top of page
Recent Posts

The Pitfalls of Rent Control: A Critical Analysis of Bill M 201

Blog banner with three hands, one of which is signing a piece of paper while the other is pointing to where to sign. In the background is another hand holding a miniature house. The caption of the phot reads "The Pitfalls of Rent Control, A Critical Analysis of Bill M 201"

The recent proposal by the BC Green Party to implement rent control measures through the Residential Tenancy Amendment Act, or Bill M 201, warrants a critical examination in light of its potential impact on the housing market. While the intention to address housing affordability is commendable, the proposed rent cap of 3.5% on new leases will likely have adverse consequences that could exacerbate the very crisis it seeks to alleviate.

The BC Greens say they believe this will help prevent needless ‘renovictions’ and will help stabilize the rental market, however, rent control policies, such as those outlined in Bill M 201, interfere with the fundamental economic principles of supply and demand and drive three major disincentives for housing creation.  

Landlord Disincentives

By artificially restricting the ability of landlords to set rental prices based on market conditions, rent control measures distort incentives for property owners and developers.  When landlords cannot increase rents to cover rising costs or generate sufficient investment returns, they are disincentivized from maintaining or investing in purpose-built rental properties.  This can result in a reduction in the overall supply of rental units, exacerbating housing shortages and driving prices up in the long term.

New Development Disincentives

Moreover, rent control measures can deter new housing development as developers may be less inclined to invest in areas where their returns are restricted.  This is particularly concerning given the ambitious plan outlined by B.C. Premier David Eby to deliver 250,000 more homes in the next decade through zoning changes and other initiatives.  By limiting the potential returns on new housing projects, rent control will undermine efforts to increase housing availability and ultimately improve affordability. Capital will flow to jurisdiction without such restrictions. 

Maintenance and Upkeep Disincentives

An additional consideration is that rent control policies have been shown to lead to reduced housing quality, decreased investment in maintenance and renovations, and increased discrimination against certain tenants.  Property owners may be less motivated to invest in property improvements if they cannot recoup their costs through higher rents, ultimately harming tenants and exacerbating housing inequality.

Although they may provide short-term relief for some tenants, rent control measures do not address the underlying issues such as inadequate housing supply, population growth, and economic factors driving housing demand.  To truly address the housing affordability crisis, policymakers must focus on implementing comprehensive solutions that address these systemic issues that lead to rapid value erosion of money through rapid inflation.  Therefore, while the intentions behind Bill M 201 are noble, the proposed rent control measures will likely have the opposite effects and further unintended consequences that may worsen the housing affordability crisis in British Columbia.


Malahat Valuation Group specializes in business valuation and real estate appraisals to owners of privately owned companies and their professional advisors.

When owners need to leverage, sell or reorganize their assets, we answer the age-old question "What is it worth?".

We provide our clients and their advisors peace of mind by preparing professional valuations that stand up to scrutiny from lenders, the Courts, and the Canada Revenue Agency.

Malahat Valuation Group Inc.

(250) 929-2929


bottom of page