Case study Argentina: Javier Milei got rid of rent control, housing supply skyrocketed
Image by José Román
While local pols, SJ City staff, and housing 'advocates' clamor for more and more destructive rent control, the facts on the ground undermine their arguments. Newsweek reports on how the reform-minded admin in Argentina put a chainsaw to the country's pernicious rent control regime, and affordable housing flourished.
Argentina's recent repeal of rent control by libertarian President Javier Milei has led to a surge in housing supply, with the freedom to negotiate contracts, previously restricted, directly causing a drop in rental prices.
Milei, a self-described "anarcho-capitalist" known for his free-market approach, repealed the 2020 Rental Law, enacted by former leftist President Alberto Fernández, which had imposed restrictions on landlords and led to a significant decline in rental availability.
With Argentina's inflation reaching 211.4%—the highest in 32 years—rent prices were adjusted every 12 months, and leases had to last at least three years. The law, introduced in 2020, ended up distorting the real estate market and hurting both landlords and tenants.
The law aimed to provide tenants with more financial security, but by the end of last year, an estimated one in seven homes in Buenos Aires was sitting empty as landlords chose not to rent them out in Argentine pesos. Deposits were capped, and it was nearly impossible to end tenancies early.
For many locals, finding a new apartment had become "mission impossible." But after the repeal, Buenos Aires saw a doubling of available rental units, and rental prices have stabilized. Under the new rules, landlords and tenants have more freedom to agree on lease terms. If the duration isn't specified, it defaults to two years.
Since Millei's repeal of rent control laws took effect on December 29, the supply of rental housing in Buenos Aires has jumped by 195.23%, according to the Statistical Observatory of the Real Estate Market of the Real Estate College (CI).
The debate over rent control is not specific to Argentina. In the U.S., where housing affordability is a major issue, the Argentine example is drawing attention. The libertarian Cato Institute in Washington D.C. pointed out that Argentina's experience shows the inherent problem of price controls, which in the case of housing can both limit supply and worsen affordability problems more broadly.
"Milei cut rent control and other tenancy regulations. The result confirmed economic theory: the supply of rental accommodation is surging, and rents have fallen," said Ryan Bourne, chair for the public understanding of economics at Cato.
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