Assume that the long-run supply of housing is highly elastic.The imposition of binding rent controls will lead to

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If the long-run supply of housing is highly elastic, it means that the quantity of housing supplied can increase quickly in response to changes in demand or price. With the imposition of binding rent controls, the price of rental housing will be set below the equilibrium level, leading to an increase in demand for housing. As landlords cannot increase rent to match the higher demand, they may stop maintaining their properties or convert them to other uses. This will result in a reduction in the quantity and quality of rental housing available, worsening the housing shortage over time.

Assume That the Long-Run Supply of Housing Is Highly Elastic