groupings: some to prevent landlords and tenants from dealing with one another on the black market; and some to bribe, persuade or force landlords to boost or at least maintain the supply of apartments. The more successful the government's efforts in the first, the more will it feel compelled to act in the second.
To get around controls, landlords began to demand, and tenants to pay, up- front payments known as ''key money.'' So they were outlawed. Far from a spontaneous attempt by individuals to reach a mutually agreeable price, the government declared the practice a criminal offence.
A whiff of glamour was lent the whole business when the province hired a former member of the British secret service to hunt down this illicit activity. The mind races. Was he MI5? MI6? SAS? And how will he deal with the miscreants? Crash through a second-floor window as the money is changing hands? Or just take the landlord for a walk in the woods?
Unable to make a return on rents comparable to returns in other markets, landlords began converting apartments into condominiums. So legislation was enacted to ban them from doing so. Landlords switched to apartment-to-hotel conversions. That's being banned too. Those tempted simply to destroy their buildings and start again will find they can't do that either.
Unable to find an apartment, some would-be tenants have been forced onto the owner housing market, helping to double the price of a house in Toronto in three years. So there are calls for a stiff ''speculation tax'' on housing transactions to clamp down there as well.
Meanwhile, the main strategy for boosting the supply of private rental housing seems to be exhortations to charity. Mayor Art Eggleton has appealed to residents to rent out their basements. The minister of Housing, Chaviva Hosek, has taken to quoting passages from the Book of Ruth, imploring the populace to leave a sheaf of grain in a corner of the field.
The province plans to turn over land now occupied by psychiatric hospitals and driver training centres for use as apartment developments. Contests for the best new housing ideas are being held in the schools. And on it goes.
This is what rent control has accomplished, beyond mere shortage of apartments. What once was a normal market, regulated and disciplined by the automatic, impersonal functions of the price mechanism, has now become a furtive place of bribes and whispered queries, of beat the system and who you know. Where once there was order and dicipline, now there is anarchy. Where once there was the rule of law, now there is the rule of men, and sauve qui peut.