Javier Milei Ended Rent Control. Now the Argentine Real Estate Market Is Coming Back to Life.

Martín López is an Argentine landlord, but in recent years he felt more like a nervous fugitive. Now based in Madrid, he spent much of 2022 and 2023 mired in anxiety and paperwork—not because he did anything immoral, but because Argentina's rental laws made being a landlord a liability.

"Martín López" is an alias. Until late 2023, he rented out his two-bedroom apartment in Buenos Aires' upscale Belgrano neighborhood through a tangle of short-term contracts, never fully sure whether his actions were legal. Argentina's 2020 rent control law, repealed by President Javier Milei in December 2023, had loaded aboveground landlords with unbearable risks.

Many like Martín fled the formal rental market into legal limbo. Empty apartments, housing shortages, and backroom deals defined the sector in Buenos Aires. Tenants scrambled for scarce formal leases, while landlords twisted themselves into knots trying to extract value from their properties without breaking the law.

While planning his move to Spain, Martín wanted to rent out his apartment without dealing in pesos, Argentina's ever-devaluing currency. "After consulting with five or six brokers, they told us the best option was to do 'temporary,' Airbnb-like contracts," he explains.

That workaround brought its own headaches. "Once I left for Madrid, I had to sign a legal document to authorize my mother to sign these contracts on my behalf, as they had to be signed in person every three months." By leasing in dollars and repeatedly renewing contracts with the same tenants, Martín was sidestepping the rent control law—a move that explains his reluctance to reveal his identity. One contract dispute with tenants would have brought him all sorts of legal problems.

Since Milei repealed Argentina's rent control regulations, Martín's desirable apartment, and thousands of others like it, have found a stable footing in a growing formal sector. "The ability to sign contracts in any currency and to any length reassured us that we can rent our place legally," he says. When his tenants, escapees of the Russia-Ukraine war, confirmed they would also prefer to junk the hassle of renewing leases every three months, the apartment reentered the formal market.

Across Buenos Aires and beyond, Milei's deregulation has vastly improved the rental landscape for tenants too. Just 18 months ago, Bruno Panighel, a 29-year-old financial consultant from Córdoba, was struggling to find an apartment with his girlfriend. "I set alerts on all of the major rental websites of Argentina. You could barely find a hundred one- or two-bedroom apartments in all of Buenos Aires," he recalls. Worse still, the few options available were painfully expensive. "Prices were so high that in many cases it was cheaper to live at a hotel. I made the calculations myself," Panighel says.

With the 2020 rent control law now scrapped, apartments have poured back into Buenos Aires' rental market, offering a plethora of new options. On Zonaprop, one of Argentina's largest real estate platforms, traditional rental listings have skyrocketed—from 5,500 before the reform to 15,300 today, a staggering 180 percent rise. A third of that increase occurred within just one month of Milei's deregulation.

Real (i.e. inflation-adjusted) rents have fallen, short-term workarounds are declining, and tenants are finding properties suited to their needs. Panighel and his partner now live in a two-bedroom apartment with a long balcony under a yearlong lease. Slowly but surely, the city is coming back to life for those seeking a place to call home.

Argentina's Tenancy Rent Controls Experiment

In 2020, as the pandemic raged and economic uncertainty loomed, Argentina's Peronist government introduced sweeping controls over both rental prices and lengths of tenancies. The idea was to provide renters security against unexpected, sharp rent hikes.

But the rules were stifling. Tenancies had to last at least three years, and annual rent increases within those contracts were capped to a weighted average of inflation and wage growth; the figures were calculated by Argentina's beleaguered central bank. While landlords could reset rents between leases, ejecting a tenant early was virtually impossible. Worse, rents had to be paid in pesos—a currency in free fall, suffering spiraling inflation.

On paper, these controls didn't look as draconian as older forms of rent control, where prices were held below market rates perennially. After all, landlords could reset prices every three years. In practice, these price controls and mandatory minimum contract lengths created huge new risks for landlords. Got an undesirable tenant? Or maybe your property's rent is lagging as market demand surges? Tough luck. You were stuck with your three-year contract and with rents increasingly divorced from the property's value.

Faced with these risks, marginal landlords naturally decided to sell properties, transform them to short-term Airbnb-style rentals outside of the controls, take their chances with illegal arrangements, or leave units empty. In all cases, the result was the same: fewer homes available for formal rent.

High and rising inflation supercharged these risks. With prices accelerating, landlords would ordinarily seek ways to hedge against depreciating real rents—whether by charging in dollars or revising rent levels more frequently. But the law prohibited both payment in other currencies and rent increases more than once per year, tying rents to a wage-inflation index that never reflected reality. The only way to get ahead was to set initial rents higher, second-guessing future inflation.

The controls not only meant that landlords lost out in hot housing markets with high demand; the regulations also exposed them to devastating losses when inflation outpaced their expectations. Argentina's official annual inflation rate rose from 36 percent in 2020 to 51 percent in 2021, then to 95 percent in 2022 and a staggering 211 percent in 2023. That meant many landlords were getting far less in real terms than they bargained for year after year.

