Rent Control Essay

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Rent control can be defined as the act of the government exerting control over how much landlords may raise rent over a 12-month period[1]. Owners of houses/apartments have complete property rights therefore have the right to determine, first whether or not they want to rent out their space, and if so, they have full authority over which tenant they want to rent it to. Once the owner has decided that they want to rent out their space, he/she then has the right to all the rental income accumulated from the property. As quoted by Thomas W. Merril and Henry E. Smith, in the essay ‘What Happened to Property in Law and Economics?’ property can be defined as a bundle of rights and that any distribution of rights and privileges among persons with respect to things can be dignified with the (almost meaningless) label ‘property’[2]. Rent control more or less acts as a price cap as to how much a landlord may increase the rent. It operates by constraining rents below the market price and therefore affects both the supply and demand for rental housing. The rental demand is stimulated by the lower price of housing services, while the rental supply is diminished by reduced construction. Imposing rent control appears to be a beneficial legislation to consumers in the short run, as the tenants occupy the premises for which, without rent controls, they would presumably have to pay more[3]. On the contrary, rent control also has a negative affect on landlords, as they are not able to exercise the full power on their profits. They are unable to receive the full price of the property, they see less return for investment and in turn may resort to cutting costs and lowering the maintenance standard, and/or discriminate in favor of tenants according to their age, sex, ethnicity etc. Strictly controlled rent means that property owners may not have the money to make necessary

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