Pros And Cons Of Rent Control
Over the years, there has been many debates over whether rent control benefits the economy, tenants, or landlords. This is a tricky subject, because not every group will benefit at the same time, it is a balancing act with the tradeoffs that occur. Rent control can be defined as “a system in which the local government system is in charge of determining how much rent can be charged for an apartment unit, or house” (Rent Control). If you ask an Economists there opinion on the situation, they will often criticize rent control, arguing that it is a highly inefficient way to help the poor raise their standard of living (Mankiw 115). Economists are essentially unanimous in concluding that rent control is destructive (Block), but some economists fail
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One of the very first things that we discussed in class, was Principle One informing us that “There Ain’t No Such Thing as a Free Lunch” (Mankiw 4), in order for a person to get something they want, there has to be a tradeoff, it is inevitable. People want to have their cake and eat it too, but do not realize what else they may be giving up in …show more content…
If rent is established at less than equilibrium levels, then the demand will ultimately exceed the amount supplied causing the market of those with the willingness to pay to shrink (Mankiw 136). Because of the incentives it creates, Rent Control has turned landlords into a new profitable profession. Peter Dreir an Occidental College professor and housing specialist made the statement, “Landlords won’t walk away as long as they are making a decent return” (Frank). Drier’s statement is very accurate, Residential landlords are not very mobile: they tend to have a long-term interest in their properties, only abandoning then when market rates fall below a certain level due to crime, poverty, or an economic depression. A landlord is just like any other person with a job, if you are satisfied with the return of your profession, then you will stay.
Though many will not like it, Rent Control is actually a feasible solution With Rent Control, at some point everyone will benefit from it. The economy gains from it since people are able to have money to spend elsewhere in the community, many tenants benefit from the law since it puts them first in the order of service, and landlords are able to earn a steady flow of profit from
One of the very first things that we discussed in class, was Principle One informing us that “There Ain’t No Such Thing as a Free Lunch” (Mankiw 4), in order for a person to get something they want, there has to be a tradeoff, it is inevitable. People want to have their cake and eat it too, but do not realize what else they may be giving up in …show more content…
If rent is established at less than equilibrium levels, then the demand will ultimately exceed the amount supplied causing the market of those with the willingness to pay to shrink (Mankiw 136). Because of the incentives it creates, Rent Control has turned landlords into a new profitable profession. Peter Dreir an Occidental College professor and housing specialist made the statement, “Landlords won’t walk away as long as they are making a decent return” (Frank). Drier’s statement is very accurate, Residential landlords are not very mobile: they tend to have a long-term interest in their properties, only abandoning then when market rates fall below a certain level due to crime, poverty, or an economic depression. A landlord is just like any other person with a job, if you are satisfied with the return of your profession, then you will stay.
Though many will not like it, Rent Control is actually a feasible solution With Rent Control, at some point everyone will benefit from it. The economy gains from it since people are able to have money to spend elsewhere in the community, many tenants benefit from the law since it puts them first in the order of service, and landlords are able to earn a steady flow of profit from