The supply side effects of rent controls: Evidence from Ireland

We use the introduction of rent stabilisation measures in Ireland after 2016, and their tightening in 2021, to understand the impact of these policies on the supply of rental housing and whether the policies caused properties to exit the sector. We use a district-level quarterly panel 2010-2023 to estimate whether there were market exits by landlords, in particular an increase in sale listings and a decrease in rental activity, after rent controls were applied. Rental activity is measured using both online listings and official tenancy registrations, with further data on room rentals. Our analysis focuses on comparing the rental (or sale) supply on either side of the boundaries within which rent controls applied. Our identification using a regression discontinuity-style approach which limits the sample to specific geographic distances to the border to control for confounding factors. We also control for housing market and wider economic conditions. Across all specifications, we find evidence of exit from the rental market, specifically after rent controls were tightened in 2021: rent controls are associated with more sale listings and fewer rental listings/registrations. The negative impact of rent controls on room rental listings is, likewise, consistent with market exit rather than simply reduced mobility.