PERMACRISIS - How a State of Prolonged Stress is Changing How We Think

A few weeks ago I had the pleasure of attending an event in which David Coletto was a speaker. For those of you who don’t know, David Coletto is the founder and Chairperson of Abacus Data, an Ottawa based polling company whose surveys and political opinion polls are cited by most Canadian news media (the ‘cool’ ones anyway). David is also a professor at Carleton University and is seen by many as the premier pollster in Canada and most in tune with what Canadians are thinking but sometimes not saying out loud. 

David was kind enough to share recent polling results that his company undertook and I found the results to be VERY interesting as they gave us insight into the mindset of Ontarians and just how Ontarians are feeling about their lives and the issues they’re experiencing. 

From the data it was clear that we as Ontarians have moved into a new era in terms of how people are feeling about their lives and how they see the political choices in front of them at all levels of government. To most, the last few years have felt like a “PERMACRISIS”, defined as “an extended period of instability and insecurity” and the Collins Dictionary word of the year for 2022. The overall conclusion drawn is that we are not moving towards, but instead have already crossed into a ‘scarcity’ mindset. A mindset that undoubtedly adds stress and tension to our everyday life. 

What does that mean? Well I think over the last number of years most people in Ontario have concluded it feels like it’s harder to get by to make ends meet, it feels like it’s harder to pay the rent or mortgage or that the dream of owning a home is harder to achieve for a large segment of the population than ever before. People look at the health care system and they say “even if I have or am lucky enough to have a family doctor, if that person retires where will the next one come from?” They look at the housing market and no longer say “when I can afford to buy a house” but instead say “if I can ever afford to buy a house”.

What weighs on us? The sense of scarcity - the sense that the things we took for granted now feel harder or even impossible to achieve in the future.

So the question is how does that affect how we think and act? The answer I have come to is we are all locked in a ‘fight or flight’ stress response. Any and every stimulus we encounter is now being met with a basic, ancestral response that our hunter-gather ancestors were met with when they came face to face with wild animals that threatened their lives (apparently the Flintstones lied to us – it wasn’t all rosy back in the day). 

Fight = Anger AND Flight = Fear

It will come as a surprise to no one that I am not a scientist (cue the shocked gasps from those reading this blog), but I do know that more and more business coaches, performance analysts and business leaders are leaning into the philosophy that behavioural scientists have been speaking to for some time now – put plainly, our brain, one that has not changed much physiologically since the time we were hunters/gathers, still works in the same way it did when were afraid of being attacked by wild animals. 

Stay with me on this one,…I appreciate the leeway given to me to this point,

Anxiety has a profound effect on brain areas associated with memory and emotional processing. In people with depression and anxiety, researchers have noted for years now that there is an associated shrinkage to a part of the brain called the hippocampus. By contrast, another part of the brain called the amygdala increased in size.


Recent research, featured in The Journal of Psychiatry and Neuroscience, surveyed over 10,000 subjects to analyze the effects of depression and anxiety on brain structure. The findings demonstrated that depression's detrimental effect on the hippocampus, responsible for memory and learning functions, causing it to diminish in size. Conversely, the study highlights that concurrent depression and anxiety result in significant enlargement of the amygdala, the brain region associated with emotions and when it comes to your survival, your amygdala is very important. It is part of the reptilian brain (cue visions of a crocodile thrashing about or Godzilla tearing through parts of Manhattan) i.e., the part of your brain that automatically detects danger. It also plays a primary role in behavior, emotional control and learning.

Fear is the main emotion that the amygdala is known to control. 

However, recent research shows that the amygdala contributes to more than just anxiety or fear. It also plays a role in Aggression AND Social Communication/Understanding (including how you interpret someone’s intentions).

Sound a bit farfetched? Let’s think about it some more. Is it so hard to believe that after years of high anxiety and high stress that we are now seeing physiological responses to things we are perceiving as threats? 

Things like a colleague raising their voice to demonstrate they are passionate about a topic OR your family member taking a more assertive posture when trying to make a point during Easter Dinner (did I share too much), might be being perceived by your hyper sensitive reptilian brain as a threat leading to unintended physical response (i.e., the before mentioned fight or flight response). 

Could it be possible that these things are triggering us and leading to more confrontation and stress?

To me, this helps explain the breakdown of discourse over the past few years. We have all been marinating in a soup of stress, anxiety, pressure and tension. I am having more difficulty having open conversations with friends, colleagues and loved ones on topics that we may have differing opinions on. Through conversations with others, they have reported the same thing. 

I was once warned that you should be wary of simple solutions/explanations to complicated issues, but to me this is one of many pieces that has led to the vast majority of us (I have labelled myself as a sane minded individual, who wants to do good and be good for lack of a better term) having less patience, not being as open to as many new ideas OR simply just getting frustrated at small normal ‘life’ moments. 


So with that in mind, let’s all take a collective deep breath, embrace actions that will help us reduce the size of our reptilian brain and remind ourselves, our neighbours, friends, colleagues and even our perceived ‘work enemies’ are generally all trying to do the same thing – to make their own lives better and what I like to believe is also make a positive difference in the world. 

I still have moments where I am not sure I even agree with my own statement above, but I am making an effort to try and believe it. The Godzilla version of Ian is even more unbearable then the ‘normal’ version – though that would make a box office hit if you ask me. 

