Paper #1836
- Title:
- The effect of second generation rent controls: New evidence from Catalonia
- Authors:
- Joan Monrās and José Garcia Montalvo
- Date:
- December 2021 (Revised: April 2022)
- Abstract:
- Catalonia enacted a second-generation rental cap policy in late September 2020. The policy affected some municipalities but not others, and within those, only the units above a certain reference price. Using micro-data on rental units, we analyze the effect of the policy on both rental prices and rental supply. We find that the policy led to a reduction in rental prices of around 5 percent. Half of this price decline is due to changes in the composition of units available in the market, particularly in larger municipalities. The policy also led to a decline in the amount of rental units available in the market. Using variation from the policy change, we compute a rental housing supply elasticity of around 4.
- Keywords:
- Rent control, reference price, housing supply, event study
- JEL codes:
- D4, R21, R28, R31
- Area of Research:
- Statistics, Econometrics and Quantitative Methods
Download the paper in PDF format (3,917 Kb)