Question

One of the problems with rent control is that:

The costs and benefits are not transparent.

It requires a payment by taxpayers.

All people that want to rent benefit but not all landlords.

All landlords benefit but not all renters.

Answer 1

Option A The costs and benefits are not transparent.

Rent control refers to laws framed by government, that set price controls on the renting of residential housing. Rent Control have certain disadvantages which can adversely affect both tenants and landlords. Rent Control reduces housing availability. It may create shortage where quantity demanded exceeds quantity supplied and can result in rise in prices. Rent control can harm the investors if excercised for a long period of time. This is because it can result the rental price below the market price, thus reducing profits. Due to reduced profits rent control can result in reduced maintenance on existing properties. Rent Control being government based, results in high administrative costs. Low profits by landlords will lower their income and thus lowering the tax revenue. To conclude we can say that costs and benefits of rent control are not transparent.