The impact of the 2023 housing law on rental prices in Catalonia: an empirical analysis using differences-in-differences

What is it about?

This paper assesses the impact of Catalonia’s 2023 Housing Law, designed to control rental prices in high-demand areas like Barcelona. The research examines whether the policy successfully reduced rental prices by comparing trends in Catalonia before and after the law's introduction with those of other Spanish regions. A Differences-in-Differences (DiD) approach is employed, treating Catalonia as the experimental group and other Spanish regions as the control group. The study accounts for macroeconomic factors such as GDP and inflation, relying on administrative data for precise rental price measurements. The findings indicate that although rental prices in Catalonia decreased slightly post-policy, the reduction was not statistically significant compared to control regions. Macroeconomic variables, particularly GDP growth and housing supply, were more influential on rental price trends than the rent control policy itself. The limited post-treatment period (2023–2024) may restrict the study's ability to capture the full effects of the policy. Future research should explore longer-term impacts and examine additional outcomes such as housing quality and tenant mobility. Rent control measures by themselves may not be sufficient to reduce prices in high-demand areas unless housing supply issues are addressed. Policies should combine rent control with strategies to increase the housing supply and enhance urban planning efforts.

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