The adverse effects of rent controls include
A) keeping rental rates too high in a normal market.
B) excessive construction of new rental housing.
C) reduced incentive to construct new rental housing.
D) increased incentives for people to purchase their own homes.

Question

Quizplus · Accepted Answer

Rent controls reduce the profit potential of landlords and hence give them less incentive to construct new rental housing. As a result, the overall supply of rental properties decreases, leading to further shortages, black markets or a reduced quality of available housing, all of which can have further negative effects on the market. Additionally, rent controls can also result in reduced maintenance and upkeep of existing rental properties, further exacerbating housing quality issues.

The Adverse Effects of Rent Controls Include