The second most important argument for the non-implementation of the rent control policy relates to the quality of the lodgings. They have two sub-arguments for claiming that the quality of the housing in a rent controlled area is poorer than the quality of the housing in an uncontrolled area. Firstly, in a rent controlled area owners may not receive sufficient money in order to satisfactorily preserve edifices. This leads to the existence of run-down, below standard housing. Secondly, since the supply is continuously low, owners may not be troubled by occupants parting, thus leading to slight or no motivation at all to preserve the property, letting the building to deteriorate itself and blaming it on the lower rental income.
Moving on to another important negative effect, we can notice that rent control policy constitute the main reason for turning away new construction. Banks and owners are afraid to invest in the building of new edifices either because they are afraid that only a few years after the construction of new buildings, these will enter under the rent control policy or because they are to a certain extend sure that they will not be able to reimburse their investment.
Fourthly, due to the fact that the rents are low, rent-controlled housing are held responsible for the complicatedness of finding available accommodation, thus resulting in a power disproportion among landowners and renters. Moreover, due to the fact that renters are acutely underprivileged if they have to change their residence, landowners can impose various conditions and requirements.
Finally, the last argument comes in opposition with the initial idea of rent control regulation. Especially in New York, numerous people rent out their rent controlled apartments in order to make a profit. Moreover, "a rent control board or regulatory agency may be captured or politically influenced by the land owners, and may be able to influence the regulatory process or 'game the system'." This influence would be obvious in such a way that an increase in the rent-controlled areas would make the rent achieve higher rates than "
Last but not least, people opposing this policy have one important quote in their favor, although it is not strictly about American Cities: "Speaking in 1989, Vietnam's Foreign Minister Nguyen Co Thach said: 'The Americans couldn't destroy Hanoi, but we have destroyed our city by very low rents. We realized it was stupid and that we must change policy."
If we try to summarize the ideas of this research we will see that there are important pros as well as numerous cons against the rent control policy. The general idea of the implementation of this policy is that it is not economically productive, resulting in disequilibrium in the market rather than tending towards a balanced market. However, the government sustains that if we were too think at such small scale we are not taking in consideration all the advantages of such a policy at a national level, advantages which outweigh the individual shortcomings.
In order to consider some possible adjacent means to tackle this sensitive situation a number of specialists have considered the following: as a replacement for of urging a sudden termination of controls, they have considered merely to permit property-owners to "buy tenants out of their controlled dwellings." This proposal is, however, seen as ridiculous and absurd at the same time due to the fact that the number of renters is bigger than the number of property-owners. Moreover, tenants consider that the rent control policy is on their side, thus they will devote substantial political energy in preserving the regulation.
However, this buying off does not assure property owners that a new rent control policy will not appear in the future. According to the same specialists, the safest way to hearten private investment is to signal investors that...
They were unable to pay their rent and keep their apartments or homes, so the government stepped in and put a ceiling on the price that their apartment or home could be preventing military families from being ousted. Today, rent controlled apartments for individuals that qualify are still allowed to live in rent controlled apartments because price ceilings still exist in this particular example. Though, the price controls that the
This is because a) these people vote and b) sometimes these people are the current occupants and may be out of the economy -- seniors especially. Thus, while some people can afford rent increases others cannot. A politician seen as throwing octogenarian widows onto the street is going to have trouble getting elected. Thus, we have the introduction of rent controls because natural market outcomes are socially undesirable. 3. Where I
If regulation upon the monopoly did not exist, the monopolist could charge whatever price it desired, so long as people did not stop buying the product altogether. A monopoly means that a company has no rivals in the market producing the same or a similar product and there are few comparable goods and services that act as substitutes. For a necessary good or service (such as transportation or utilities)
Price Ceiling and Demand/Supply EquilibriumIntroductionPrice ceilings are government-imposed limits on the maximum price that can be charged for a good or service. They are typically implemented to protect consumers from excessively high prices, particularly in markets for essential goods and services such as housing and food. However, the consequences of implementing price ceilings are not always straightforward and can lead to both positive and negative outcomes. Likewise, the concept of
The other impact is that, the quantity of sugar that is traded will rise, however the price will depend on the fall caused by subsidy enabling people to switch away from the sweetness of sugar. The chances that might arise is that, the price of the sugar will end up getting lower and lower than the pre-subsidy level. Discussing how, ceteris paribus, would affect the market for coffee If coffee is
Productivity can also be influenced by tax cuts. Cutting taxes can enable consumers to buy more goods and services, and enable companies to produce more and to invest more in their enterprises. Productivity can also be limited or enhanced by regulation. In the short-term, less regulation tends to increase productivity but makes prices and wages less stable. In the long run, not enough regulation can have a counter-productive effect, as
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now