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
Some of these solutions might have problems of their own if applied in the real world, but I think that if any individual would be presented with all these facts they would change their minds very quick. I would have supported rent controls if I was presented with this problem in September because I would be thinking without applying economics to this problem. 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. Once in place, rent controls are very difficult to remove from our everyday life. Economists Arthur Nelson's "Nelson's Third Law" states that the worse a government regulation is, the harder it is to get rid of it, can be applied to the rent control. Because when there is a regulation created by a government people will figure out a way to adjust to it and some people will even try to make profit from the situation presented to them. When these groups of people become adjusted they will fight to retain the regulation. If this group of people is the majority of tenants, removing rent control through local political efforts are not very good. After all this information one might be wondering that if these rent controls are inefficient why do politicians have success in passing these laws. One of the reasons brings us back to the fact that rent control hurts poor people more than it does middle class and we know that in controlled market apartments tend to fall into the hands of middle class professionals. 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. Tenants activists argue that if rent controls are removed it will result in increase of rent prices, mass evictions, and increase in the homeless population. 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. As we learned in our economics class people respond to incentives, when costs and benefits ch
Some common words found in the essay are:
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,
Approximate Word count = 1642
Approximate Pages = 7 (250 words per page double spaced)
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