Argentina got rid of rent control. Housing supply skyrocketed

www.newsweek.com

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Housing supply skyrocketing means that people were evicted from their homes when their controlled rent increased to an amount they could not afford.
This is a bad thing. Even if you're a heartless bastard who doesn't care about the individuals who now have no place to live, people who lose their housing cannot effectively work jobs and support the economy. This negatively affects everyone, even landlords, because being slightly richer in a worse economy will leave you worse off than before.
- We can observe housing supply dropping in places where rent controls were recently introduced like Berlin though.
  Source: https://www.economist.com/europe/2021/03/09/after-a-year-berlins-experiment-with-rent-control-is-a-failure
- If you read TFA you would have noticed many landlords refused to rent properties.
  The law aimed to provide tenants with more financial security, but by the end of last year, an estimated one in seven homes in Buenos Aires was sitting empty as landlords chose not to rent them out in Argentine pesos. Deposits were capped, and it was nearly impossible to end tenancies early.
- Landlords won't offer rent if the rent is below what they think is profitable. You didn't read the article, obviously. Rent controls, control price increasation, not the supply of properties that offers rents to tenants. Price controls don't work. Venezuela did plenty of that, and that doesn't stop the large waves of migrants from fleeing the failed state.
  
  If the rent is no longer profitable, the landlord's best interest is to sell the property. They are not compelled to maintain ownership of a building full of unprofitable people.
Funny, I hear homelessness has also skyrocketed.
Rent control is about the only thing most every major economic school agrees is a bad thing. Removing it and seeing positive results isn't surprising.
- It’s surprising to that narrow slice of people who didn’t yet know how markets work, but who are open to the idea.
This is wonderful to hear. Without positive examples, there’s no way to prove to the doubters that free markets do, in fact, work.
- To be fair, the issue here is that some parts of the market are free, while others aren't. If your entire economy is controlled by the state, then this isn't an issue at all. The state exerting some level of control over all aspects of the economy ends up working pretty well< while a true laissez faire economy very quickly ends up being unfree due to monopolies.

17 comments