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 the US, new housing really isn’t limited by profit incentive. New apartments generally aren’t rent-limted currently (rent control is usually about preventing landlords from raising rent year-on-year) and rents are already way higher than where they were, relative to wages, a couple of decades ago. So no one is being prevented from building new housing because of a cap on the rent they can charge. If you’re talking about requirements that new developments have *affordable housing*, that’s a different term than rent control, and can be done more or less effectively.
What’s *actually* limiting housing more than anything else is restrictive zoning that flat-out forbids it, at any price. Most of the land area of most cities is exclusively zoned for detached single-family houses, which happens to also be the most expensive kind of housing. Denser housing, including anything from apartment blocks to flats to duplexes, is only allowed to be built in a small central area that’s already been built on. Getting rid of this restrictive zoning and allowing denser development is the single biggest thing a city can do to naturally increase its housing supply and reduce costs.
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