Public intervention in the rental housing market: a review of international experience

In recent years, residential rental prices have experienced remarkable growth in many of the major metropolitan areas of advanced economies. On occasions, these increases in rental prices have caused a significant increase in the cost of rental housing in the household consumption basket and difficulties in access to housing for certain groups. In this context, there has been a resurgence of the debate about the role of public policies in the rental housing market, designed to mitigate both the problems of access to housing and the potential negative effects of the growth of rental prices on workers’ mobility or on the macro-financial stability of the economy. In this paper we review the main instruments of public intervention in the residential rental market, in the light of international experience among the main advanced economies. Broadly speaking, the different policies can be classified into three main groups: rent controls; public provision of rental housing; and a wide range of heterogeneous measures aimed at both incentivising the supply of private rental housing and containing the increase in household spending caused by rising rents. The experience accumulated over decades in the development of these policies and the increasing availability of quantitative evaluations of their impact illustrate some of the implementation challenges presented by support policies for residential rentals, as well as the wanted and unwanted consequences associated with this type of intervention.