Question

what are the goals of rent control? Please list and discuss TWO ALTERNATIVE PROPOSALS to achieve the same goals that rent control laws try to achieve. 2. Please argue for and against each proposal that you discussed in question 1: What are the strengths and weaknesses in each proposal, in theory? Why are both proposals superior to ‘pure’ rent control in helping tenants, at least in theory? 3. How would you describe the relationship between a tenant and her landlord? Usually, which party has the ‘upper hand’? Which party is wealthier, typically? 4. My friend’s daughter was contacted by her landlord. He is lowering her rent 75% during the pandemic---but she has to pay the remainder back LATER. This sounds very generous, but, long term, how does this change the issue? 5. WHAT IS THE ISSUE HERE? IF A PRICE FREEZE IS NOT A GOOD IDEA IN THE LONG TERM, THEN WHAT SPECIFIC ACTIONS WOULD YOU TAKE IN ORDER TO IMPROVE THE LIVES OF TENANTS? WHY? -17-17

Answer 1

Rent control basically described as government regulations over the landlord decision of setting the prices and hike the rents as per their requirement.

Two proposals that can alternatively attain the same objective are:

• price ceiling
• freezing price at equilibrium without increase in rent every year.

Price ceiling:

it is the best alternative as by this we can fix the maximum limit of rent as per the requirement of the state and landlord cannot cross that limit.

but on the other hand due to this after a certain time landlord might think to pull his hand from renting and turn it to commercialise as rent might not be profiting him.

it is better then rent control as rent control mainly focus on rent but ths will set maximum limit thus facilitating landlord as well tenant and no specific aggrement is required.

FREEZING PRICE:

according this where the demand and supply meets fixes the price of rent but constraint will be that there will be no increase in rents per year. thiss will help landlord and tenant to pay a fair price irrespective of landlord intension to earn more and tenant intension to pay less.

but here is the problem that is some poor tenenats may not survive as they hardly earn their livilihood.

it is still far better as 95% perssosns are covered in this proposal.

a tenant and landlord have the relation of give and take

as landlord give tenant his land as rent and in return tenenat pay rent for this

and basically tenant are working for them so generally, landlords are much wealthier.

freezing rent may be not good option sometimes as mention in the example, friends daughter has to pay 25% rent now but due to freezing of rent sooner or later but she had to pay her rest 75% of rent

sounds generous on general behaviour of landlord but here freezing of rent theory fails for the tenant.in such scenario there must be extra clause that during natural cause they had to pay 50% of rent sooner or later and if pandemic and cash flow is irregular then they may be given option of paying thta 50% in installements.