No rent control = housing boom and lowered prices?

227 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

What you’re missing is the rent control laws themselves were kinda shitty. The big thing is they heavily restricted what kind of leases/tenancies you could have. With many instances setting the minimum to 3 years.  And there were other restrictions as well.

This apparently caused many owners to think “screw it, it’s not worth the effort.”

Because Argentina is ALSO dealing with major inflation right now (like measured in the hundreds of percents). So if a landlord rents an apartment with a 3 year lease, and that inflation still keeps rising, that lease will actually become a detriment to the landlord because the value of the Argentine Pesos they would be getting goes down and down and down.

So, supply went up because those long term lease rules were repealed.

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