The end of Oslo's rent control: Impact on rent level

Abstract

Rent control provides an opportunity to study policymakers' ability to control prices on a large scale, in a sector that has significant welfare effects. We investigate the removal of rent control in the Norwegian capital Oslo in 1982 using a long dataset, with observations from 1970 to 2011. This allows us to exclude business-cycle fluctuations and ensure that the market and rent level are no longer affected by the rent control, and that rent has reached a new long-term equilibrium. We do not find that the removal of the rent control led to an increase in private rents in Oslo. It would appear that landlords' asking rent was equal to the market clearing rent in both the period with rent control (1970–1981) and that without rent control (1982–2011). The rent control in Oslo did not have the desired welfare distribution effects.