Series: Occasional Papers. 2002.
Author: David López-Rodríguez and M.ª de los Llanos Matea.
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Abstract
In recent years, residential rental prices have experienced remarkable growth in many
of the major metropolitan areas of advanced economies. On occasions, these increases
in rental prices have caused a significant increase in the cost of rental housing in the
household consumption basket and difficulties in access to housing for certain groups. In
this context, there has been a resurgence of the debate about the role of public policies
in the rental housing market, designed to mitigate both the problems of access to housing
and the potential negative effects of the growth of rental prices on workers’ mobility or on
the macro-financial stability of the economy. In this paper we review the main instruments
of public intervention in the residential rental market, in the light of international experience
among the main advanced economies. Broadly speaking, the different policies can be
classified into three main groups: rent controls; public provision of rental housing; and a
wide range of heterogeneous measures aimed at both incentivising the supply of private
rental housing and containing the increase in household spending caused by rising rents.
The experience accumulated over decades in the development of these policies and the
increasing availability of quantitative evaluations of their impact illustrate some of
the implementation challenges presented by support policies for residential rentals, as
well as the wanted and unwanted consequences associated with this type of intervention.