Question

 Who benefits from rent ceilings? Who suffers? What are the long-term effects of rent ceilings? How can landlords and tenants cheat on rent ceilings? Do you think the rent ceilings might lead to more discrimination against certain groups?

        

Answer 1

Who benefits from rent ceilings?
It's the tenant community that benefits from rent ceilings.

Who suffers?
It's the house-owners community that suffers from the same.

What are the long-term effects of rent ceilings?
House-owners feel less inclined to invest in housing properties. Families who don't own a home also feel less inclined to purchase a home. They prefer a rented house which comes at a lower rent-price than market equilibrium rent prices.In long run, there is fall in demand for new houses, followed by the fall in the supply as well. The housing sector is on the risk of getting into the grips of depression in the long run.

How can landlords and tenants cheat on rent ceilings?
Landlord may pressurize the tenants to pay the market rent in two parts - One part equal to rent ceiling prices which is accounted in the books properly and the other part (i.e. excess of market rent price over ceiling rent) in cash or in an unaccounted way.


Do you think the rent ceilings might lead to more discrimination against certain groups?
Yes. When the landlords will not get the market-rent-prices for the houses if they let out to certain groups of society who may be migrants and by-and-large not owning a house, property owners might prefer to evade the law by refusing to let out their houses under 'rent agreements'. They may invent alternative ways of charging the market rents in a legal way. Not only this, house-owners may coin new ideas like leasing out their properties to corporates in place of renting-out. House owners may develop even more ideas to avert the impending loss caused by the rent-ceilings. Effectually, certain groups of society may be deprived of the affordable housing in the country.