Spatial misallocation and rent controls

Guillaume Chapelle, Etienne Wasmer, Pierre Henri Bono

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

In many global cities the rental housing market is partially regulated. We document that the Paris housing market is dual: a flexible rent sector coexists with a large controlled rent sector. The two sectors have very different rent gradients towards the center of the agglomeration. We develop a model explicitly accounting for these features which allows to investigate general equilibrium effects of rent controls at the city level. In this framework the coexistence of a controlled and flexible rent sector increases the spatial misallocation of households. This mismatch can generally be alleviated by an improvement in urban transport infrastructures.
Original languageEnglish (US)
Title of host publicationAmerican Economic Review, PAPERS AND PROCEEDINGS
Place of Publicationpp. 389-92
Pages389-92
Volume109
StatePublished - May 1 2019

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