The truth about rent caps
We are in the middle of an election campaign and the issue of the housing access crisis is one of the central topics of the debate. In fact, the Spanish president, Pedro Sánchez, called early elections to take advantage of the so-called Maricarmen moment. Then came the railway drama in Urda. But housing has returned to the agenda with the strike of last November 11th. Undoubtedly, it is a key social problem. In Catalonia, it is especially serious due to demographic growth and tourism pressure.
Around the subject, one of the recurring questions is: have rent price caps worked in tense areas? The answer is yes. 88% of academic studies conclude that the caps have slowed the increase in rents, according to a bibliographic review that has examined publications on the matter around the world, published by the Journal of Housing Economics. Prices have been contained, yes, experts consulted by ARA also confirm. But that does not mean they have gone down, but rather that they have not risen at the same rate as before. And it does not mean that it is a panacea.
Because, on the other hand, the measure has had collateral effects, regarding which, however, there are more intuitions than precise data. What parallel phenomena have occurred? Apartments may have been withdrawn from the market (it is not known if the reduction in contracts is due to lower profitability or the fact that families are extending their stays in already rented apartments); it seems that rental apartments today have fewer square meters on average (therefore, the price per square meter has risen considerably); most of the offers on real estate portals are now seasonal rentals, the loophole through which landlords escape rent price caps; it is known that the portals themselves avoid posting many offers, which are channeled directly to clients they have on waiting lists; there is, in addition, the suspicion that landlords negotiate directly by word of mouth with trusted people.
The range of cases is vast. The caps, which a change of government in Spain, with the emergence of a PP-Vox government, could render useless, have had real but limited effects on the rental market, in which supply continues to be the main failure. It would therefore be necessary to build much more and at a much faster speed, both public housing and free-market housing, as much new construction as renovations or increases in density (for example, building additional floors). The housing crisis remains deeply entrenched and demands brave and decisive actions.
Finally, so that decisions and actions are not taken half-blindly, as experts say, more reliable data would be needed, a kind of Active Population Survey (EPA) for the housing market. The current data from the Generalitat, obtained from the deposits held at Incasòl, are good: they specifically reflect the average price of new contracts signed in each municipality. And data from portals, especially the main one, Idealista, are also good, but they do not reflect the whole reality either. The fact that the two do not coincide already shows the complexity of the problem.
Thus, it is necessary to get to work, both to activate supply and to improve data in order to see what works and what does not in market regulation.
