Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/331805 
Year of Publication: 
2025
Series/Report no.: 
DIW Discussion Papers No. 2143
Publisher: 
Deutsches Institut für Wirtschaftsforschung (DIW), Berlin
Abstract: 
We study how rent control and housing rationing shape housing investment and market tightness in Geneva using a VAR on annual data (1994-2022) with generalized impulse responses and Granger causality. We find that housing rationing functions as abinding quantity restriction as it precedes a contraction in new institutional construction and Granger-causes lower vacancy rates. This increased scarcity is an effect amplified by persistent positive net migration. At the same time, housing rationing redirects capital toward the intensive margin as both institutional and private investors shift to stock-preserving renovations. Primarily operating through the price channel, rent control induces a transitory, statistically significant rise in private renovation investments and compliance-salient upgrades, rather than sustained new-build activity. Across both instruments, the dominant margin of adjustment is short-run renovation by private owners and institutions, not additions to stock. The policy implication is clear: without complementary, density-enabling approvals and a reduction in rent control, government regulation will continue to reallocate investment from new construction to renovations. This will tighten utilization and increase scarcity in an already demand-pressured market.
Subjects: 
rent control
housing rationing
real estate finance
construction investments
JEL: 
C32
O18
R31
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.