The Barcelona Institute of Economics (IEB) has presented its new IEB Report entitled “The Rental Price Problem: What Can Be Done?”, coordinated by Jordi Jofre, professor of economics at the University of Barcelona and IEB researcher. The report includes contributions from three academics: Héctor Blanco Fernández (Rutgers University), Teemu Lyytikäinen (VATT Institute for Economic Research in Helsinki), and Mariona Segú (ThEMA and CY Cergy Paris Université).

The report indicates that to address the housing crisis, the recommendations that generate the greatest consensus among economists are to increase the supply of private housing (especially by carrying out compact building projects), increase the stock of social rental housing, and improve and expand the public transportation network. However, as Jofre points out, none of these policies are applicable in the short term, that is, with the aim of immediately addressing the rental affordability crisis. The report states nonetheless that “there are two policies used in many developed countries that potentially address the problem of short-term rental affordability: rental subsidies and rental price controls.” According to Teemu Lyytikäinen (researcher at the VATT Institute for Economic Research), “the most recent research does not justify a negative view of rental subsidies.” This assertion challenges the view, prevalent until a few years ago, that these subsidies were ineffective, as they were largely capitalized in rental prices.

Regarding price controls, Professor Jofre points out that “these policies have immediate effects and do not require budgetary resources, and are therefore an instrument worth considering to address the current rental affordability crisis.” However, he notes that it is also true that “these policies also often have unintended consequences, such as a reduction in the supply of rental housing, a shift toward unregulated market segments, and a decrease in tenant mobility, which can undermine their overall effectiveness.”

The presentation of the report also featured a roundtable discussion with the participation of Jaume Forn i Paradell, deputy director general of the Promotion of Protected Housing at the Housing Agency  of Catalonia; Gerard Capó, Manager of the Municipal Institute of Housing and Rehabilitation of Barcelona; Núria Lambea, from the Municipal Service of Housing and Urban Actions of the Tarragona City Council; and David Guàrdia, from the NGO Sostre Cívic.