Rents feel too high in a lot of cities, so governments worldwide keep stepping in to push them down. The results have been mixed, and rarely what the reformers intended.
Argentina tried strict rules. A 2020 law required three-year leases, forced rents into pesos (that were declining in value), and allowed only one rent adjustment a year, tied to a government index. The law never capped the rent itself, but with inflation running near 3.5 percent a month, landlords could not keep up. Many set very high opening rents to hedge against the year ahead; others pulled out of the market entirely. By late 2023, roughly one in seven homes sat empty while renters fought over the few remaining leases.
Sweden tried a negotiated approach. Rents there are not frozen, but negotiated between landlord groups and tenant unions. Regulated rents are 30 to 50 percent below the open market. Landlords stayed, yet a shortage of rentals built up. The wait for a controlled apartment in Stockholm now runs close to nine years, according to the BBC. A sublet market filled the gap for a while, but ironically made apartments very expensive. Those with a regulated apartment renting for about 6,000 kronor would sublet for 11,000 on the second-hand market. That is illegal now. One way landlords can raise the rent is if they renovate and for renovations landlords can remove problem tenants. Now there are renovations, 'renovictions,' and few repairs.
Neither approach produced a single new apartment. In Argentina it left fewer rentals, as owners exited; in Sweden it left a years-long line for existing rentals.
When Argentina lifted its law in December 2023, the shift was fast. According to the Wall Street Journal, rental listings in Buenos Aires jumped more than 170 percent and real, inflation-adjusted rents fell about 40 percent — more apartments, and lower rents, the one result the controls had never produced.
Rick Good spent ten years in the newspaper business, including with The News & Observer (Raleigh, NC) and The Greenville News (Greenville, SC). He co-wrote, with Melinda Coleman, Rutledge to Riley: Governors of South Carolina, 1776–Present (Published by The Greenville News), and is the author of Mind Games Trivia #1 (Amazon). He has recently spent 15 years creating original trivia content through Sounds Good Mobile Entertainment and continues that with his new company, SGME Software. He edits The Smart Reader’s money, real estate, and business coverage.
