Argentina's Housing Supply Grows After Rent Control Law Removed

In a significant shift in Argentina's housing policy, the controversial "Rental Law" mandated a minimum three-year rental period, imposed rent caps, and limited security deposits to one month’s rent. However, the law has led to a dramatic collapse in the housing market, with the Argentine Real Estate Chamber reporting a staggering 95 percent decrease in rental property availability in Buenos Aires since its implementation. As a result, many tenants are facing exorbitant rent increases, with one individual recounting a 350-percent hike for a lease renewal. The situation has prompted a surge in the number of available rental properties following the repeal of the rent control laws by President Javier Milei on December 29, 2023. According to Newsweek, the supply of rental housing in Buenos Aires has increased by over 195 percent since the repeal, leading to a notable drop in rental prices. This shift has sparked discussions about the effectiveness of rent control policies, with critics arguing that such measures can lead landlords to convert rental units into condos and reduce maintenance efforts. Despite the evidence from Argentina's experience, U.S. political figures like Kamala Harris continue to advocate for rent control measures. The Cato Institute has highlighted potential negative consequences of such policies, suggesting they may exacerbate housing shortages. Meanwhile, the rise of Airbnb rentals in Buenos Aires, which nearly tripled during the rental law's enforcement, underscores the complexities of the housing market in the face of regulatory interventions. As the Argentine housing crisis unfolds, it serves as a cautionary tale for policymakers considering similar rent control measures elsewhere.