Stay tuned for my future blog post detailing how the new found sense of scarcity mentioned by David Coletto is affecting the housing market/housing policy in Ontario and Canada as a whole.

Thank you for reading and as always, I welcome your feedback!


For more information on this article or anything Property Management related feel free to reach out and ask!

 

Understanding the Ontario 2018 Rent Control Exemption: Context and Implications

For those Ontario Landlords who feel they can set and/or adjust rental rates to market conditions, GUESS AGAIN. Ontario is a heavily legislated and Rent Controlled province with some strict rules on rental pricing. I am writing the following post to try and explain a small but largely confused/misunderstood portion of the rental pricing landscape in Ontario, the 2018 Rent Control Exemption.

The Ontario 2018 Rent Control Exemption brought significant changes to the province's rental housing landscape. So, let's dive into what this exemption entails, its context, and the implications it carries for Landlords and Tenants alike.

What is the Ontario 2018 Rent Control Exemption?

The Ontario 2018 Rent Control Exemption stipulates that all new residential rental units occupied for the first time as of November 15, 2018 (or thereafter), are exempt from provincial rent control regulations [1]. This exemption means that these units are not subject to restrictions on rent increases imposed by Ontario’s rent control laws.

Context and Motivation Behind the Exemption

The implementation of the 2018 rent control exemption was motivated by several factors:

  • Encouraging Construction: By exempting new residential units from rent control, the government aimed to incentivize the construction of more rental housing units. The absence of rent control regulations provides developers and landlords (both large and small scale) with more flexibility in setting rental prices, which in turn stimulates investment in the rental housing market and adds much needed stock.

  • Addressing Housing Supply Issues: Ontario faced a shortage of rental housing units, at a time of increased demand which lead to rapidly rising rental prices. The exemption aimed to spur the development of new rental units to address the growing demand and alleviate housing supply constraints. It hoped to add incentives to drive higher density and help fill the messing middle in rental housing (for example, Secondary Dwelling Units (SDUs) in the City of Ottawa).

  • Economic Considerations: The government considered the economic implications of rent control on Landlords profitability and investment incentives. By exempting new units, policymakers sought to balance the interests of Landlords with the need for affordable housing options. The more properties investors build, the higher the supply and with higher supply at a time of increased demand the hope was/is these additional units would help hold down escalating prices.

According to the Canada Mortgage and Housing Corporation (CMHC), the construction of new rental housing in Canada had seen fluctuations leading up to and after the implementation of the Ontario 2018 Rent Control Exemption.

Following the implementation of the Ontario 2018 Rent Control Exemption, there was a ‘notable increase’ in new rental housing construction. The influx of investments in rental housing projects was believed to be influenced directly by the exemption from rent control regulations, providing developers with greater flexibility and potential for higher returns.

Implications for Landlords and Tenants

For Landlords:

  • Increased Flexibility: Landlords of new residential units have the freedom to set rental prices based on market conditions without being constrained by rent control regulations.

  • Potential for Higher Returns: The exemption offers Landlords the opportunity to maximize their return on investment by adjusting rental prices in response to market dynamics. However more context should be added to this as most small-scale Landlords run cash flow deficits on their rental properties. They take on the risk of being Landlords to potentially benefit from the appreciation of the property vs. any cash flow gains (a topic I plan to explore more in a future post).

For Tenants:

  • Potential for Higher Rental Costs: Tenants in new rental units may face higher rental costs due to the absence of rent control regulations. Without limits on rent increases, tenants may experience more significant fluctuations in rental prices.

  • Impact on Affordability: This is a highly contested point. Some say the exemption could exacerbate affordability challenges for Tenants, particularly in areas with high demand and limited rental housing supply, while others argue the increased supply actual helps ease the price of the overall market as it makes inroads in balancing supply and demand forces.

The Ontario 2018 Rent Control Exemption represented a significant policy change aimed at addressing housing supply issues and stimulating investment in the rental housing market. While it offers benefits in terms of increased flexibility for Landlords, it also raises concerns regarding affordability and rental cost stability for Tenants. It is a highly debated/contested policy in the current housing crisis and will certainly be discussed further at length in the coming years.

Conclusion
The Ontario rental increase exemption is often referenced and used as the proverbial ‘boogie man’ when arguing for Tenants’ rights. However, an understanding that it was designed to help balance the supply and demand issues of rental stock leads us to its true intent. Rather than advocating for its elimination perhaps there is some middle ground to be found that allows this exemption to still exist but balance its existence with protecting at risk Tenants. Two such items could include:

1) Imposing a more reasonable cap to the exemption, such as a maximum of 10% per year, which could mitigate potential abuse while still allowing for the necessary adjustments
2) Ensuring that the Residential Tenancy Agreement (aka the Provincial Standard Form of Lease) clearly indicates if the subject property being leased is exempted from traditional rent control OR not (which would help empower Tenants with knowledge of their rental rights and warn them to the potential of larger then excepted increases)

No matter what adjustments are made to the exemption, a balanced approach will help ensure all sides are protected, all parties understand their rights and ultimately foster a more stable rental housing market which is the goal of the majority of Landlords and Tenants in Ontario.


For more information on this article or anything Property Management related feel free to reach out and ask!