Effectiveness and supply effects of high-coverage rent control policies

Jordi Jofre-Monseny, Rodrigo Martínez-Mazza and Mariona Segú

Regional Science and Urban Economics, 2023, vol. 101, issue C

Abstract: Concerns about housing affordability are widespread in cities worldwide, prompting discussions about rent control policies. This paper studies the effects of a rent control policy adopted in Catalonia in 2020 that applied to some but not all municipalities. The policy virtually covered all the rental market and forced ads and tenancy agreements to specify the applicable rent cap to ensure enforcement. To identify the causal effect of the rent control regulation on the rental market, we exploit register microdata of tenancy agreements and implement difference-in-differences regressions and event-study designs. Our results indicate that the regulation reduced average rents paid by about 4% to 6%. We do not find evidence of a reduction in the supply of rental units, as measured by the number of signed and ended agreements or the active stock of rental units. We implement several robustness tests to address identification concerns related to Covid-19. Our results suggest that rent control policies can effectively reduce rental prices without necessarily shrinking the rental market.

Keywords: Rent control; Housing; Public policy evaluation; Event study (search for similar items in EconPapers)
JEL-codes: H70 R31 R52 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Effectiveness and supply effects of high-coverage rent control policies (2023)
Working Paper: Effectiveness and supply effects of high-coverage rent control policies (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:101:y:2023:i:c:s0166046223000510

DOI: 10.1016/j.regsciurbeco.2023.103916

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