Mobile homes are housing units installed on a permanent foundation owned by a landlord. Although a resident owns the home, she rents the foundation from the landlord. In theory, owners of mobile homes can transfer their home to a different foundation if the rent becomes too steep, but uninstalling, transporting, and reinstalling the mobile home is usually prohibitively expensive. This "lock-in" effect encourages state legislatures to create rent controls for mobile home foundations. Which statement is a plausible, unintended consequence of these laws?

Question

Quizplus · Accepted Answer

Rent controls on mobile home foundations may discourage landlords from investing in new foundations, as they cannot increase rents to recoup their investments. This lack of investment leads to a shortage of available foundations, which ultimately makes it more difficult for new mobile home buyers to find a place to put their homes. As a result, there are likely to be fewer new mobile home foundations constructed.

Mobile Homes Are Housing Units Installed on a Permanent Foundation