Question

Briefly define and give a specific example of:

1. Housing tenure

2. Stock-flow housing model

3. Rent control

4. The Big Sort

5. Mortgage interest deduction

6. Incidence and supply elasticity

7. Housing market GSEs

Answer 1

Housing Tenure is defined as how a house is owned or occupied in other word It refers to the financial arrangements under which someone has the right to live in a dwelling unit.

two types of tenure form

Tenancy: where a landlord who owns a unit rents the right to occupy the unit to a tenant

Ownership: where those who occupy the unit have ownership rights instead of being just a tenant.

3) :-rent control

Rent control refers to laws or ordinances that set price controls on the renting of residential housing. It functions as a price ceiling

5) :-Mortgage Interest Deduction (MID) is defined as an itemized deduction for income tax reporting allowing homeowners to deduct interest and related charges they pay on a mortgage encumbering their primary or second homes.

HMID: allows homeowners to reduce their taxable income by the amount of interest paid on the loan for their house (or sometimes even a second home).

6):-tax incidence is defined as the manner in which the burden of a tax is shared among participants in a market

Economic incidence is refers to who shoulders the real burdens of the tax. Knowledge of statutory incidences reveals little about the economic incidence of a tax.

Consumers bear the higher price. Sellers then must bear what ever is left over. BOTH

Price Elasticity of Supply is defined as the responsiveness of producers to price changes and is defined as the percentage change in quantity supplied divided by the percentage change in price. Supply curves that are relatively elastic (inelastic) undergo relatively large (small) changes in quantity supplied when price changes occur

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