Argentina Scrapped Its Rent Controls. Now the Market Is Thriving

President Javier Milei’s fiscal ‘shock therapy’ yields lower rents overall, but some people feel squeezed

By Ryan Dubé and Silvina Frydlewsky of The WSJ. Excerpts:

"The Argentine capital is undergoing a rental-market boom. Landlords are rushing to put their properties back on the market, with Buenos Aires rental supplies increasing by over 170%. While rents are still up in nominal terms, many renters are getting better deals than ever, with a 40% decline in the real price of rental properties when adjusted for inflation since last October"

"In Buenos Aires—a city dubbed the Paris of the South for its broad avenues and cafe culture—many apartments long sat empty, with landlords preferring to keep them vacant, or lease them as vacation rentals, rather than comply with the government’s rent law.

In 2022, there were some 200,000 empty properties in Buenos Aires, up 45% from 2018"

"Finding an affordable apartment under the rent-control law was difficult."

"rental prices appear to be stabilizing. Monthly price increases are now at their lowest rate since 2021 as more apartments become available"

"At least for now, the housing market is thriving. Opponents of price controls say Argentina is a cautionary lesson for officials from the U.S. to Europe who have looked to curb surging housing costs with rent controls. 

President Biden recently called for some rent increases to be capped at 5% annually. And Vice President Kamala Harris said that if elected president she “will take on corporate landlords and cap unfair rent increases.”

González Rouco, the economist [at Buenos Aires-based Empiria Consultores], warned against such plans. “With good intentions or a law,” he said, “you can’t modify how markets work. They have their own dynamic.”"