For Soledad Balayan, a real estate broker in Belgrano, the impact of the controls became evident quickly. Balayan had created a rental supply index in 2012 based on data from Zonaprop. The chilling effect of rent controls soon showed up in her clients' decisions and those statistics.

"The law caused a lot of fear into both owners and tenants," she explains. "Ours is a family business which has been going on for 50 years. Clients who had been with us for all of their lives were suddenly leaving us because they did not want to put their property on the market. These were usually people who had bought an apartment as a way to save."

In a country without sophisticated financial markets, and where unexpected inflation often erodes savings, property ownership is a popular path to economic security. But rent controls made renting a bad option for owners. Balayan's data showed that from June 2020, when the law took effect, to December 2023, when Milei repealed it, long-term rental listings for apartments on Zonaprop plunged 53 percent. Landlords weren't just nervous—they were fleeing the market.

"Many clients were leaving us for Airbnb, which was more attractive," Balayan adds. Short-term rentals allowed landlords to charge in dollars and replace tenants every few months, dodging the rent control regime. In 2019, Buenos Aires had 10,000 properties listed on Airbnb; by January 2024, that number had exploded to 29,500.

Meanwhile, landlords flooded the market with properties for sale—instantly reversing the COVID-19 pandemic's initial chill on supply. Balayan's index showed apartments listed for sale spiking 63 percent above their COVID-era low by the summer of 2022, with the increase beginning as rent control was introduced.

Empty properties abounded. By February 2023, data from the country's state energy regulator revealed one in seven properties in Buenos Aires had energy usage so low they were presumed vacant. This hollowing out left tenants scrambling to secure housing. Many resorted to temporary contracts outside the law's scope.

Panighel and his girlfriend's experience highlights the compromises required to secure even a temporary rental. "At 8:30 a.m. on a Saturday morning, I received an alert of a new listing….I called the realtor immediately," he remembers. By Monday, they had paid for the contract to start that very same day, "even though we still had 20 days left at our place."

The workarounds weren't just expensive—they were absurd. Although their landlord was happy to rent the apartment for a year, the law banned that arrangement. So the pair ended up signing four rolling three-month contracts in advance, alternating which of the couple was legally the tenant. Every quarter, they visited the realtor to destroy the expired contract. It was mere formality, part of a gentleman's agreement to mimic a yearlong lease. Yet the process brought constant anxiety. "We never actually had the certainty that he would honor the contracts we had signed in advance," Panighel admitted. A law meant to provide security for tenants had instead delivered unnecessary uncertainty.

Panighel's ordeal was far from unique. Valentina Morales, a 28-year-old economist and influencer, could barely find any properties online when moving to Buenos Aires from Rosario, Argentina's third-largest city. "At one point, around October or November of 2023, I think I saw 12 apartments advertised in the entire Palermo neighborhood," she recalls, a district with nearly 250,000 residents, per the 2020 census.

While her family had a property in the city and she could eventually live there, she sought a stopgap rental for a year—an option the minimum tenancy length regulation had eradicated. She ultimately turned to the short-term rental market. "Between July and December, I lived in three different apartments, which I was able to find only through contacts or even by asking for help on X," Morales says.

To protect themselves against near-term inflation losses, even these short-lease landlords demanded payment in dollars. "They also wanted a 'property guarantee,'" Morales recalls, requiring tenants to provide the title of a third-party property that could be tapped to finance the fallout of eventual disputes over rent. For those unable to meet this requirement—or to pay the seguro de caución, an insurance policy covering unpaid rent—the options were grim: either move to the city's outskirts or cram into unsuitable shared housing. "It wasn't just me who was not having a great time, but also the owners who didn't want to put their places in the market," Morales says.

The added risk and transaction costs, as well as landlords front-loading rents to protect themselves against accelerating inflation, pushed rent prices for new leases higher. After falling in real terms during 2018 and 2019 and matching inflation for much of the previous decade, rent price growth in Buenos Aires skyrocketed. In 2020, rents grew at 1.7 times the pace of inflation, tracked inflation in 2021 and 2022, and then surged again, as allowable rent increases within tenancies were further restricted to the lower of wage growth or inflation. The Ministry of Deregulation's own data show real rent prices increased by about 50 percent in the Buenos Aires metropolitan area in 2023. The consequence of the uncertainties and costs created by the government capping rent growth in tenancies was to increase rent levels.

The result? The average monthly rent for a new lease on a two-bedroom apartment exploded from 18,000 pesos at the end of 2019 to 334,000 pesos by January 2024—far exceeding the 210,000 pesos if they'd simply tracked inflation. Rent control was paradoxically making ordinary renting a luxury few people could afford.

The biggest victims were the poor, young, and mobile—those unable to afford down payments for purchases or to pony up for the pricier shorter-term dollar rentals. The year-to-year contracts most young renters needed given their ever-changing life plans were just not available.

