Monday, May 26, 2008

Rent Controls



INSERT DIAGRAM HERE.

Rent Controls

Many cities in the United States and the rest of the world have rent controls. The primary motive for rent controls is to provide affordable housing for low-income people. Most economists argue that rent controls are a lousy way to achieve that objective.

In their strictest sense, rent controls prevent the owners of housing (typically apartments) from increasing the rent they charge. Rent controls are examples of the type of price controls known as price ceilings. The law does not allow the price to rise above the ceiling.



The rent-controlled price is necessarily below the market equilibrium price. (Otherwise, there would be no need for rent controls.) What does supply and demand analysis suggest about the effect of imposing rent controls?

Suppose that in the absence of price controls a particular type of apartment in New York City would rent for $2,000 per month. Suppose New York has price controls that do not permit the landlord to charge more than $1,500 per month. In equilibrium, the number of apartments supplied at $2,000 per month equals the number of apartments demanded at that price.

At the rent-controlled price, however, the number of apartments supplied is smaller than in equilibrium. (For example, some apartment building owners may decide to convert their buildings into condominiums or office space if they are not allowed to charge the market rent for apartments.) The number of apartments demanded at the rent-controlled price exceeds the number of apartments supplied. The rent controls cause a shortage of apartments.

How well do rent controls achieve the objective of providing affordable housing for low-income people? If someone is lucky enough to have a rent-controlled apartment, they benefit from the policy. In practice, however, many of the people with rent-controlled apartments have middle or high incomes. (The rents are controlled, but the apartments may be available to anyone.)

Interfering with markets by controlling prices can lead to strange results. For example, tenants who want to move might continue to lease the apartment and sublet it at the higher market rate. (Thus the landlord is not receiving full compensation for providing the apartment, and the one who sublets the apartment receives substantial income just for keeping the lease.) Landlords also respond to rent controls by foregoing normal maintenance on the buildings. Landlords also might charge tenants extra fees to try to skirt the price controls and receive something closer to the market rent. Because of the shortage of apartments, many people who want an apartment at the rent controlled price are unable to find one. FEWER apartments are available to be rented with rent controls than without rent controls. Is this what we had in mind when choosing to implement rent controls?

Alternatives to rent controls which might achieve the objective of providing affordable housing for low income people:

• Provide low-income people with more income.
• Provide vouchers that can be used to pay for housing.
• Provide subsidized housing for low-income people.

13 comments:

  1. Depend on person’s wants almost every kind of flat is available for rent worldwide now. The rent is affordable and facilities are good enough. Read this.

    ReplyDelete
  2. this is very information...and thanks for sharing...

    ReplyDelete
    Replies
    1. yes this is very informationing, no probleming

      Delete
  3. ABCworld Provides shared office space in pune and shared office space pune or temporary office space on Rent suitable to your Business in pune at competitive Rates.

    ReplyDelete
  4. Wow! Thank you! I constantly wanted to write on my blog something like that. Can I include a part of your post to my website? kameraverleih

    ReplyDelete
  5. Thanks for your personal marvelous posting! I truly enjoyed reading it, you're a great author.I will always bookmark your blog and definitely will come back later in life. I want to encourage that you continue your great writing, have a nice morning! objektivverleih

    ReplyDelete
  6. When I initially commented I clicked the "Notify me when new comments are added" checkbox and now each time a comment is added I get several e-mails with the same comment. Is there any way you can remove people from that service? Thanks a lot! adelaide apartments

    ReplyDelete
  7. MAKE MORE INCOME" AT "WORLD DATING URGENT HOOKUP"_


    Welcome to World finest, reliable dating agency with good track records. We have a wonderful influential network of clients ranging from government officials, politicians, senators, executive, honorable s, oil barons, money bag business personality, hotel owners and gold men and women, and we have very influential connected sugar mummies/daddies/gay and lesbian all over the world,and if you are an advance man or woman we can help you in hook up with sugar Boy or girl of any age ranging from 18 to any age of your choice,Be among the people to get our exclusive connections. We are the best reliable, efficient in our job, get the opportunity to meet them,now to get connected within 2 hours. We have sugar mummies all over Indonesia,India,Thailand,Malaysia and Singapore,Europe and America who are willing to lavish money on you, with gifts, cars, house and even contracts connections, and even assist you get a job, enter the entertainment industry and fashion industry, and also assist in getting loans, and financial assistance. what they need is sexual satisfaction and they pay for the services

    payment from USD7,000 TO USD 10,000.PER-NIGHT AND WE TAKE JUST A LITTLE CHARGE OF 4% FOR SERVICE CHARGE WE GIVE TO YOU AFTER THE HOOK UP.NOTE:APPLICANT MUST BE ABOVE 18 YRS OLD
    MUMMY AGE 30-65
    .....................................
    CONTACT AGENT: Now for more information:asiasugarmommyhookup@yahoo.com OR whatsapp number : +917838435476

    ReplyDelete
  8. Great post. I was previously checking constantly this weblog and I'm impressed! Extremely useful information specially the closing part :) I maintain such information much. I used to be seeking this particular information for a very long time. Many thanks and best of luck. my sites:.2 bedroom apartments

    ReplyDelete
  9. I never miss any of your blogs I mean the way you write is amazing. Every time I read I learn something new.
    Anybody looking for a
    pg on rent visit Room Soom

    ReplyDelete