Although the intention of the law is to facilitate access to affordable rentals in high-priced areas, the chosen path seems erroneous. Data shows that market intervention usually counteracts its objective, producing a contraction of supply. The real rental problem is the lack of available housing, and to reduce prices it is necessary to expand supply, not restrict it.
This could be achieved in two ways: by generating an environment of legal and economic certainty that encourages small owners to offer their properties to the rental market, and by promoting public-private collaboration to make residential land available to long-term investors with concessions that allow for the construction of housing destined for rent with regulated incomes.
The new law, on the other hand, may cause a reduction in supply, as with the increase in interest rates, many owners will sell their properties or allocate them to seasonal rentals. Furthermore, owners will be more demanding with tenants, favoring only the most solvent and leaving out of the market those who really need affordable rentals, thus contradicting the objectives of the law.
One cannot legislate thinking solely of press headlines or elections. The rental market needs long-term policies that foster an affordable and sustainable residential stock to address the structural problem, not just the current situation.
Opinion article written by Rubén Llach, co-director of Llach Serra & Associats, vice-president of the Association of Property Managers of Barcelona-Lleida.
Published on April 28, 2023 in the economy section of El 3 de vuit.