Rent regulations has been a subject of debate among individuals. Economists especially oppose rent regulations (Lewyn, 2015), while tenants are in support of rent control regulations being imposed by the government as it will reduce the amount of money they would have to spend on rent and also increase their disposable income. rent regulation is when the government makes it illegal for landlords to set rent above certain price The main problem with rent control is that it effects aggregate supply and demand in the housing market. This is one of the main reasons why Economist oppose rent control as the housing market will be significantly affected if the government impose rent control. This essay is going to identify and analysis whether rents …show more content…
The idea that the government, should regulate rents that landlords can charge is believed by many individuals as a sensible way to address problems in housing markets. (E.H, 2015) House rent can be regulated on various ways; such as rent controls. Rent control is a limit that can be in big cities such as New York and London rents have soured over the years. For instance, to rent a studio flat in London cost individuals over £1,000 per month. Which is significantly expensive for some individuals. Big cities always attract more people and families due to the increased number of jobs they provided. This then leads to an increase in aggregate demand in the housing markets. consequently, landlords then notice a need to charge absurd rent prices as they are aware that people will be obligated to …show more content…
Quantity of apartments end up being lower than efficient level. This causes a reduction in the number of apartments rented and some apartments are misallocated as a result of rent regulations being imposed by the government. In addition to this low quality apartments lead to a lack of sufficiency from landlords to provide tenants well maintained houses however due to the desperation of tenants some landlords are able to find tenants and still rent out for high prices; causing a black market. (Parkin, 2012)Rent regulations encourages illegal trading in the black market. This causes the equilibrium price to exceed the price ceiling. (Krugman, Wells ,2009) rent regulations lead to landlords becoming frustrated and finding ways to increase rent prices in order to make a profit. Through frustration and time wasted looking for property renters give in to landlords and agree to rent houses for absurd prices due to low supply of properties because of government regulations on rent prices. On top of paying for house rent, some tenants have to pay for extras such key and lock change. (Krugman, Wells, 2009). If landlords remove their property from the market and population increases, more people would want to rent or buy houses however there would be a shortage due to rent regulations and the limitations they have on Landlords charging rent prices of their