Suppose It Is Decided That Rent Control

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Suppose It Is Decided That Rent Control

rol in New York City will be abolished and that market rents will now prevail. Assume that all rental units are identical and so are offered at the same rent. To address the plight of residents who may be unable to pay the market rent, an income supplement will be paid to all low income households equal to the difference between the old controlled rent and the new market rent. 2. What effect will an income supplement policy have on the market. What effect does it have on the market rent and quantity of rental housing supplied in comparison to your answers to part a? 3. Are tenants better off as a result of these policies? 4. Are landlords better off as a result of these policies? 5. Is society better off as a result of these policies?
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1. Eliminating the rent control will cause both quantity supplied and housing quality to increase. 2.The income supplement will cause demand to shift right causing the equilibrium quantity and rental price to increase. 3.Uncertain 4.Yes 5.Yes
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