When Leases get Longer: The Impact of Tenure Security in Rental Markets

Abstract

Housing affordability has become a first-order concern in many parts of the world, with the problem being particularly acute among renters. This has increased the interest in rental market regulations to protect tenants. In this paper, we study a reform in Spain that in 2018 increased the length of rental leases from 3 to 5 years for private landlords and from 3 to 7 years among corporate owners. Using administrative data on the universe of rental agreements in Catalonia, we study the effects of the reform on rental markets using differences-in-differences and regression discontinuity designs. Our preliminary findings indicate that the reform was highly effective in increasing tenant security while having no (or minimal) effects on supply. We do not find evidence that lease length conditions capitalize into rental prices. Joint paper with Alessandro Ciardo, Rodrigo Martínez-Mazza and Mariona Segú.