Landlords as Economic Prisoners of War

Rent regulation has been a feature of the rental housing market in Ontario since December 1975. As with other forms of regulation, people do not simply comply with the rules, they alter their behaviour in response to the constraints that have been imposed. Landlords can be expected to respond to policies that restrict their economic freedom by making use of five strategies. They may escape, adapt, cheat, wait, and lobby. The paper documents a number of escape strategies employed by landlords in Ontario in the period since rent regulation was introduced. The response by tenants and government to reinforce the walls and close escape routes when they appear is also documented. Ontario's experience with rent regulation serves as a case study demonstrating that landlords, like other economic and non-economic prisoners, seek to escape from the rules that confine them. The greater the economic incentive to escape, the more complex the barbed wire of regulation must be to avoid escapes.