Rent control policies adopted in various countries have often produced effects opposite to their stated intentions. Spain And Argentina they represent two emblematic cases of divergent approaches, which demonstrate how state intervention can aggravate the housing crisis, while economic freedom can instead resolve it.
In Spain, the government launched the “Ley por el Derecho a la Vivienda” in 2023, which modified the Urban Rental Law (LAU) of 1964, reformed in 1995 and 2013, with the aim of generating changes in the rental market. with the aim of reducing rental prices and facilitating access to housing. Among the most discussed measures stand out the control of rents in the so-called “stressed areas”, which can be declared as such by the autonomous communities, where annual increases are limited and a reference index is established to contain the increases, and the expansion of the category of “large owner”, which now also includes natural persons with at least five properties. However, the new legislation, far from solving the problem, has further reduced the supply of housing, as many owners have preferred to withdraw their properties from the market while several potential tenants have been left without housing options. This phenomenon has in turn fueled increases in rents, up to 42% in recent years, thus weighing heavily on family budgets. The most expensive cities have become Barcelona, with 27.77 euros per m2, and Madrid, with 23.52 euros, while the cheapest include Jaén, with 6.70 euros, and Ciudad Real, with 6.90 euros per m2. The restrictions introduced have also limited contractual freedom and discouraged new private investments in the real estate sector, further worsening an already critical situation.
The contrast between the two models raises important reflections and highlights the consequences of interventionist rent control policies. Which were stigmatized by Friedrich A. von Hayek, who already warned of the risks associated with setting rents below the market price, stating that «setting rents below the market price inevitably prolongs the shortage of accommodation. Demand continues to exceed supply and, if price caps are effectively enforced, it becomes necessary to build a mechanism for the authoritative allocation of habitable space.” This is what has regularly occurred in Spain, where state intervention has reduced the supply of available properties and worsened the housing crisis. Luigi Einaudi, for his part, he warned of the danger of “smashing” the marketcomparing it to a complex mechanism that requires study and improvement, not destructive interventions. In fact, he wrote: «Whoever does not want to transform the whole of society into an immense barracks or a prison must recognize that the market, which automatically achieves the result of directing production and satisfying the effective demand of consumers, is a mechanism that does not it can be lightly smashed to see, as children do with toys, how it is made inside. Instead, it deserves to be carefully studied in order to be gradually perfected.”
Also Walter Block He stressed that “it may seem paradoxical to many people, but the best way to help tenants is to grant economic freedom to landlords.” The Argentine experience clearly demonstrates the validity of this principle. Deregulation has led to a significant increase in the supply of housing and a stabilization of prices, with benefits for both owners and tenants. tenants.
Ultimately, the comparison between Spain And Argentina shows how rent control policies, although driven by good intentions, risk worsening the housing situation, reducing supply and increasing pressure on prices. On the contrary, economic freedom, when supported by a stable and clear legal framework, can allow the market to operate as an essential tool to direct production and satisfy consumer demand, thus ensuring long-lasting and sustainable solutions to the housing crisis, for the benefit of all parties involved.
On the sidelines of what has been written, and to close, it is natural to ask: and theItalydoes it follow Spain or Argentina? The answer is simple: the Bel Paese, over tango, the dance of love and freedom, has preferred and still prefers toreador and bullfighting. Olé!
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