Mapping Out Rent Controls Across Europe (2024)

FAQs

How does rent control work in Europe? ›

Rent control policies in Europe vary widely between countries. Some countries, such as Germany and Sweden, have strict regulations in place to limit rent increases. In Germany, for example, landlords can only raise rents by a certain percentage each year, and in Sweden, rents are set by local governments.

Rent control reduces the supply of decent housing, as landlords would rather convert a building to condos or adapt it to commercial use than abide by a law that limits their profits. Investment in new rental housing screeches to a halt.

In a rent-controlled property, tenants won't have to worry about paying more than the city deems appropriate. The rent will be capped at the maximum, and any rent increases will be limited to the levels that the municipality has set. This can make rent payments more predictable for tenants.

Although rent control has been shown to increase stability and affordability for tenants in controlled units, some studies have found that these benefits are offset by greater costs in the uncontrolled rental market because of reductions in the overall supply of rental units.

Sweden has the strictest rental regulation system compared to Germany, the Netherlands, Spain, the UK, and France Kettunen & Ruonavaara, 2021; Lind, 2001).

Although rent control does decrease housing costs for some low income households, the savings from living in these units tends to accrue disproportionately to: 1) households who happen to be in the right place at the right time; and 2) households in higher income brackets with greater ability to secure and remain in ...

At the ceiling price, the quantity demanded exceeds the quantity supplied. Rent controls are an example of a price ceiling, and thus they create shortages of rental housing.

Thirty-seven states either prohibit or preempt rent control, while eight states allow their cities to enact rent control, but have no cities that have implemented it.

Rent control measures appear in various forms across Europe, ranging from strict caps on the initial rent that can be charged under a tenancy, or measures that allow free negotiation of the initial rent but moderate any rental increases.

Why do economists usually oppose rent controls? ›

As any Econ 101 student can tell you, rent control is bad. This is because rent control is a price control, and price controls artificially distort well-functioning markets, resulting in a mismatch between supply and demand and the creation of the dreaded deadweight loss triangle all budding economist learn about.

Economists generally have found that, while rent-control policies do restrict rents at more affordable rates, they can also lead to a reduction of rental stock and maintenance, thereby exacerbating affordable housing shortages.

Well, generally, rent control doesn't have a fan club among economists. Most surveys of academics find large majorities reject it as a desirable policy, mainly on the grounds that it tends to reduce the supply of rentable accommodation and lower its quality.

The goal of rent control is primarily to help the poor by making housing more affordable.

Rent control decreases landlords ' profits and subsequently lower their incentive to invest in property upkeep. Rent - control laws incentivize the development of upscale housing instead of low - income units. Rent - controlled units have a high ownership turnover rate.

In 2015 they introduced rent controls – Mietpreisbremse – that mean landlords cannot extend rents beyond 10 per cent of the current rent index for their neighbourhood, a rate set by the local government. This has been set in law until 2025.

No rent controls in England - government confirmation.

Legally, your landlord cannot increase your rent within the first 12 months of your tenancy contract, or by more than 20% (15% in some federal states) over a three-year period. Some landlords, therefore, charge “stepped rent” (Staffelmiete), that increases gradually over time.

Sweden has had rent control regulations since 1917 with less than two decades of pause between the First and Second World War.