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
You’re missing the supply side of the equation. rent control in argentina was essentially just that you had to give 3 year leases and you had to accept rent in pesos (which is losing value). It wasn’t a cap on rental prices.
So, you’re a landlord in a country where inflation is crazy, and you have to give someone a 3 year lease……well 3 years from now I could be losing money on that rental agreement.
So, they listed their rents high to hedge against inflation, or just didn’t rent them out at all. Others sold their properties, or listed them on things like AirBnB.
Now that’s gone, so there are more rental properties available and costs go down.
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