By: Andres Torres, 2L
In December 2023, Argentinian President Javier Milei repealed Argentina’s rent control laws, a major step in his neoliberal reform agenda. Enacted in 2020, these laws sought to cap rent increases and protect tenants by mandating tenant-controlled leases for a minimum of three years. However, unintended consequences soon developed: landlords rapidly withdrew properties from the rental market, leading to a 45% drop in rental availability. President Milei’s decision to repeal rent controls has led to an immediate surge in supply, especially in Buenos Aires, where availability and lower real prices flourished. The market-oriented approach has triggered a rental-market boom in the Argentinian capital, namely a 170% increase in rental availability and a 40% drop in real prices, adjusted for inflation. Milei, an avowed libertarian, favors minimal government intrusion into economic matters and endorses policies that promote private exchange free from state control.
These market-oriented reforms offer important lessons in the ongoing and rapidly evolving housing debates in the United States. Despite the immediate success in Argentina, leading American economists and advocacy groups highlight challenges that low-income tenants face due to market forces and rent control’s efficacy in protecting poor and working-class citizens. Neoliberal free-market advocates argue that state-enforced rent control distorts private markets by stymieing investment and reducing supply. On the other hand, rent control’s social impacts are significantly complex. While many tenants benefit from increased availability, renters in housing markets across the United States have been battered by historic inflation. Rent control proponents argue that deregulation and the inherent power imbalance between tenants and landlords only exacerbate the strain on renters, who are squeezed by rising costs.
Milei’s free-market reforms resonate with the emergent YIMBY (Yes In My Backyard) movement in the U.S., which advocates for widespread deregulation to increase the housing supply. Former President Trump’s and Vice President Kamala Harris’s respective platforms similarly support building millions of housing units through significant deregulation, subsidizing demand, and reforming zoning laws to address the housing shortage.
Both Trump’s and Harris’ platforms align with Milei’s policies, notably omitting rent control and adhering to the belief that increased supply, driven by market forces, is the key to lowering housing prices. Critics, however, argue that deregulation risks displacement and overdevelopment, as seen in Argentina, where some low-income renters have been priced out of newly liberalized markets. This counterargument reflects the concerns of the NIMBY (Not In My Backyard) movement, which prioritizes preserving communities’ historic resources and protecting incumbent residents over market-based solutions.
Argentina’s repeal of rent control offers a compelling case for free-market housing reform. The housing supply has increased, exerting downward pressure on prices, but concerns have also been raised about affordability and displacement for vulnerable tenants. As U.S. policymakers confront their housing crisis, Argentina’s experience provides a useful illustration of both the promise and the risks of market-driven solutions.
