The Effect of Second-Generation Rent Controls: New Evidence from Catalonia

Joan Monras and Jose G. Montalvo ()
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Jose G. Montalvo: https://bse.eu/people/garcia-montalvo-jose

No 2023-28, Working Paper Series from Federal Reserve Bank of San Francisco

Abstract: Catalonia enacted a second-generation rental cap policy that affected only some municipalities and, within those, only units with prices above their “reference” price. We show that, as intended, the policy led to a reduction in rental prices, but with price increases at the bottom and price declines at the top of the distribution. The policy also affected supply, with exit at the top which is not compensated by entry at the bottom. We show that a model with quality differences in rental units rationalizes the empirical facts and allows us to compute the welfare consequences of the policy.

Keywords: rental markets; rent control; housing supply (search for similar items in EconPapers)
JEL-codes: D04 R21 R28 R31 (search for similar items in EconPapers)
Pages: 69
Date: 2023-09-20
New Economics Papers: this item is included in nep-ure
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Related works:
Working Paper: The effect of second generation rent controls: New evidence from Catalonia (2022)
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DOI: 10.24148/wp2023-28

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