A rent control law, where tenants pay below-market rents, is a market restriction that may induce a decrease in the supply of rented apartments.

Question

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Rent control laws set a maximum rent that landlords can charge their tenants, often below the prevailing market rate. This can reduce the financial incentives for landlords to maintain and supply rental units, particularly in pricey areas where the rental market is already tight. As a result, rent control laws may cause a decrease in the supply of rented apartments, impacting the overall housing market.

A Rent Control Law, Where Tenants Pay Below-Market Rents, Is