rent control
In theory rent control sounds like a perfect way to help the poor by setting the price ceilings on the rent, but in reality it only will hurt them. In the real world rent controls do not work like most people would expect them to, maybe its because not many people had their lesson in economics. Controls on rent will lead to less efficient allocation of scarce resources, and people at the top of the economic ladder will not be hurt. Only those at the bottom of the economic ladder will be hurt because even with price ceilings bottom ladder of the society is still not participating in the market. Instead of trying to transfer wealth from landlords to tenants, people at the lower ladder should be helped by allowing them to participate in the market just like the rest of economic society. The effects of the rent control will be shortages; higher prices and landlords would eventually allow their buildings to deteriorate, this is the time where government should let the "invisible hand" do its job and let the supply and demand determine the price of rent. Rent control has been enforced in many major American cities for many decades. The best know examples of rent control are in New York, which still has rent control from the temp
orary wartime price controls imposed during World War II. Boston implemented rent control during the inflation years of 1969 through 1971. All these problems are effects of the black market, and when apartments in regulated parts are taken up people are forced to search for the apartments in the black markets or so called "shadow market". As we learned in our economics class people respond to incentives, when costs and benefits change the behavior of landlords will also change. Even though rent controls were becoming very popular some cities still remained immune to this temptation. In reality none of this occurs if the rent control is abolished, rent prices will rise but it will stimulate the incentive for the construction of new apartments. The majority of people who vote are middle and upper class people, so when time comes to vote middle and upper class tend to oversee the problems of rent control and they don't include these facts when choosing a politician to vote for even though that potentially future politician maybe promising to bring rent controls with when he or she is elected. I would be very angry to see tax money that we pay go to subsidizing rent of low income families, but after learning more about this problem I realized that benefits in the long run would not only be great for the low income families and myself but also for the society as a whole. I have tried to come up with some solutions to replace rent controls and the ones I came up with are very simple. Then government could pay for the interest while families could be paying off their loans without any pressure of high interest rates. Also when landlords have such long waiting lists they have no incentive to fix anything that breaks in their apartments because they know that if the tenants move out they will be easy to replace. In addition the costs of rent control usually will fall on other taxpayers, because when landlords start losing money they get their property assessments lowered. This unregulated portion will become the "shadow market". If the government is unsuccessful in subsidizing supply that has been lost due to market regulations, black markets will arise.
Common topics in this essay:
Urban Economics,
Third Law,
,
War II,
rent control,
rent controls,
low income families,
income families,
economic ladder,
low income,
price ceilings,
economic ladder hurt,
ladder hurt,
participate market rest,
waiting lists,
participate market,
lower ladder,
price ceilings rent,
bottom economic ladder,
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Acceptance Essays
