Who, other than the owners of rental units, loses as a result of rent controls?
ID: 1220933 • Letter: W
Question
Who, other than the owners of rental units, loses as a result of rent controls? Who gains form rent controls? What effect would the imposition of rent controls have on the market price of an existing single-family house? What effect would rent controls have on the value of vacant land? Who, other than the owners of rental units, loses as a result of rent controls? Who gains form rent controls? What effect would the imposition of rent controls have on the market price of an existing single-family house? What effect would rent controls have on the value of vacant land?Explanation / Answer
If the rent received by the landlords is controlled and is limited to a maximum amount, it will lead to shortages of houses in the market. Also, landlord will not have the money to keep the property in good condition. This affects the tenants and the entire neighborhood. It retards investment in residential rental units.
Existing tenants are worse off but the sitting tenants who are placed first in the queue are benefited.
It will reduce the price of existing rental units and also deteriorate their quality.
Rent controls also reduced new construction in residential units. So, the value of the vacant land will also decline.
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