Rent control

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Rent control

• By JohnCrane

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What is rent control?

• Laws or ordinances that set price controls on
  residential housing.
• Controls the price for tenants that are living in
  a place by making the price a set amount.
• Establishes a price ceiling.

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Price Ceiling

• Is a government-imposed limit on how high a price
  can be charged on a product.
• This is bad for an economy because it causes a
  shortage in supply and creates an increase in
  demand.
• It moves us away from a capitalist economy and
  more towards a socialist economy.
• Example. Minimum wage laws create a surplus of
  labor.

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When did rent control start?

• It can be seen in the United States after world
  war 2.
• Solders returning home could not afford to pay
  for housing so the government established rent
  control in New York city.
• Rent control is still in place in New York

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Places where rent control in in effect.

• Rent control is usually left up to the state or
  local government
• It is in effect in many major cites such as
• New York city, San Francisco, and Washington D.C.

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How can rent be increased?

• If rent control is in effect rent can only be
  increased by the rate of inflation
• Rent can also be increased if capital
  improvements are made on the apartment or house.

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Effects on the housing of rent controlled units

• Rental units that are under rent control can turn
  into slum apartments and housing.
• There is little incentive for landlords to
  maintain these buildings because of cost/benefit
  ratio.

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Summary

• Rent control is bad ?
• Rent control is good?

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Works Cited

• http//www.econlib.org/library/Enc/RentControl.htm
  l
• http//www.cato.org/pubs/pas/pa-274.html
• http//www.manhattan-institute.org/html/cr_36.htm
• http//en.wikipedia.org/wiki/Rent_control