Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/248999 
Year of Publication: 
2021
Series/Report no.: 
CESifo Working Paper No. 9454
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We use a quantitative spatial equilibrium model to evaluate the distributional and welfare impacts of a recent temporary rent control policy in Berlin, Germany. We calibrate the model to key features of Berlin’s housing market, in particular the recent gentrification of inner city locations. As expected, gentrification benefits rich homeowners, while poor renter households lose. Our counterfactual analysis mimicks the rent control policy. We find that this policy reduces welfare for rich and poor households and in fact, the percentage change in welfare is largest for the poorest households. We also study alternative affordable housing policies such as subsidies and re-zoning policies, which are better suited to address the adverse consequences of gentrification.
Subjects: 
rent control
housing market
gentrification
JEL: 
R00
R21
R30
R31
Document Type: 
Working Paper
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