Milei's Rent Control Revolution

Javier Milei won the Argentine presidential election on November 19, 2023, promising to take his chainsaw to the country's corporatist government. The self-described libertarian had made a name for himself as an economist highlighting the devastating consequences of even well-intentioned interventions. One of his first moves was Decree 70/2023, the so-called Megadecreto, which slashed through decades of interventionist policies. Among its targets: rent controls and mandatory minimum tenancy lengths.

Lucas Llach is a former vice president of Argentina's central bank and an occasional adviser to Federico Sturzenegger, its minister of deregulation. Llach loves the way Milei unashamedly eliminated the rules.

"It was not just that the law was repealed, but also that it was replaced with nothing," Llach explains. The decree left landlords and tenants entirely free to negotiate almost every aspect of their agreements—rent levels, how often rents could be revised, the currency used for payment, and any collateral or guarantees needed. Milei even scrapped the requirement to register rental contracts with the federal government. This freedom created a diverse marketplace where tenants and landlords could forge voluntary, mutually beneficial agreements tailored to their needs.

If tenants value economic security and are willing to pay for it, the market provides it, Llach says. "There is no reason to think that the rent market needs regulation. Rent control laws are usually conceived to protect tenants, but owners already have an incentive to keep them as changing tenants raises their transaction costs." Frequent turnover not only adds costs but increases the risk of expensive vacancies.

Balayan, the real estate broker,is enthusiastic about the newfound flexibility. "The rental market has never experienced such competition between landlords on the supply side, given the variety of rental conditions offered," she wrote in October in La Nación, an Argentine newspaper. "Those looking to rent also benefit from being able to choose the property according to the conditions that are most attractive and beneficial for their particular situation."

The results, Llach says, are "a textbook case" for Milei's deregulatory efforts. Zonaprop's data showing a surge in supply of apartments is no anomaly; the Ministry of Deregulation's report, based on Mercado Libre and Universidad de San Andrés data, shows that by June 2024, the rental housing supply was 212 percent higher than it was in December 2023 in the Buenos Aires metropolitan area.

Even with landlords freed to account for the uncertainties and risks of bad tenants and inflation, real rents have fallen. Zonaprop data shows the average price of a one-bedroom apartment in Buenos Aires increased by 61 percent in cash terms in 2024—about half the inflation rate in that period. The government's data likewise show the real price of renting fell almost 27 percent in the first seven months after deregulation occurred. These results, Llach says, were a "cultural success" for the government. "The effects were immediately seen by everyone and they were all beneficial."

Oscar Scarcella, a 64-year-old lawyer from the coastal tourist hub of Mar del Plata, is one landlord whose decisions were altered by Milei's decree. He owns two small apartments and a warehouse currently leased to a motorcycle repair shop. "The new regulation has changed a situation that disincentivized me from putting my properties on the rental market," he says.

For Scarcella, the flexibility to mitigate against inflation is key—and benefits both landlords and tenants. "The fact that rent prices can now be indexed after shorter time periods is actually good for tenants," he explains, "because it avoids the uncertainty" associated with really dramatic cash rent spikes each year. Previously, landlords had to "cover" themselves against inflation by setting higher initial prices, knowing that agreed rents would quickly lose value. The new clarity around inflation risks has given him the confidence to rejoin the market. "I recently bought a house and I was in doubt as to whether I should sell or rent the one where I was living. Because of the certainty that the new regulation brings, I've decided for the latter."

Behind the aggregate data are thousands of decisions like Martín's and Scarcella's. Tenants are benefiting from the competitive pressure. Panighel and his partner, for example, are no longer trudging to the realtor every three months to renew lease terms for their 750-square-foot apartment. They are on a yearlong contract with the rent level updated every quarter.

Valentina Morales says she thinks the headline figures on rents understate the decree's benefits. Bigger apartments in similar locations in Buenos Aires are being offered for the same cash rental price as this time last year, she says.

Rent decontrol certainly hasn't fixed all of Argentina's housing woes. "Evictions are still difficult to implement," acknowledges Balayan. "That has to do with institutional weakness and the lack of protection for private property." The process requires a judge's order following a lengthy trial, which, according to the president of the Property Owners Chamber of the Argentine Republic, can drag on for up to 18 months. That process still deters many potential landlords from entering the market.

Milei himself has been cautious about celebrating rent decontrol's success. While Milei mentioned it during his congressional opening speech, Llach believes public misconceptions about inflation make officials hesitant to highlight the policy's impact on rents. Cash rents are still rising rapidly, even though real rents are falling—a nuance that's easy to miss. Milei understands that inflation remains the central monster Argentines expect him to slay.

Milei's deregulation demonstrates that removing government from voluntary transactions can benefit both sides. The Argentine experience makes it even more depressing that rent controls are being reintroduced as a policy idea across the Western world, including in some U.S. states and in the most recent Democratic Party platform. If policymakers won't learn from Argentina's experience, then they risk the same dreadful outcomes that Milei's deregulation is reversing—but with fewer excuses for their ignorance.