The impact of rent control: Investigations on historical data in the city of Lyon

This paper reexamines the debated issue of the effects of rent control policy on the rental market. We investigate the impact on rents of three different forms of rent regulation in Lyon over a 78-year period. We use an original historical data set which allows us to track regulation changes, rent paid, and tenant moves for a long-run panel of flats. Using a difference-in-differences method, we estimate the impact of regulation on rents depending on the type of rent control over different economic periods. Our results show that the impact of rent control deepened over time. Starting with an 11% reduction in rents between 1914 and 1929, it reached a decrease by 47% in the regulated rental market in the 1949–1968 period. We do not find any increase in rents in the unregulated segment of the rental market, which could be a result of a reduction in housing investment in the long run.