The long-run effect of rent control on an area includes
A) rampant building of new low-income housing.
B) many new luxury apartments new luxury apartments will be built.
C) new investors into the real estate market in the area.
D) less investment into the real estate market in the area.

Question

Quizplus · Accepted Answer

Rent control creates a lower return on investment for landlords, which reduces their incentive to invest in new housing or maintain existing units. Over time, this results in a reduction in the available housing stock and a decrease in the overall quality of housing. This lack of new investment can also deter new investors from entering the real estate market in the area. Therefore, the long-run effect of rent control is less investment into the real estate market in the area.

The Long-Run Effect of Rent Control on an Area Includes