No rent control = housing boom and lowered prices?

213 viewsEconomicsOther

Saw this post on Instagram (https://www.instagram.com/reel/DAjCAJYusg6/?igsh=djRsOGh3ZzhyY2Zr ) which claims that the removal of rent control in Buenos Aires led to an increase in available housing and a decrease in housing prices which seems counter-intuitive to me.

Is the increase in availability due to landlords raising the rent and forcing existing renters out ( thus more availability)? But how then are the prices of these places somehow lower?

What am I missing?

In: Economics

19 Answers

Anonymous 0 Comments

Often when there’s rent control- a landlord will decide the rent they would receive from regular tenants would be too low- so instead they keep an apartment vacant until they have a family member or good friend to rent the unit to.

Also- a lot of rent control is some form of: “rent out the unit at whatever price you want- but you can only increase the price by 3% per year”. In cases like this- the landlord just has a super high first year price- so that even if rent goes up only 3% per year- they’ll still be making money.

You are viewing 1 out of 19 answers, click here to view all answers.