The paradox of contractual protection: Protecting the weak of today excludes the weak of tomorrow

The Real Conflict: Current Tenants versus Future Tenants

The paper's central thesis is that the main conflict is not between landlords and tenants, but between current and future tenants. The benefit to those who already have a lease is visible, immediate, and politically rewarding. The cost to those who have not yet signed a contract appears later and almost anonymously: less supply, stricter screening, more guarantees required, and greater difficulty gaining access.

Rent Regulation in Spain: The Case of Catalonia and Law 12/2023

Spain offers a particularly clear case. Arruñada argues that since 2020 a familiar sequence has been reinforced: relief is granted to existing contracts, the cost is shifted off the budget, and tomorrow's rental market is left to absorb it. In Catalonia — the first region to apply the new framework under Law 12/2023 and to declare itself a stressed-market zone — the number of new leases fell 10.8% in 2024 compared to 2023 (14.9% in the city of Barcelona alone), while average annual rent rose 1.1% across Catalonia and 1.0% in Barcelona, according to the official security-deposit registry of Incasòl cited in the paper. The available evidence also points to a more pronounced effect on the contraction of supply and new leasing activity than on price containment.

What Contractual Protection Is Legitimate and What Distorts the Market

The paper does not argue that all contractual protection is harmful. It draws a distinction between guarantees that facilitate contracting ex ante and mandatory, retroactive rules that rewrite already-signed contracts or impede their performance. The problem arises when a structural problem is addressed through emergency decree or provisional rules with immediate effect, and the cost is imposed on one party to a private contract. That approach allows policymakers to display visible relief starting today, while transferring legal uncertainty and supply contraction to the market.

Efficient Housing Policy: Direct Public Support and Supply Expansion

This leads to the practical principle the paper proposes: if society wishes to help a vulnerable household, it should do so through public funds rather than by shifting costs onto specific landlords. Emergency assistance, under this logic, must be personal, temporary, and conditional. Ordinary contracting, by contrast, requires general and forward-looking rules, prompt enforcement, and strict limits on retroactivity.

The paper further emphasizes that the other major task lies on the supply side. Land availability, permitting, administrative timelines, judicial timelines, and the tax treatment of residential mobility continue to hold back the expansion of the rental housing stock. As long as that bottleneck persists, any attempt to redistribute scarcity by decree will tend to tighten access for those entering the market from the weakest position.

In sum, the paper argues that many housing policies fail not from bad intentions but from a political equilibrium that rewards immediate relief while concealing its future costs. In this domain, protecting today's vulnerable renter at the expense of contractual integrity may mean shutting tomorrow's vulnerable renter out of the market altogether.