Buenos Aires Rental Supply Surges Over 170% Following December 2023 Rent Control Repeal

Buenos Aires has experienced a dramatic increase in rental apartment availability, with supply surging by over 170% and real prices dropping by 20-40% since the repeal of national rent control laws in December 2023. This significant shift follows a period of severe housing scarcity under the previous regulations, a phenomenon highlighted in recent academic research. The tweet by Antoine Levy, referencing "The Impact of the Chainsaw-Liberation on the Rental Housing Market in Buenos Aires" by Elfert and Thomsen (IZA DP 18107), underscores the widely observed effects of this policy reversal.

Argentina's 2020 rent control law, intended to protect tenants by capping rent increases and mandating three-year leases, inadvertently led to a sharp contraction in the rental market. Landlords, facing high inflation and restrictive terms, withdrew properties, resulting in a reported 45% drop in rental availability nationwide and a 53% plunge in long-term rental listings on platforms like Zonaprop in Buenos Aires. This created a paradoxical situation where many properties sat empty while renters struggled to find affordable housing.

President Javier Milei's decision to repeal these controls as part of his broader deregulation agenda has rapidly revitalized the market. Data from real estate platforms show traditional rental listings in Buenos Aires skyrocketing, with some reports indicating a nearly 200% rise in available units. This immediate surge in supply has exerted downward pressure on real rental prices, making housing more accessible for many.

The "Chainsaw-Liberation," as referenced in the academic paper and the tweet, alludes to President Milei's self-described approach to cutting back state intervention. His administration argues that removing government controls fosters a more competitive and responsive market, ultimately benefiting both landlords and tenants through increased supply and greater flexibility in contract terms. This move aligns with free-market principles that suggest rent controls often lead to unintended negative consequences, such as reduced investment and housing shortages.

While the immediate impact has been a notable increase in housing supply and a reduction in real rents, the long-term implications continue to be observed. Critics suggest that deregulation could lead to displacement for some low-income tenants, despite the overall increase in availability. However, proponents emphasize the return of properties to the formal market and the increased choice now available to renters in the Argentine capital.