Rent or not to Rent, that is the Question: The Impact of Rent Controls in Spain’s 2023 Reform

Abstract

This paper aims to evaluate the short-term impact of the rent-control policy introduced in Spain in 2023 by exploiting the regional variation in the policy implementation. I develop a simple theoretical model to investigate possible effects on prices and supply, focusing on the role of short-term touristic rent market. Comparing Barcelona - who adopted the rent cap - and Madrid, which serves as control city, I implement standard DiD and DDD models to empirically test the theoretical model.