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Rent control
By JohnCrane
What is rent control?
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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.
Price Ceiling
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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.
When did rent control start?
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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
Places where rent control in in
effect.
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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.
How can rent be increased?
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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.
Effects on the housing of rent
controlled units
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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.
Summary
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Rent control is bad ?
Rent control is good?
Works Cited
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http://www.econlib.org/library/Enc/RentControl.html
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