According to the study, rent control may offer short-term relief, but it is ultimately detrimental to future generations, who are increasingly confronted with a limited housing supply and rising costs.

Marli Fernandes, one of the researchers responsible for the project developed by Nova SBE Economics for Policy Knowledge Centre together with the Fundação Calouste Gulbenkian, has stated that the policy is not only “generationally unfair” but also compromises the rights and needs of future generations.

Fernandes explains that while rent control temporarily enables individuals with lower incomes to secure housing, it inadvertently reduces future rental availability. Tenants tend to stay in their homes long-term, leading to fewer rental offers and an increase in rental prices. She compared the situation with San Francisco, the North American city, which underwent a strict rent control in the 1990s and consequently saw a decline in rental offers when landlords were discouraged from putting their apartments on the rental market.

Rental homes have halved since the 1960s

In Portugal, the percentage of rental housing has fallen to less than half since the 1960s, according to the 2021 Census. With less supply, prices consequently increase.

It is still common to find older properties, often still occupied by long-term tenants, with low rent, and newer contracts continue to have significantly higher rates. The data presented in the study show that about 70% of Portuguese people pay less than €400 per month. In Lisbon, almost half of rental contracts fall under this category, as most contracts were signed before 1991. As a result, roughly 30% of tenants in Lisbon pay less than €200 per month. Similarly, in Porto, about 45% of people pay under €200 for rent.

While previous generations had access to affordable housing, younger generations are now only offered high prices for rental contracts, with 29% of contracts exceeding €650 and 10% exceeding €1,000.

The study recommends ending rent control

Researchers point out that countries like Finland liberated the rental market to boost the housing supply and, simultaneously, developed support measures for vulnerable families and increased the social housing stock. This is what the Nosa SBE study recommends - first, identify and support vulnerable families to afterwards liberate the market.

Portugal is at the bottom of Europe in terms of public housing stock, which represents only 2% of total homes, in contrast with Sweden, where 40% of homes are social and cooperative housing, according to a comparison between 13 countries.