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Rent control is the legislation of below-market rent increases. City managers wishing to ensure the affordability of housing impose upper limits on the increases landlords can impose on tenants. In a year in which the free market might demand a \(10\%\) rise in rent levels, for example, rent controls might permit no more than a \(5\%\) increase.
When rent inflation is higher than rent control limits, the policy does lead to lower housing costs for tenants. Since periodic increases are not as high as they otherwise would be, the resulting rents are lower. The lower rent persists for as long as the tenant remains in the home; very long-term tenants can end up paying rents that are a tiny fraction of the market value of a rental.
The effects of rent control are not universally beneficial however. Since revenues to landlords are limited by rent control, landlords are motivated to offer fewer properties for rent, and to cut back on maintenance costs for those properties they do offer. As a result, rental properties in rent-controlled communities become scarcer and more difficult to obtain and, generally, housing quality deteriorates.
The shortcomings of rent control policies often result in changes to those policies after they are instituted. Rental markets are devastated, yet political pressure from the policies' beneficiaries prevents their abolition. It often becomes necessary to exempt some properties from rent control, so that investors will have incentives to develop new rentals.
1. What is the purpose of this passage?
A. To endorse the use of rent control as a means of ensuring affordable housing
B. To explain how rent controls benefit the rental markets in cities in which they are employed
C. To show that rent control policies are detrimental
D. To explain the advantages and disadvantages of rent control policies
E. To compare rent control policies with other public policies
The OA is D
2. The passage states that all of the following are drawbacks of rent control EXCEPT
A. Decreased availability of rental properties
B. Poorer condition of rental properties
C. Fewer people moving into rent-controlled cities from without
D. Difficulty in finding properties to rent
E. Limited revenues for landlords
The OA is C
3. The author would most likely agree with which of the following?
A. Rent controls should not be employed in any city
B. In years in which market rents don't increase much, rent controls could have no effect whatsoever on actual rent increases
C. The benefits of rent control outweigh its costs
D. Cities in which the rental markets are combinations of rent-controlled and free-market properties are less desirable to live in than cities with uniform rental markets
E. Some landlords favor rent control policies
The OA is B
When rent inflation is higher than rent control limits, the policy does lead to lower housing costs for tenants. Since periodic increases are not as high as they otherwise would be, the resulting rents are lower. The lower rent persists for as long as the tenant remains in the home; very long-term tenants can end up paying rents that are a tiny fraction of the market value of a rental.
The effects of rent control are not universally beneficial however. Since revenues to landlords are limited by rent control, landlords are motivated to offer fewer properties for rent, and to cut back on maintenance costs for those properties they do offer. As a result, rental properties in rent-controlled communities become scarcer and more difficult to obtain and, generally, housing quality deteriorates.
The shortcomings of rent control policies often result in changes to those policies after they are instituted. Rental markets are devastated, yet political pressure from the policies' beneficiaries prevents their abolition. It often becomes necessary to exempt some properties from rent control, so that investors will have incentives to develop new rentals.
1. What is the purpose of this passage?
A. To endorse the use of rent control as a means of ensuring affordable housing
B. To explain how rent controls benefit the rental markets in cities in which they are employed
C. To show that rent control policies are detrimental
D. To explain the advantages and disadvantages of rent control policies
E. To compare rent control policies with other public policies
The OA is D
2. The passage states that all of the following are drawbacks of rent control EXCEPT
A. Decreased availability of rental properties
B. Poorer condition of rental properties
C. Fewer people moving into rent-controlled cities from without
D. Difficulty in finding properties to rent
E. Limited revenues for landlords
The OA is C
3. The author would most likely agree with which of the following?
A. Rent controls should not be employed in any city
B. In years in which market rents don't increase much, rent controls could have no effect whatsoever on actual rent increases
C. The benefits of rent control outweigh its costs
D. Cities in which the rental markets are combinations of rent-controlled and free-market properties are less desirable to live in than cities with uniform rental markets
E. Some landlords favor rent control policies
The OA is B
