Wednesday, May 02, 2007

Worse Than Bombing

Julian Koziak a politician who oversaw rent control in the final years of Alberta's last big boom is against a return to the idea.

"It's been written that rent controls have done more damage to cities than bombing Koziak was quoted on Tuesday. He also said they discourage construction.

"It was part of a national response to an economic crisis that resulted from inflation," he said. "Interest rates went through the roof and hit 21 per cent."

Alberta imposed rent controls reluctantly in late 1975 to comply with the federal anti-inflation program. The plan was to limit increases to 10 per cent in 1976 and nine per cent in 1977, then end the controls.

The scheme coincided with Alberta's last big oil boom, when vacancy rates fell almost to zero. As a result, there were fears rents would soar when controls ended, so the province ended up extending the plan, eventually phasing out controls by 1980 -- shortly before the bubble burst and vacancies became widespread."

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