Rent control protects existing tenants but may shrink future rental supply. Critically examine using recent international experience.

Rent control means legal limits on rent levels or on how fast rents can rise. Spain's housing crisis, where average rents rose 84% in a decade [1], has revived an old trade-off. Caps protect sitting tenants, but they can reduce the homes available to future renters.

Rent control as tenant protection

• Security of tenure: 87-year-old María del Carmen Abascal stayed in her Madrid flat for decades under an old rent-control contract. After an investment fund bought it, her rent jumped from €500 to €2,650 and she was evicted [1].
• Curbing rent shocks: Spain's Law on the Right to Housing, 2023 caps rents in "stressed" markets. It also replaces CPI-linked rent increases with a new rent index [2].
• Social stability: caps keep pensioners and low-income families from being pushed out during speculative booms.

How caps can shrink future supply

• Weaker supply response: OECD cross-country data link stricter rent control to lower returns on housing investment and a weaker supply response. Spain's rent control is stricter than the OECD average [3].
• Exit to unregulated uses: after Barcelona's 2020 rent freeze, some landlords took flats off the rental market or turned them into short-term tourist rentals [2].
• Regulatory uncertainty: rules that change often discourage builders [2]. The IMF says affordability has worsened and that more supply is the main remedy [4].
• Insider–outsider divide: existing tenants gain, while young newcomers face fewer and costlier listings.
• Indian parallel: 20 states still had rent control laws in 2021. The Economic Survey 2017-18 linked such laws to large amounts of vacant urban rental housing [6].

Assessment

• Caps are a valid short-term shield, not a long-term supply policy.
• Removing caps alone will not add homes, because supply is held back by land, permits and legal uncertainty. The IMF wants faster urban development and simpler permitting [5].

Rent control is therefore a stop-gap, not a cure. The way forward is to combine targeted, time-bound caps with faster permitting, stable rules [5] and public rental housing. India's Model Tenancy Act, 2021, which balances landlord and tenant rights [7], fits this model. This mix would protect today's tenants while expanding housing for tomorrow's, in line with SDG 11 and the right to shelter under Article 21.