Investment incentives of rent controls and gentrification – Evidence from German micro data

Vera Baye and Valeriya Dinger
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Vera Baye: University of Osnabrueck

No 342, NBP Working Papers from Narodowy Bank Polski

Abstract: We investigate how housing returns are influenced by the introduction of a rent brake as a form of rental control in Germany in 2015. We derive the housing returns by matching micro-level quotes on similar objects offered for rent and for sale. We exploit the temporal,regional and object-specific variation in the framework of a multi period difference-in-differences analysis to identify the effect of the rent brake. Our results show that the main goal of the political intervention to secure affordable living space in tense housing markets cannot be attained due to construction incentives in newbuilds and fostered gentrification.

Keywords: rent control; housing supply; regional data; rent-price ratio; gentrification; housing affordability (search for similar items in EconPapers)
JEL-codes: E65 R10 R21 R23 R31 R38 (search for similar items in EconPapers)
Pages: 58
Date: 2021
New Economics Papers: this item is included in nep-reg and nep-ure
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:nbp:nbpmis:342

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