Stuart tells his student government representative at his college to propose rent controls on local rental housing as a way to help students afford rental housing. Maria disagrees with Stuart, saying rent controls will make students worse off. Who is correct and why?Economic theory suggests that this policy would harm students as a whole despite the fact that some students who are able to find housing at the reduced price would benefit. Which of the following are some of the offsetting secondary effects of the rent controls that would work to the disadvantage of students?

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16-09-2022
Social Studies

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Stuart tells his student government representative at his college to propose rent controls on local rental housing as a way to help students afford rental housing. Maria disagrees with Stuart, saying rent controls will make students worse off. Who is correct and why?Economic theory suggests that this policy would harm students as a whole despite the fact that some students who are able to find housing at the reduced price would benefit. Which of the following are some of the offsetting secondary effects of the rent controls that would work to the disadvantage of students?

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tutorconsortium344 tutorconsortium344 · Answer 1 · 2022-09-23T12:13:11-04:00

Rent control will be better for the students who can locate a home at a cheaper cost.

But it will be bad for students overall because there won't be as much rental property available, it won't be as good in the future, and it won't be as affordable.

Rent control would reduce market rental costs, which is in the best interests of students, but it would also result in less supply because many property owners would not find it profitable to accept lower rents, which would lead to a shortage of homes. Long-term, these shortages can also encourage black marketing.

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