The Ethics of Rent Control

905 Words2 Pages

Ethics, according to the Oxford dictionary is “a set of moral principles that govern a person’s behavior or the conducting of an activity”. Ethics consists of doing what the law requires, following the standards of behavior our society accepts, and also has to do with what you believe is right or wrong. Rent control is not unethical, but is very controversial. If on one hand it is a good thing because it prevent landlord from being unethical charging the tenants unfair rent price, on the other hand it is unfair for the landlords to be imposed a rental price below market price which he/she is morally entitle to. Rent control can create several problems not only for the landlord but for the economy as well.
Rent control is a price ceiling imposed by the government. Which means is a law that places a maximum price a landlord can charge a tenant. This rent control affects the equilibrium of the market, making a change on supply and demand because if the price is set below the market price, the quantity demanded will exceed supply; as a result, people who want to rent will have to lean to units that are not rent controlled which will have a higher price. In a normal competitive market, when the quantity demanded exceeds supply, the price increases to eliminate the problem of shortage. In this case of rent control, the price of rent can only be increased each year by a fraction of the inflation rate.
The main problem rent control can create to landlords is the case of the tenant do not move out because of the good rental price. That causes the landlords to lose money by not being able to increase the rental price of their units. Besides, the price of maintenance continues to increase, causing landlords to not earn any profit with their ...

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...problem is solved now, but in the long run landlords and the economy loses. Some of the negative effects caused by rent control are: it hurts the ones who are suppose to get help, gives landlords less incentive to maintain or to improve their rent controlled apartments, reduce investment on building and buying apartment in order to rent, discourage the construction of affordable houses to all in need, and increase the construction of luxury houses for those who can afford.

Works Cited

Block, W. (n.d.). Rent Control: The Concise Encyclopedia of Economics | Library of Economics and Liberty. Retrieved February 24, 2014, from Web site: http://www.econlib.org/library/Enc/RentControl.html

Smith, A. (n.d.). Rent Control is Bad for Affordability. (n.d.). Retrieved February 23 from Web site: http://seattletransitblog.com/2013/10/24/rent-control-is-bad-for-affordability/

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