The article discusses rent control as a measure to limit rent increases in areas with high housing demand. It reviews a study by PriceHubble, analyzing rental ads in various French cities and comparing those with and without rent control since 2021. Findings indicate that the decline in available rental properties is similar in both types of cities, largely due to rising lending rates, while rent increases have been more moderate in controlled areas, demonstrating rent control’s effectiveness.
Rent control serves as a regulatory measure aimed at capping rent increases in regions where the real estate market is under significant pressure, meaning the demand for housing greatly surpasses the available supply. This regulation establishes a maximum rental price that landlords are permitted to charge their tenants when leasing a property or renewing a rental agreement. The ceiling is based on a median reference rent identified in the specific area. There are also defined thresholds for rental prices, including a minimum rent (30% below the reference rent) and a maximum rent (20% above the reference rent). The foremost objective of rent control is to enhance the financial accessibility of housing for tenants by curbing speculative rent hikes.
Analysis of Rental Listings
The research teams at Price Hubble conducted an analysis of thousands of rental listings sourced from major property websites, such as Se Loger, Bien d’Ici, and PAP. The study focused primarily on smaller properties (T1 and T2), which are the most desirable among renters. Using this data, Price Hubble assessed the trends in the availability of rental properties from the first quarter of 2021 through the second quarter of 2024 across three categories of cities: those with existing rent control (e.g., Paris, Lille, Lyon, Bordeaux, Montpellier), those seeking to implement it (e.g., Marseille, Rennes, Grenoble), and those with no current plans for rent regulation (e.g., Toulouse, Nantes, Strasbourg, Tours). This approach allows for a comparative analysis of the decrease in rental listings in cities with and without rent control since 2021.
Identifying the Real Issue
Is rent control genuinely detrimental to the rental market, leading to a significant reduction in available properties? “If that were the case, we would anticipate a more considerable drop in rental supply in recent years in cities enforcing it,” explains Loeiz Bourdic, chief product officer at Price Hubble. “However, our findings reveal a different story, as the declines in available listings are similar in cities with rent controls and those without.” For instance, in major student cities with rent control, there has been a significant decrease in rental availability—down 35% in Lille, 37% in Lyon, 50% in Bordeaux, and 37% in Montpellier since 2021. Yet, these drops align closely with trends in cities that do not have rent regulations. “The substantial decrease in rental property numbers does not appear to be directly related to rent control,” Bourdic adds. “Instead, it correlates more closely with rising lending rates, which hinder first-time buyers from entering the housing market and thus result in fewer units being vacated for rent.”
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In contrast, Price Hubble’s research suggests that rent increases have been more restrained in communities with rent control. In cities that implement this policy, median rents have risen between 5% and 11% since 2021. Conversely, several cities without rent control have experienced sharper increases, such as Marseille (+15% since 2021), Rennes (+17%), and Brest (+20%). These findings further demonstrate the effectiveness of rent control measures.