The housing market: the culprit or the solution?

A new regulation of the housing market has been approved in the Parliament of Catalonia with the aim of making renting more accessible. The entire regulation exudes the belief that the market belongs to someone who controls it. Nothing could be further from the truth. The real estate market and the rental housing market are among the most competitive markets in existence, meaning that the prices agreed upon in transactions are not the result of any position of power on one side, but rather an equilibrium derived from supply and demand. Yes, the dreaded supply and demand, so hated by many, but the most equitable mechanism in competitive markets. So much so that all legislation guaranteeing competition in markets is always seen as consumer protection. Every real estate transaction is based on agreements that are not protected by any monopoly. If someone doesn't want to accept a price, they can go elsewhere to find a lower price. If there is a conflict over a specific location, it means that the dispute is not about a property itself, but about a location. In other words, the parties involved aspire to the small monopoly power that that property represents. Everyone: buyers and sellers. In the real estate market—buying or renting—everyone speculates, since everyone expects a profit. Buyers and renters alike expect a profit. When rent regulation is demanded, it means that many expect a profit, which will come at the expense of another person or company. This is called redistribution, not a market. Let's set aside the term speculateEveryone's a speculator, starting with those who want to influence housing prices through political pressure or regulatory changes. This is textbook speculation: changing the rules to change the price.

If redistribution is the goal, the public sector must take the lead, providing public housing. The responsibility cannot be placed on the private sector, which is under no obligation to solve the problem by force. If housing regulations force landlords to rent below market price, it's understandable that owners will hesitate and opt to sell and transform their property into a financial asset, which receives far more favorable tax treatment and—surprisingly—doesn't generate the same social hostility as real estate. Does anyone consider launching a campaign against financial assets? No. But they are indeed privileged compared to real estate. In contrast, the social function of real estate is far greater. Therefore, its ownership and rental should be protected, as a benefit to all parties involved. The owner of a property will not rent it out if it can be occupied and the legal system, the courts, and the police are slow to return the property. They will prefer to sell and escape that risk. Nor will they rent if they're burdened with excessive taxes—unlike financial assets—or if they find themselves facing a political campaign against them. Policies in recent years have all been of this nature, and the typical savings of the middle class are disappearing due to landlords' fear of being expropriated—of their property and/or their income. Ignoring this evidence is completely counterproductive. There will be more rentals when homeowners are no longer afraid of having their properties occupied or being expropriated.

The market is demonized when it is the solution. Good protection of property rights is essential for more homes to appear on the market. Poor regulation, on the other hand, will ultimately lead to owners who cannot sell renting to wealthy foreigners indefinitely, because they are more solvent and cause fewer problems. With the legal reform underway, the famous expados They will be able to access the same apartments as before, but at a lower price. But no one will rent to someone who shows signs of wanting to default on payments. They'll sell first.

All the rage and fury of the anti-eviction movement doesn't solve the housing problem. It's solved by guaranteeing property rights—that is, the opposite of what the Catalan Parliament wants to approve—and by promoting new construction. There are many prejudices against this, but for more than fifteen years, not enough has been built, not by a long shot, to meet the growing demand. And this is due to municipal regulatory barriers, fear of a housing bubble, a climate of opinion against urban densification and construction in general, a desire to preserve the environment and consume less, and countless other reasons that have resulted in a housing shortage for everyone and have left the regulatory authorities, who live off taxes and housing, with a bad piece in the loom...