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Are Rent Ceilings Efficient?

FAQs Jackson Bowman August 8, 2022

Many economists argue that rent caps – and rent controls in general – are destructive because they create housing shortages and discourage investment.

Is a rent ceiling fair?

Are rent caps fair? From the point of view of fair rules, a rent cap is unfair because it blocks voluntary exchange. From the Fair Results point of view, a rent cap is unfair because it usually does not benefit the poor.

What are the effects of a rent ceiling that is set below the equilibrium rent?

What are the effects of a rent cap that is below the equilibrium rent? If the upper rent limit is set below the equilibrium rent, the quantity of residential units demanded by the tenants exceeds the quantity offered by the landlords.

What are the disadvantages of rent control?

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