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
In Argentina an apartment would be rented and the rent was fixed for the period of the rental. Argentina has, and is suffering from rampant inflation, currently in excess of 200%, this caused landlords to pre-load the rent to allow for inflation or not rent a property.
Removing rent controls allows a landlord to increase rent during the period of the rental, thus moving the risk from the landlord to the renter. Rents appear to decrease as the landlord no longer has to pre-load the rent to allow for inflation and more property has become available as there is less risk to the landlord.
What will happen in the future as rents rise? Once scenario is that the renters will demand higher wages to pay for their increased rents thus creating a continuing inflationary spiral.
Unfortunately we will only find out if this is a good or bad policy in several years time.
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